Our 42th company in the Series of Best Stocks to Buy in India for Short term 2023 is Newgen Software Technologies Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Newgen Software Technologies provides business process management, enterprise content management, customer communication management, document management system, and workflow and process automation software.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹2,506cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 15.27
Sector PE Ratio: 26.06
PE Ratio of this company is low than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 3.09
Sector PB Ratio : 7.22
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield :1.25%
Sector Dividend Yield : 1.86%
Dividend Yield of this company is low than Sector. Dividend of this is Average than the peers of this company.
ROE: 20.28%
ROCE: 23.90%
ROE (Return on equity) and ROCE (Return on capital equity) is Good.
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2022 | 808.87 | 164.21 |
| 2021 | 687.66 | 126.48 |
| 2020 | 681.72 | 72.74 |
| 2019 | 641.02 | 102.21 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2022 | 2021 | 2020 | 2019 |
| 291.48 | 254.87 | 321.83 | 245.79 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2022 ,Company have 291.48 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2022 | 2021 | 2020 | 2019 |
| 130.08 | 203.99 | 46.26 | 30.30 |
Debt Level: Newgen Software Tech has more cash than its total debt.
Reducing Debt: Newgen Software Tech debt to equity ratio has reduced from 15.5% to 0.8% over the past 5 years.
Debt Coverage: Newgen Software Tech debt is well covered by operating cash flow (1503.3%).
Interest Coverage: Newgen Software Tech earns more interest than it pays, so coverage of interest payments is not a concern.
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2022 | 55.16% | 15.62% | 2.72% | 3.41% | 23.09% |
| Mar 2022 | 55.16% | 14.75% | 3.99% | 2.81% | 23.29% |
| Dec 2021 | 55.16% | 15.71% | 4.62% | 2.86% | 21.65% |
| Sep 2021 | 55.16% | 17.48% | 4.67% | 2.95% | 19.75% |
Above table showing there is no big change in Promotor Holding which is 55.16% in June 2022. FIIs invested in June 2022 with 15.62% and retail investor is 23.09% .
Investment Checklist for Newgen Software Technologies Ltd
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The company is currently profitable
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Earnings are forecast to grow by an average of 20.6% per year for the next 3 years
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Debt level is low and not considered a risk
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Share price has been stable over the past 3 months
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The company’s earnings are high quality
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Profit margins decreased but not substantially
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They have sufficient analyst coverage
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Shareholders have not been meaningfully diluted in the past year or recently listed
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Revenue is meaningful (₹8B)
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Market cap is meaningful (₹25B)
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Newgen Software does not have negative shareholders equity.
According to its historical performance we can predict stock target.
[membership_protected_content user=non-member]
Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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[membership_protected_content]
Entry Buying Zone : 300 to 340
Target: 500 (50% Upside)
Time Horizon: 6-8 Months
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
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Hope you liked Our 42th company in the Series of Best stocks to buy in India for short term 2023. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss.