After Rs 5/Share Dividend, Multibagger IT Stock Offers 1:1 Bonus Issue: Jefferies Upgrades TP

Leading brokerage firm Jefferies has assigned buy call to mid-cap IT Software company Newgen Software Technologies Ltd and increased the target price to Rs 1740 per share from Rs 1275 per share. Current market price of Newgen Software share on BSE is Rs 1424.00 per share with intraday decline of 1.59%. If you buy Newgen Software shares at current market price of Rs 1424.00 apiece, you can fetch likely upside of 22.19%.

According to the analyst, "We are more confident on Newgen's growth outlook and raise our revenue estimates by 2-3 percent and our EPS estimates by 2-4 percent. We expect Newgen to deliver a strong 26 percent EPS CAGR over FY24-26E."

Newgen Software Approves Bonus Issue, Sets Record Date: It is worth mentioning here that Newgen Software's Board of Directors had already approved 1:1 bonus issue on November 27 and fixed January 12 as the record date. It implies shareholders will become eligible to receive one bonus share for every one share held as on January 12, 2024.

Newgen Software Dividend History: Newgen Software declared 6 dividends since Aug. 1, 2018. In the past 12 months, Newgen Software announced an equity dividend amounting to Rs 5.00 per share. If the current share price of Newgen Software (Rs 1424.00 per share) is taken into consideration, it offers a dividend yield of 0.35%, according to Trendlyne.

Newgen Software Stock Performance & Return Over Years: The stock's 52-week high price is Rs 1489.00 apiece and 52-week low price is Rs 329.00 per share, respectively. Newgen Software shares gave shareholders attractive returns in last few years. Newgen Software shares gained 65% in last 3-months, soared 293% year-to-date, jumped 271% in last 1-year only, and offered return of 424% in last 3-years. In last 5-years, Newgen Software shares jumped 333%.

Valuation: According to the analyst, "Newgen has adopted a vertical specific point-solution based approach to enhance sales among existing and new customers. "This should limit Ebitda margin expansion in the future. We thus expect our FY24-26 margins to remain around the 22% range."

Newgen Software Technologies Financials: The company for the quarter ended September 2023 declared a surge of 29.7% in its revenue from operations to Rs 293 crore as against Rs 226 crore in the corresponding quarter of last year. Its EBITDA rose 59.3% YoY to Rs 57.2 crore for the quarter under consideration. The company's margins got better by 290 basis points to 19.5%. "Upon the sanction becoming effective from the appointed date i.e. 01.04.2022 as provided under the Scheme, NTSPL stands dissolved without undergoing the process of winding up," the company said.

About Newgen Software: Newgen is the leading provider of a unified digital transformation platform with native process automation, content services, and communication management capabilities. Globally, successful enterprises rely on Newgen's industry-recognized low code application platform to develop and deploy complex, content-driven, and customer-engaging business applications on the cloud. From onboarding to service requests, lending to underwriting, and for many more use cases across industries. Newgen unlocks simple with speed and agility, according to its official website.

Disclaimer: The stock has been picked from the brokerage report of Jefferies. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.