Newgen Software Tech closes higher by 11% on impressive Q2 results; net profit up nearly 60%

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Newgen Software Technologies, a small-cap IT stock, finished Tuesday's session strongly with a gain of 11.37% at ₹1,041.40. The stock hit an all-time high of ₹1,060 during the trade. This impressive performance followed the company's strong financial results for the quarter ending in September.

For Q2 FY24, the company reported a 59% surge in its consolidated net profit to ₹48 crore, up from ₹30 crore recorded in the corresponding quarter of the last fiscal. The consolidated revenue from operations reached 293 crore compared to ₹226 crore in Q2 FY23, up 30% YoY, driven by strong growth in banking and financial services across geographies. Total annuity revenue streams (ATS/AMC, support, cloud/SaaS, and subscription license) came in at ₹179 crores, with strong growth in support revenues.

Subscription revenues (ATS/AMC, cloud, and subscription license) stood at ₹90 crore. Revenue from implementation grew by 82% YoY to reach ₹62 crore, according to the company's earnings report. During the quarter, the company said, it achieved a significant order worth ₹68 crore from a leading public sector bank in India for the development and management of their complete digital business platform.

This is the largest order in terms of value for Newgen so far. The company expanded its operations with existing customers in the EMEA region, especially in Saudi Arabia. During Q1, Newgen added 14 new logos.

According to the company's earnings report, the EMEA region contributed 34% of revenues in Q2 FY24, while India, USA, and APAC (EX-India) contributed 32%, 23%, and 11%, respectively. In terms of revenue split, banking contributed 74% in Q2 FY24. Speaking about the results, Diwakar Nigam, Chairman and Managing Director of Newgen Software