Newgen Software Technologies Q3 Review - Incremental Growth Hinges On Travel: ICICI Securities
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ICICI Securities Report
As anticipated, Newgen Software Technologies Ltd. reported flat revenues in nine-months FY21 with significant margin improvement (from 8.1% in nine-month FY20 to 23.4% in nine-month FY21).
U.S./Asia-Pacific quarterly revenues grew 26%/15% YoY with the company reporting 11 new logo wins.
The company continues to invest aggressively across research and development, S&M and senior leadership personnel with expenses aggregating to approximately 23% of revenues in Q3.
Company hinted at improving demand environment across key industry segments. However, we believe mid-teen growth expectation for FY22E is contingent upon travel opening up and deal conversions happening in Q4 FY21E and Q1 FY22E.
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