Newgen Software, the Delhi-based IT product firm, just reported Q1 FY26 with revenue ₹321 Cr (up 1.9% YoY) and PAT ₹50 Cr (up 4.5%). Margins cooled to 14% OPM after a hot streak, but they continue to flex 22% ROE, 28% ROCE, and 25% OPM TTM. Stock trades at 39.6x P/E—basically, “Infosys with gym membership fees.” Their story? From scanning dusty court files to pitching AI-enabled workflow automation called “Marvin.” Yes, Marvin.
2. Introduction
Most IT companies in India are like tiffin services: they cook software for someone else. Newgen, though, insists on being the cook and the restaurant—building its own products, licensing them, and charging customers annuity fees till kingdom come.
They started with document management (read: filing cabinets in digital form), graduated to BPM (workflow automation so managers can feel important), and now they’re yelling “Generative AI” like every other tech CEO who just discovered ChatGPT.
Their customer list? Banks, insurance, government agencies, and PSUs—basically everyone in India who still uses a stapler. 70% of their revenue comes from BFSI. Geographically, EMEA gives them more business than USA, which is rare for an Indian IT firm.
But let’s not ignore the masala:
They had a ransomware attack in FY24 (yes, the IT security provider got hacked—like a dentist with cavities).
They’re still growing at mid-teens sales CAGR, but stock price crashed -19% in FY25 because markets expect IT to mint cash endlessly.
With 24 patents granted, they brag about IP like it’s IIT-JEE rank.
So, are they the next SaaS superstar or just another midcap IT name sprinkling AI dust?
3. Business Model – WTF Do They Even Do?
Newgen’s 3-headed dragon is called NewgenONE platform:
ECM (Enterprise Content Management): Scan, store, and manage documents. Think government tender files but less dusty.
BPM (Business Process Management): Automate workflows. Basically telling your boss’s Excel sheet to stop micromanaging.
CCM (Customer Communication Management): Manage customer emails, SMS, WhatsApp blasts—because spamming is an art.
Revenue Streams:
Annuity (60%): SaaS + AMC/ATS + Support. The dependable EMI of their P&L.
Products (18%): One-time license fees. Flashy but irregular.
Geography: India 32%, EMEA 35%, USA 21%, APAC 12%.
Revenue model is sticky like fevicol. Once clients are locked, switching costs are high. They added 51 new logos in FY24 and now serve 530+ customers across 73 countries.
4. Financials Overview
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue
₹321 Cr
₹315 Cr
₹430 Cr
1.9%
-25.3%
EBITDA
₹45 Cr
₹48 Cr
₹137 Cr
-6.3%
-67%
PAT
₹50 Cr
₹48 Cr
₹108 Cr
4.5%
-54%
EPS (₹)
3.51
3.39
7.65
3.5%
-54%
Commentary: Revenue flat YoY, big QoQ dip (seasonality + delays). PAT flat but consistent. Margins crashed QoQ, proving even software firms can have mood swings.
5. Valuation Discussion – Fair Value Range Only
P/E Method: Annualised EPS ~₹22.5. Industry PE ~30. Fair Range = ₹675 – ₹900/share.
