Newgen profit jumps 38.3% quarter on quarter to 86.9 crore rupees in second quarter
Key Facts
Newgen Software raised its consolidated net profit 38.3% quarter on quarter to 86.9 crore rupees in the September 2026 quarter, compared with 62.8 crore in the June quarter, according to NDTV Profit. The results cover the second quarter of fiscal 2027, which ended in September, and the growth rate is not a comparison with the same period a year earlier. Revenue for the quarter rose 18.4% to 422 crore rupees from 357 crore in the previous quarter. Profit and revenue growth coincided with improved operating profitability indicators, while the stock fell after the announcement. The quarter-on-quarter comparison puts the quarter in a different context from the annual performance reported by the company.
Year on year, consolidated revenue grew 5% in the second quarter of fiscal 2027 to 422 crore rupees, compared with 401 crore in the corresponding quarter of fiscal 2026, according to the company statement. This shows that the 18.4% quarterly increase reflects a comparison of the September quarter with the June quarter, while annual revenue growth was slower. Recurring revenue reached 268 crore rupees, up 15% year on year, while subscription revenue reached 150 crore, growing 18%. Executive Vice Chairman and Co-founder T. S. Varadarajan said the quarter saw "healthy revenue growth, resilient margins and a stronger recurring revenue mix." He added that the company remains focused on operational efficiency and cost control.
Profit before interest and tax was 99.6 crore rupees in the September quarter, up from 46.7 crore in the June quarter, according to NDTV Profit. The margin widened to 23.6% from 13.1% over the same period, reflecting a quarterly improvement in operating returns on revenue. Year on year, the company said its net profit margin was 20.6% in the quarter. Employee costs as a share of revenue also fell to 45% from 47% in the second quarter of fiscal 2026. Varadarajan said the company had recorded resilient margins, while its figures showed an improvement in the employee cost-to-revenue ratio.
The company reported varied revenue growth across regions during the quarter, saying Europe, the Middle East and Africa recovered and recorded a 19.4% annual increase. Revenue from the Americas grew 17.1% year on year, according to the statement. Newgen added nine enterprise customers during the quarter and said it recorded 10 bookings for AI-based deals in the first half of fiscal 2027. Among the contracts announced by the company was an agreement with a U.S. health insurer to supply, implement and host a complaints, appeals and grievances solution. The contract was valued at 5.5 million U.S. dollars and runs for three years.
Despite quarterly growth in profit and revenue and a wider operating profit margin, Newgen shares were trading at 463 rupees on the NSE after the results announcement, down 2.37% from the previous close of 475.80 rupees, according to NDTV Profit. This was an intraday price reported by the source on 23 October 2026, not a daily close. The source did not announce a specific reason for the decline, so the move should not be attributed to details of the results or profit-taking. On the credit front, the company said CRISIL reaffirmed its A1 short-term rating for debt instruments and facilities. The fiscal 2026 results statement had cited annual revenue of 1,574 crore rupees, up 6%, and a 36% increase in SaaS revenue.
In a corporate move separate from the quarterly figures, the board approved a scheme to merge wholly owned subsidiary Newgen Computers Technologies Ltd. into the parent company. The scheme set 1 April 2026 as its effective date, according to NDTV Profit. The proposed merger remains subject to the necessary statutory and regulatory approvals, including those of the National Company Law Tribunal, shareholders and creditors where required. Upcoming engagements include the company's management taking part in a non-deal roadshow in Mumbai from 26 to 28 October 2026. The NSE said management will hold one-on-one meetings with investors during the roadshow.