A Goldman Sachs-backed fintech company is drawing attention as its stock currently trades nearly 58 percent below its all-time high. Despite the steep correction, the company operates in a high-growth sector with strong long-term fundamentals. For investors looking for potential rebound candidates, this discounted fintech player might be worth keeping on the radar.
Share price movement
With a market capitalization of Rs.11,655 crores, the shares of Newgen Software Technologies Ltd closed at Rs.855.00 each, reflecting a 58 percent drop from its 52-week high price of Rs.1,798.90 per share. On Monday, the stock reached an intra-day low of Rs.758.20 each, falling 18 percent from its previous closing price of Rs.921.80 apiece.
Business Overview
Newgen Software continues to prioritize banking and financial services as its core vertical, with increasing traction in the insurance and government sectors. Recent significant wins include a Rs.25 crore project from a major insurance company in India and a USD 1.5 million order from a leading financial institution in the US, highlighting the company’s expanding presence in diverse industries.
Key Offerings
Newgen’s key offerings include the NewgenONE Platform, a low-code solution designed for end-to-end business process automation, ensuring quick and secure application development.
The company also provides Process Automation tools that integrate robotic process automation (RPA) and dynamic case management to optimize workflows. Additionally, AI Integration within the platform leverages generative AI to enhance productivity and streamline operations across various business functions.
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Financial Performance
Newgen Software Technologies Ltd reported strong financial performance in Q3 FY25, with revenue rising 16 percent year-on-year to Rs.346 crore, up from Rs.299 crore in Q3 FY24. The company also witnessed a 30 percent surge in net profit, which climbed to Rs.84 crore from Rs.65 crore in the corresponding period last year. This growth was driven by robust demand for its digital transformation solutions across global markets.
Accounting Ratios
The company has a Return on Capital Employed (ROCE) of 27.39 percent and a Return on Equity (ROE) of 22.45 percent. Its Price-to-Earnings (P/E) ratio stands at 41.84, lower than the industry average of 50.98. Furthermore, the company maintains a current ratio of 4.05, a debt-to-equity ratio of 0.03, and an Earnings Per Share (EPS) of Rs.22.04.
Shareholding Pattern
As of the December 2024 shareholding pattern, promoters of Newgen Software Technologies Ltd hold a 54.30 percent stake in the company. Foreign Institutional Investors (FIIs) own 20.31 percent, while Domestic Institutional Investors (DIIs) and retail investors hold 9.10 percent and 16.06 percent, respectively. Notably, Goldman Sachs owns 2.92 percent, and the Massachusetts Institute of Technology holds a 4.14 percent stake.
Company Profile
Established in 1992 and headquartered in New Delhi, India, Newgen Software Technologies Limited is a prominent provider of digital transformation solutions, with expertise in Enterprise Content Management (ECM), Business Process Management (BPM), and Customer Communication Management (CCM).
Written by – Siddesh S Raskar
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