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IDBI Capital Report
We met Newgen Sotware Technologies Ltd.'s management and the key highlight was that the company is seeing healthy traction in India. In addition the company is able to expand markets and solution outside India based on experience in India.
Apart from India the company believes AI will be key driver going forward (expected to grow at a compound annual growth rate of 48% by 2030).
To capture this opportunity Newgen has launched a Gen AI based product (Newgen Marvin).
We believe Middle East will also drive growth. Further, we expect H2 (average 36% YoY growth) to be better than H1 (average 32% YoY growth).
We now expect profit after tax compound annual growth rate of 34% over FY23-26E.
We have moved to FY26E estimates and maintain ‘Buy’ rating with a target price of Rs 1,631, valuing it at 27 times price-to-earning on FY26E earnings per share.
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