ICICI Securities Recommends 'Hold' on Newgen Software, Sets Target at Rs 660
Business
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Moneycontrol•30-01-2026, 21:07
ICICI Securities Recommends 'Hold' on Newgen Software, Sets Target at Rs 660
- •Newgen Software reported subdued Q3FY26 revenue growth of -0.1% QoQ/5% YoY, affected by fewer large license deals in India and EMEA.
- •APAC and US markets showed stronger growth at 7.4% and 20.8% YoY respectively, while annuity revenue saw a strong YoY uptick across AMC, SaaS, and support.
- •EBITDA margin remained strong at 26.5% despite wage hikes, supported by AI-led productivity in delivery.
- •AI is causing longer deal cycles, particularly in the Indian market; management anticipates continued AMC revenue traction and aims for increased AI-led productivity.
- •ICICI Securities reduced the target P/E to 25x (from 35x) and set a Dec’26 target price of INR 660, maintaining a 'Hold' rating based on expected growth recovery in FY27.
Why It Matters: ICICI Securities maintains a 'Hold' rating on Newgen Software with a Rs 660 target, citing subdued growth but expected FY27 recovery.
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