Revenue Growth and Profitability Trends
Newgen Software’s net sales have shown a robust upward trend, increasing from ₹620.64 crores in March 2019 to ₹1,486.88 crores by March 2025. This represents a compound growth trajectory, with notable acceleration in recent years. The total operating income mirrors this pattern, reflecting the company’s ability to scale its core business operations effectively.
Operating profit before depreciation, interest, and tax (PBDIT) excluding other income rose significantly from ₹127.72 crores in March 2019 to ₹376.20 crores in March 2025. When factoring in other income, operating profit reached ₹439.78 crores in the latest fiscal year, underscoring improved operational efficiency and income diversification.
Profit after tax (PAT) has also expanded impressively, climbing from ₹102.21 crores in March 2019 to ₹315.24 crores in March 2025. This growth is supported by a steady PAT margin, which stood at 21.2% in the most recent year, reflecting strong profitability relative to revenue. Earnings per share (EPS) followed a similar positive trend, reaching ₹22.48 in March 2025, indicating enhanced shareholder value.
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Cost Structure and Margins
The company’s expenditure profile reveals a disciplined approach to cost management. Employee costs have risen in line with revenue growth, reaching ₹741.04 crores in March 2025, reflecting investment in human capital to support expansion. Other expenses also increased but at a controlled pace, contributing to an overall total expenditure of ₹1,110.68 crores excluding depreciation.
Operating profit margins have remained healthy, with a slight fluctuation over the years. The margin stood at 25.3% in March 2025, up from 20.58% in March 2019, indicating improved operational leverage. Gross profit margins similarly improved, reaching 29.26% in the latest fiscal year, signalling effective cost control and pricing power.
Balance Sheet Strength and Asset Quality
Newgen Software’s balance sheet has strengthened considerably. Shareholders’ funds increased from ₹549.07 crores in March 2020 to ₹1,516.43 crores in March 2025, reflecting retained earnings and capital infusion. The company has successfully reduced its total debt to zero by March 2025, down from ₹74.53 crores in March 2020, enhancing its financial stability and reducing interest burden.
On the asset side, total assets grew from ₹848.42 crores in March 2020 to ₹2,023.73 crores in March 2025. Current assets, including cash and bank balances, have expanded significantly, with cash and bank balances rising to ₹415.50 crores. Net current assets also improved, supporting liquidity and operational flexibility.
Capital expenditure is reflected in the gross block, which increased steadily to ₹251.60 crores, while accumulated depreciation rose proportionately, indicating ongoing investment in fixed assets and technology infrastructure.
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Cash Flow and Financial Flexibility
Cash flow from operating activities has shown a positive trajectory, increasing from ₹90 crores in March 2020 to ₹214 crores in March 2025. Despite fluctuations in working capital, the company has maintained healthy cash generation, supporting its investment and financing activities.
Investing activities reflect consistent capital expenditure, with outflows of ₹167 crores in the latest year, signalling ongoing commitment to growth and technology enhancement. Financing activities have seen net outflows, consistent with debt repayment and prudent capital management.
Overall, Newgen Software’s net cash position remains strong, with closing cash and cash equivalents at ₹103 crores in March 2025, providing a solid liquidity buffer.
Outlook Based on Historical Performance
Newgen Software’s historical financial performance illustrates a company on a steady growth path, marked by expanding revenues, improving profitability, and a robust balance sheet. The elimination of debt and strong cash flows enhance its financial flexibility, positioning it well for future opportunities and challenges in the competitive software sector.
Investors may find the company’s consistent margin improvement and disciplined cost management particularly encouraging, alongside its ability to generate shareholder value through rising earnings per share and book value per share.
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