Newgen Software's Q1 financial results show strong growth and high dividend payout

Newgen Software Technologies, a midcap IT software company, has recently announced its financial results for the quarter ending June 2024. The company has shown a positive performance in this quarter, with a score of 17 out of 20, compared to the previous quarter's score of 20.

One of the key highlights of the financial results is the growth in Profit Before Tax (PBT) by 61.54% year on year, reaching Rs 38.93 crore. This shows a very positive trend in the near term for the company. Similarly, the Profit After Tax (PAT) has also grown by 57.5% year on year, reaching Rs 47.57 crore. This indicates a strong financial performance for Newgen Software.

Another positive aspect of the financial results is the company's high Operating Cash Flow, which has reached Rs 281.41 crore in the last three years. This shows that the company has generated higher cash revenues from its business operations.

In terms of sales, Newgen Software has shown a growth of 25.05% year on year, with net sales reaching Rs 314.72 crore in the quarter ending June 2024. This indicates a positive sales trend in the near term for the company.

Moreover, the company has a high Dividend Payout Ratio (DPR) of 22.22% in the last five years, which shows that it is distributing a higher proportion of its profits as dividends to its shareholders.

However, there are some areas that need improvement for Newgen Software. The company's Non Operating Income is 36.69% of its PBT, which indicates a high income from non-business activities. This may not be a sustainable business model in the long run. Additionally, the Non Operating Income has been consistently increasing in the last five quarters, reaching a high of Rs 22.56 crore. This may not be a sustainable trend for the company.

Overall, Newgen Software has shown a positive financial performance in the quarter ending June 2024. With a strong growth in PBT, PAT, and sales, and a high dividend payout ratio, the company is on a positive trajectory. However, it is important for the company to address the issue of high non-operating income and ensure sustainable growth in the long run. Based on these financial results, MarketsMOJO has given a 'Buy' call for Newgen Software's stock.