Crisil Ratings stated that the rating continues to reflect the strong business and financial risk profiles of the group, with compound annual growth rate of 24% in revenue in the three fiscals through 2025, driven by continuous in-house research and development (R&D), new service offerings, penetration into new geographies and regular addition of customers as well as increase in order flow from existing customers.
Focus on larger customers with bigger orders, continuous development and innovation in products and increasing overseas sales in new geographies will lead to revenue growth over the medium term. Earnings before interest, tax, depreciation and amortisation (EBITDA) margin is expected to remain healthy at around 24% over the medium term due to better absorption of fixed cost.
Networth was strong at Rs 1,507 crore as on 31 March 2025, against Rs 1,220 crore previous fiscal. Total outside liabilities to tangible networth (TOLTNW) ratio is expected below 0.50 time over the medium term, in line with past trend.
The group does not have any major capital expenditure (capex) plans over the medium term and thus, the financial risk profile will likely remain stable.
The rating continues to reflect the group’s sound market position, well-established clientele, geographical diversification in revenue and healthy product diversity with regular investment in R&D, and improvement in the financial risk profile.
These strengths are partially offset by large fixed costs, susceptibility to employee attrition, working capital-intensive operations and exposure to fluctuations in foreign exchange (forex) rates.
Newgen Software Technologies is an information technology (IT) product company that provides solutions in enterprise content management, business process management and customer communications management. Its customers are organisations belonging to the banking, telecommunications and insurance sectors.
The company’s consolidated net profit jumped 21.73% to Rs 108.34 crore on a 12.8% rise in revenue from operations to Rs 429.89 crore in Q4 FY25 over Q3 FY25.
The scrip shed 0.39% to currently trade at Rs 1220.15 on the BSE.