Multibagger IT stock hit record high in two sessions post Q3 earnings; can it cross Rs 1,000 mark?

Shares of Newgen Software Ltd have turned into multibagger rising over 152.50% in the last six months. The strongest rally yet seems to come in the last one year when the software stock rose 337%. The multibagger stock is trading in overbought zone with the relative strength index (RSI) of Newgen Software rising to 71.2.   

The high RSI is accompanied by the stock trading near record high level.   Newgen Software shares hit a record high of Rs 900 post Q3 earnings on Wednesday.  The stock touched its record high of Rs 898.60 on Tuesday also after the firm announced its Q3 earnings.

Newgen Software stock opened higher at Rs 900 in the previous session. Market cap of the firm slipped to Rs 12,192 crore. Total 0.21 lakh shares changed hands amounting to a turnover of Rs 1.86 crore on BSE.   

Newgen Software stock has a one-year beta of 0.4, indicating very low volatility during the period. Newgen Software shares stand higher than the 5 day, 10 day,  20 day, 50 day, 100 day and 200 day averages.     

Newgen Software reported a 44.5 percent year-on-year rise in net profit to Rs 68.3 crore for the December 2023 quarter against Rs 47.3 crore in the Decmber 2022 quarter.   

Revenue climbed 27% to Rs 324 crore in Q3 against Rs 255 crore from the year-ago period.  

EBITA rose 35 percent on a sequential basis to Rs 77 crore from Rs 57 crore. The margin came in at 23.8 percent, up 440 basis points from 19.4 percent in Q2FY24.  

The firm said it logged 11 new customer logo additions in the quarter   

Global brokerage Jefferies has raised the target price on Newgen Software to Rs 1,070 from Rs 870. However, the brokerage has kept its rating unchanged to 'Buy' it believes the “growth momentum to sustain.” 

Earnings per share estimate for FY 24 to FY 26 has been raised to 5% as it sees higher margin estimates and lower tax rates from SEZ benefitting the company. Further, the brokerage expects the company to deliver 26% earnings per share on a compounded annual growth rate over FY 25 – FY26 on the back of 'the strong growth outlook and visibility.'

Abhijeet from Tips2trades said, "Newgen Software stock price is overbought on the Daily charts with next resistance at Rs 932. Investors should book profits at current levels as a daily close below the support of Rs 833 could lead to Rs 696 in the near term."

Newgen Software Technologies Limited is a provider of a unified digital transformation platform (NewgenONE) for automating the end-to-end process and comprehensively managing content and communications, backed by artificial intelligence (AI)-based cognitive capabilities, governance and a robust integration ecosystem. The core products of NewgenONE platform are Contextual Content Services (ECM), Low Code Process Automation (BPM), Omnichannel Customer Engagement (CCM) and Artificial Intelligence Cloud.      

 Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

  

 

  

 

 

 

Also read: Stock recommendations by analyst for Jan 18, 2024: Welspun Corp, L&T Fin and Apollo Hospitals

Also read: Stocks to watch out for today: Happiest Minds, IndiGo, SpiceJet, NHPC, Asian Paints and more