Target: ₹1,091
CMP: ₹995.95
Newgen Software Technologies reported a robust performance in Q2 FY26, with revenues increasing by 11 percent year-over-year to ₹401 crore, while profits rose by 16 percent to ₹82 crore.
The company experienced a notable rise in subscription revenue, which surged 20 percent to ₹126 crore. This growth can be attributed to the escalating global demand for digital transformation, greater adoption of cloud/SaaS solutions, and significant investments in AI-driven technologies.
Newgen’s expansion into new geographic markets and industry sectors, along with a proactive partner ecosystem, further supports its long-term growth trajectory. The quarter also saw the acquisition of 15 new clients and noteworthy multimillion-dollar contracts across the UK, Europe, Ghana, and India.
The US and Asia-Pacific regions each grew by 22 percent, while India and EMEA showed steady gains. The company’s emphasis on digital solutions and AI-enhanced products has improved operational efficiency, contributing to stable profit margins of 20.4 percent.
Investments in sales, marketing, and research and development continue to benefit Newgen. The company’s order book has expanded by over 20 percent compared to the previous year, and its cash flow remains strong. Overall, Newgen’s strategy to scale its SaaS offerings, enhance its global footprint, and leverage investments in AI is fostering consistent growth and solid financial performance.
The ongoing rating is set to Hold, with a target price of ₹1,091, based on a 36.5x FY27E EPS multiple.
Published on October 29, 2025.
