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ICICI Securities: Newgen Software Technologies Performs Well In Q1; Continues To Invest In R&D 

ICICI Securities: Newgen Software Technologies Performs Well In Q1; Continues To Invest In R&D

Programmers work in an office. (Photographer James MacDonald/Bloomberg)
Programmers work in an office. (Photographer James MacDonald/Bloomberg)

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ICICI Securities Report

Newgen Software Technologies Ltd.’s revenues were flat on YoY basis with margins improving 520 basis points to 7.4% in Q1 FY21. Revenues from U.S. grew by 36% YoY with key impetus coming from deployment under the Paycheck Protection Program (PPP), which also helped the company win new logos. (Growth ex-PPP was 16-18% YoY in U.S.). Annuity-based offerings gained traction and grew 11% YoY and comprise 66% of revenues (Q1 FY20-60%). Newgen won 22 new logos in Q1 with the company targeting 20-25 new customers in US ex-PPP in FY21.

Newgen continues to invest in business across research and development and sales and marketing with expenses in aggregate forming 30% of Q1 revenues. Though net day sales outstanding (DSO) increased by 10 days to 122 due to some challenges in collections, the company expects DSO days to gradually come down.

Click on the attachment to read the full report:

ICICI Securities- Newgen Q1FY21 Results Update.pdf

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