Newgen Software clocks 29.4 pc drop in Q3 profit, shares tank over 15 pc
Mumbai, Jan 20
Newgen Software Technologies on Tuesday reported 29.42 per cent year-on-year drop in net profit in the December quarter of the current financial year.
The company's net profit declined to Rs 62.81 crore in Q3, compared to Rs 89 crore in corresponding quarter of previous financial year (Q3 FY25), according to its stock exchange filing.
On quarter-on-quarter (QoQ), the New Delhi-based IT firm posted 23.3 per cent decline in its net profit, compared with Rs 81.74 crore in the previous quarter (Q2 FY26).
Revenue from operations remained almost flat and slipped marginally by 0.2 per cent to Rs 400.27 crore from Rs 400.79 crore on a quarter-on-quarter basis, it said in its regulatory filing.
Despite the drop in profit, operating performance showed some improvement. EBIT rose 3.1 per cent to Rs 97 crore from Rs 93.3 crore in the September quarter.
As a result, the EBIT margin improved to 24.2 per cent from 23.3 per cent on a sequential basis.
Newgen Software Technologies said its profitability was impacted by a one-time charge of around Rs 35 crore due to the implementation of the new labour code.
The company added that if this one-time impact is excluded, its bottom line would have been higher on a quarter-on-quarter basis.
On the business front, the India segment saw a decline, with revenue falling to Rs 115.4 crore from Rs 117.8 crore in the previous quarter.
Revenue from the EMEA region remained flat at Rs 123.6 crore. The APAC business reported a modest increase, with revenue rising to Rs 65.32 crore from Rs 63.45 crore.
The US business also posted a slight growth, with revenue increasing to Rs 96 crore from Rs 95 crore in the September quarter, as per its regulatory filing.
Following the announcement, Newgen Software shares plunged nearly 16 per cent to hit an intra-day low of Rs 617.55 on the NSE.
Around 2:31 p.m., the stock was trading around 15.5 per cent lower at Rs 621.85 apiece. Over the past 12 months, Newgen Software's share price has declined nearly 57 per cent.
— IANS
Reader Comments
The EBIT margin improvement is a silver lining! Operational efficiency seems better. The one-time hit from the new labour code is a pain many companies are facing. Long-term investors should look beyond this quarter. 📈
Bhai, 57% down in a year? That's brutal. Even after today's crash, I'm not sure if it's a buying opportunity. Need to see if they can grow the US and APAC business faster to compensate for weak India sales.
As a shareholder, I'm disappointed. The communication could have been better. Announcing a one-time charge alongside results always looks like an excuse. Transparency about these costs in advance builds more trust.
Flat revenue is the real story here. In this market, if you're not growing, you're falling behind. The IT sector is facing headwinds, but companies need to innovate. Hope Newgen's pipeline is strong for the next quarters.
The geographical mix is interesting. EMEA flat, APAC and US up slightly, India down. Might be a strategic shift or just market cycles. Their commentary on future guidance will be key.
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