Jefferies maintains buy on Newgen Software, raises target price to Rs 305

Jefferies has maintained buy rating on Newgen Software in the long term and raised target price to Rs 305 from Rs 290. The stock ended down 4.7% at Rs 228.25 on Wednesday while the BSE Sensex closed 208.43 points (0.50%) down at 41,115.38.

Company Financials

For the quarter ended 30-09-2019, the company has reported consolidated sales of Rs 154.00 crore, up 17.59 % from last quarter sales of Rs 130.97 crore and up 2.90 % from last year same quarter sales of Rs 149.66 crore. The company has reported net profit after tax of Rs 4.22 crore in the latest quarter.


The company’s top management includes Mr.Diwakar Nigam, Mr.Kaushik Dutta, Mr.Saurabh Srivastava, Mr.Subramaniam Ramnath Iyer, Mr.T S Varadarajan, Mrs.Priyadarshini Nigam. Company has BSR & Associates LLP as its auditors. As on 31-12-2019, the company has a total of 69,585,701 shares outstanding.

Investment Rationale

The brokerage has raised its revenue growth and margin estimates for FY20 to reflect a better third quarter and improved commentary. The brokerage expects 15% plus revenue growth over FY21-22 helped by better traction in the US, which in turn should support slight margin expansion and earnings growth of 20% plus.