Shares of Newgen Software Ltd. are down another 6% on Friday, July 18, after the stock was downgraded by brokerages after its June quarter results.The stock had declined 6% in Thursday’s session as well in response to the earnings that were reported during market hours.
During the earnings call, the management alluded to seasonality factors for the first quarter and that revenue was hurt by delay in large deal closures and slower client decisions.
The management mentioned that the BFSI demand remains strong and while large deals are delayed, smaller tactical deals are closed.
Although the deal pipeline remains healthy, closure of the deals is expected only in the second half of the current financial year.On the margins front, the management said that they are likely to remain stable but that is contingent to growth resuming.
During the earnings call, the management alluded to seasonality factors for the first quarter and that revenue was hurt by delay in large deal closures and slower client decisions.
The management mentioned that the BFSI demand remains strong and while large deals are delayed, smaller tactical deals are closed.
Although the deal pipeline remains healthy, closure of the deals is expected only in the second half of the current financial year.On the margins front, the management said that they are likely to remain stable but that is contingent to growth resuming.
Brokerage firm Jefferies downgraded Newgen Software to Underperform from its earlier rating of Hold and also cut its price target to ₹835 from ₹965 earlier. The revised price target implies a potential downside of 14% from current levels.
On the flip side, UBS maintained its “buy” rating on the stock but cut its price target to ₹1,300 from ₹1,400.
Out of the eight analysts that have coverage on Newgen Software, four of them have a “buy” rating, three say “sell”, while one has a “hold” recommendation.
Shares of Newgen Software are trading 6.1% lower at ₹962.5. The stock is down over 12% so far this week, making it the worst weekly performance that the stock has had since 2025.
