🧾 At a Glance

Newgen Software, India’s low-key enterprise automation hero, has done what most flashy SaaS stocks dream of — 34% profit CAGR, 73% stock CAGR, and zero hype on Twitter. From digitizing banks to enabling government e-docs, this silent SaaS engine is quietly minting money… all while you were busy watching Zomato crash and bounce.

🚀 1. TL;DR — Newgen’s 5-Year Scorecard

This isn’t a startup. This is a 30-year-old Delhi-based compounder pretending to be a GenZ SaaS poster boy. And it’s working.

🧩 2. What Exactly Does Newgen Do?

• Enterprise software for:
  • 🏦 Banks (Loan origination, digital onboarding)
  • 🏢 Governments (Document workflow, file tracking)
  • 🛡️ Insurance (Claims automation)
  • 🏥 Healthcare (Document management, billing)
• Revenue Segments:
  • 💸 SaaS + AMC + ATS (recurring): ~60%
  • 🧾 License sales (on-premise): ~20%
  • 🔧 Services & implementation: ~20%

Think of it as India’s Adobe + Salesforce… but bootstrapped and profitable.

💹 3. Financial Performance — Compounding Is the Real UI/UX

🧾 Revenue:

• Grew from ₹661 Cr in FY20 → ₹1,487 Cr in FY25
• 5-Year CAGR = +18%
• Q4 FY25 alone was ₹430 Cr — highest ever

💰 Profit:

• 5-Year PAT CAGR = 34%
• FY25 PAT = ₹315 Cr
• Net margins expanded to 21% — high for an Indian SaaS business

🧪 Operating Metrics:

• OPM = 25% (up from 16%)
• ROCE = 29%
• ROE = 23%

These aren’t “work in progress” SaaS numbers. These are champagne-popping-at-the-concall numbers.

💸 4. Cash Flows — Healthy and Clean

No burn. No dilution. No begging VCs on Zoom.

🧠 5. What’s Working?

✅ High-Margin Recurring Revenue:

• 60%+ annuity-based revenue ensures visibility
• SaaS adoption rising among BFSI + govt clients

✅ Geographic Moat:

• 17 verticals, 70+ countries
• Strong presence in Middle East, APAC, and U.S.

✅ FII Inflows Up:

• FII stake rose from 14.75% → 19.36% in 3 years
• Even DIIs are slowly waking up

✅ No Debt. No Drama.

• Zero debt. ₹508 Cr in investments = safety net

✅ Dividend Paying:

• Payout of 22% in FY25
• Not huge, but shows steady shareholder return mindset

😬 6. What’s NOT Working?

❌ Valuation Getting Frothy:

• P/E = 52x
• P/B = 10.8x
• You’re not buying cheap workflow — you’re paying for future scalability

❌ Working Capital Bloat:

• WC days shot up from 58 → 200 in FY25
• Translation: Clients are slow to pay up

❌ Promoter Stake Dip:

• Dropped from 55.16% → 53.78%
• Nothing alarming… but not ideal when stock is booming

❌ Low Liquidity:

• Despite 16,000 Cr mcap, low retail float = high volatility on bad days

🧠 7. Peer Comparison — Underdog vs the Big Boys

Verdict: Newgen = better margins, faster growth — but nowhere near the scale. Yet.

🧮 8. Fair Value Range – Can This Rally Sustain?

⚙️ Base Case

• FY26E PAT: ₹380 Cr
• P/E of 40x (discounted for small size)
• FV = ₹15,200 Cr → ₹1,075/share

🚀 Bull Case

• FY26E PAT: ₹420 Cr
• P/E = 50x (if growth holds + SaaS rerating)
• FV = ₹21,000 Cr → ₹1,485/share

🎯 EduInvesting Fair Value Range: ₹1,075 – ₹1,485

At CMP ₹1,153 — you’re somewhere in between. Decent entry if you like software with substance.

🧠 Bonus Meme

Investor 1: “Bro, I use Salesforce.”
Investor 2: “Bro, I own Newgen.”

HR Dept: “Let’s automate onboarding.”
Newgen: “Thanks. That’ll be $2 million.”

🔭 9. What to Watch Ahead

• 🧾 US Gov + BFSI deals: Company recently won a $2.5M order for a U.S. government agency
• 💻 Cloud-first Push: Migration to SaaS model continues — could boost margins
• 👀 New Verticals: Healthcare + logistics being explored
• 📉 Valuation Monitoring: Any earnings miss could trigger derating

🏁 Final Thoughts: “Newgen — Workflow Software That’s Working… Everywhere”

It’s rare to find an IT company that:

• ✅ Isn’t dependent on headcount
• ✅ Doesn’t dilute every 2 years
• ✅ Grows faster than most Tier-1 peers
• ✅ And still makes 20%+ net margin

No wonder FIIs are bingeing on it like it’s Money Heist Season 1.

✍️ Written by Prashant | 📅 June 21, 2025
Tags: Newgen Software, SaaS India, enterprise tech, workflow automation, 5-year stock recap, high ROCE stocks, EduInvesting