Newgen Software Shares Extend Sell Off As Jefferies Downgrades Post Q3 Results

Newgen Software Ltd., shares continued their downward momentum as prices fell nearly 10% even on Wednesday, after dropping over 17% a day ago. Jefferies had downgraded the stock from a 'buy' to 'underperform', based on the third quarter earnings of the company.

Newgen's third quarter revenue of Rs 380 crore, reflecting an 18% year-on-year growth, had missed analysts' estimates. While the company reported strong revenue growth from new license sales, a significant negative surprise was the slower growth in its annuity revenues. This only grew 9% year-on-year.

Additionally, implementation service growth moderated down to 2%, also below expectations. These factors led to a slight miss in profits, despite a 30% increase in net income, the brokerage noted. Jefferies revised its earnings per share estimates downward by 4–6% for financial year 2025-27, now expecting a 23% CAGR for that period.

Newgen Software stock fell as much as 10.26% during the day to Rs 1,176 apiece on the NSE. It was trading 9.64% lower at Rs 1,184.9 apiece, compared to an 0.33% advance in the benchmark Nifty 50 as of 10:25 a.m.

It has risen 44.72% in the last 12 months. The total traded volume so far in the day stood at 8.2 times its 30-day average. The relative strength index was at 30.

Four out of the eight analysts tracking the company have a 'buy' rating on the stock, two recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 1,499, implying a upside of 25.3%