Newgen Software Q1 FY27 Results (NSE: NEWGEN)
Signal: Margin expansion
The read
Consolidated margin inflected up after a contracting Q4FY26, with EBITDA margin +200bps YoY to 25.8% on operating leverage — employee costs grew just 4.7% vs revenue +11.2%. PAT at ₹62.82 Cr (+26.3% YoY) but 44.2% came from other income; core operating profit (EBITDA) grew 23.9%. USA and EMEA segments drove revenue growth; India segment was flat. Claims: FY27 EBITDA margin guidance 23-25% — current 25.8% within range; revenue growth improved double-digit at 11.2%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹356.68 Cr | 11.2% | -77.3% |
| EBIT | ₹0.83 Cr | 27.0% | |
| Net profit | ₹0.63 Cr | 26.3% | |
| EPS | ₹4.44 | 25.1% | |
| EBIT margin | 25.8% |
P&L walk
Revenue grew 11.2% YoY to ₹356.68 Cr, with EBITDA margin expanding 200bps to 25.8% on operating leverage — employee costs grew only 4.7% while revenue grew 11.2%, and other expenses grew 17.6%. EBIT at ₹82.98 Cr (+27.0% YoY). PAT at ₹62.82 Cr (+26.3% YoY) benefited from other income of ₹36.27 Cr (44.2% of PBT), a significant non-operating element.
Segments
EMEA segment profit at ₹21.54 Cr leads (38.3% of segment total), driven by 12.1% YoY revenue growth; USA segment profit ₹19.31 Cr also strong (+93.8% YoY). India segment profit low at ₹3.93 Cr, near-flat revenue. APAC profit ₹11.44 Cr at 20.5% margin.
Key positives
- Revenue grew 11.2% YoY, reversing Q4FY26's 5.3% slowdown and returning to double-digit growth.
- EBITDA margin expanded 200bps YoY to 25.8%, driven by operating leverage — employee cost +4.7% vs revenue +11.2%.
- PAT growth of 26.3% YoY outpaced revenue growth, with EPS at ₹4.44 (+25.1% YoY).
- USA revenue surged 27.0% YoY, EMEA +12.1%, APAC +12.1% — broad-based geographic growth excluding India.
- EBITDA grew 23.9% YoY vs revenue +11.2%, a 12.7pp gap confirming operating leverage.
Key concerns
- Other income of ₹36.27 Cr comprised 44.2% of PBT — earnings quality flagged; PAT is substantially propped up by non-operating income.
- Standalone vs consolidated: standalone revenue growth only 8.5% vs consolidated 11.2% — subsidiaries (especially USA) contributed the difference.
- India segment revenue virtually flat (+0.3% YoY) and segment profit low at ₹3.93 Cr — domestic business is a drag.
- QoQ comparisons are meaningless due to Q4FY26 annual spike (Q4 typically highest quarter) — sequential drop of 77% in revenue is seasonal, not a trend.
Earnings quality: includes non-operating other income
Research and educational content only. Not investment advice.