Newgen Software Technologies Q2 FY27 results: net profit up 6.3% to ₹86.88 crore, revenue up 5.4%

How did Newgen Software Technologies perform in Q2 FY27?

Newgen Software Technologies reported consolidated revenue of ₹422.24 crore for Q2 FY27, up 5.4% from ₹400.79 crore in Q2 FY26. EBITDA was ₹109.05 crore, up 6.5%, and the EBITDA margin was 25.8% against 25.5%. Profit before tax was ₹110.15 crore, up 4.6%, and net profit was ₹86.88 crore, up 6.3%, with basic EPS of ₹6.16 against ₹5.82. On a standalone basis, revenue was ₹369.53 crore and net profit was ₹79.5 crore.

Against Q1 FY27, revenue rose 18.4% from ₹356.68 crore, total income was up 10.4% to ₹433.68 crore, and EBITDA rose 95.0% to ₹109.05 crore. The EBITDA margin widened by 10.1 percentage points to 25.8%, while net profit rose 38.3% to ₹86.88 crore and basic EPS rose 38.7% to ₹6.16. The previous quarter included other income of ₹36.27 crore, against ₹11.44 crore in Q2 FY27.

The quarter covered July–September 2026. Total income was ₹433.68 crore against ₹414.02 crore a year earlier, an increase of 4.7%. Total expenses were ₹323.53 crore, up 4.8% from ₹308.68 crore, and there was no exceptional item in either period.

What changed in Newgen Software Technologies' costs and profit?

Total expenses rose 4.8% from ₹308.68 crore to ₹323.53 crore, below the 5.4% rise in revenue. Employee cost was ₹191.47 crore, up ₹2.87 crore or 1.5% from ₹188.60 crore, while other expenses rose ₹11.94 crore or 10.9% to ₹121.73 crore. Depreciation rose 3.6% to ₹9.43 crore and finance costs fell 23.7% to ₹0.90 crore.

Other income was ₹11.44 crore, down ₹1.78 crore or 13.5% from ₹13.22 crore in the year-ago quarter. There was no exceptional item in Q2 FY27 or Q2 FY26. Tax expense was ₹23.27 crore, down ₹0.32 crore or 1.4% from ₹23.59 crore. Profit before tax rose 4.6% to ₹110.15 crore and net profit rose 6.3% to ₹86.88 crore.

Against the previous quarter, total expenses rose 4.1% from ₹310.84 crore to ₹323.53 crore, while other expenses rose 10.0% to ₹121.73 crore and employee cost rose 0.7% to ₹191.47 crore. Other income fell 68.5% from ₹36.27 crore to ₹11.44 crore, and tax expense rose 20.6% to ₹23.27 crore.

How did the first half of FY27 go?

For the first half of FY27, consolidated revenue was ₹778.92 crore, up 8.0% from ₹721.45 crore in H1 FY26. Total income rose 8.2% to ₹826.63 crore from ₹764.06 crore. Profit before tax was ₹192.27 crore, up 13.5%, and net profit was ₹149.7 crore, up 13.9% from ₹131.46 crore.

Basic EPS for H1 FY27 was ₹10.6, up 13.1% from ₹9.37 in H1 FY26. The half-year revenue growth of 8.8% cited by management on the earnings call is the figure the company used for H1 FY27 revenue growth.

What do the balance sheet and cash flow show?

As of 30 September 2026, total assets were ₹2422.03 crore, lower than ₹2442.47 crore at 31 March 2026. Total equity rose to ₹1852.72 crore from ₹1777.35 crore, and borrowings were nil at both dates. Cash and cash equivalents rose to ₹145.92 crore from ₹103.53 crore, while trade receivables fell to ₹634.95 crore from ₹708.24 crore and trade payables were ₹53.38 crore against ₹55.07 crore.

For H1 FY27, net cash from operating activities was ₹107.97 crore, against ₹89.58 crore in H1 FY26. Investing cash flow was ₹23.78 crore against an outflow of ₹40.23 crore, and financing cash flow was an outflow of ₹91.72 crore against an outflow of ₹74.66 crore. Capital expenditure was ₹8.65 crore, compared with ₹2.57 crore a year earlier.

How has Newgen Software Technologies done over the last 8 quarters?

Revenue rose year on year in each of the last eight quarters. Profit after tax was ₹86.88 crore in Q2 FY27, below the ₹108.34 crore recorded in Q4 FY25 and the ₹106.3 crore in Q4 FY26, and above the ₹49.72 crore low of Q1 FY26.

The EBITDA margin was 25.8% in Q2 FY27, up from 15.7% in Q1 FY27 and below the 33.6% peak in Q4 FY26. Revenue reached its highest level of ₹452.67 crore in Q4 FY26, against ₹356.68 crore in Q1 FY27 and ₹422.24 crore in Q2 FY27. Profit after tax has risen year on year in each of the last two quarters.

Which businesses drove the quarter?

EMEA was the largest reported segment by revenue, with ₹148.7 crore, up 19.4% from ₹124.53 crore in the year-ago quarter. Segment EBIT was ₹51.96 crore against ₹35.01 crore, and the EBIT margin was 34.9%. USA revenue rose 17.1% to ₹111.18 crore from ₹94.98 crore, with EBIT of ₹36.16 crore against ₹29.7 crore and an EBIT margin of 32.5%.

India revenue fell 12.6% to ₹103.0 crore from ₹117.83 crore, with EBIT of ₹8.79 crore against ₹17.85 crore and an EBIT margin of 8.5%. APAC revenue fell 6.4% to ₹59.36 crore from ₹63.45 crore, with EBIT of ₹13.52 crore against ₹20.93 crore and an EBIT margin of 22.8%.

What else did the company announce?

The board approved a scheme of arrangement for the amalgamation of Newgen Computers Technologies Limited, a wholly owned subsidiary, with and into Newgen Software Technologies Limited. The appointed date is 1 April 2026, and the scheme is subject to approvals from shareholders and creditors as required, the National Company Law Tribunal, and other authorities. No stock exchange no-objection letter was required because the transferor is a wholly owned subsidiary.

The company also filed an investor presentation for the quarter and half year ended 30 September 2026 on 23 October 2026. A separate same-day filing stated that Diwakar Nigam, Chairman and Managing Director, continues to be indisposed and unavailable to discharge his duties in a regular manner, and that the company has arrangements in place for business continuity. No dividend or fund raise was reported in the same-day filings.

What did Newgen Software Technologies' management say?

Management maintained double-digit revenue growth guidance for FY27 and the 20%-22% net margin guideline. CEO Tarun Nandwani said: "Yes, we are confident of meeting our double-digit growth." Management expects materially better growth in Q3-Q4 FY27, sequential implementation revenue growth similar to Q2, and margins to be maintained and possibly expanded in coming quarters. Collections are expected to improve from Q3 FY27, particularly in the Middle East, with no quantified DSO target.

On the earnings call, management said EMEA growth of 19.4% was supported by normalisation of travel in the region and demand for enterprise automation, while India and APAC declines reflected timing and execution variability. SaaS revenue grew 36.4%, subscription revenue surpassed license revenue, and license revenue declined 19.2% year on year. Net receivables were INR642 crores and net DSO was 144 days. Co-Founder and Executive Vice Chairman T. S. Varadarajan said: "Customers are increasingly moving from AI experimentation to production, and they are asking for explainability, traceability, and control."

Management identified risks including delayed RFP and deal closures in India and APAC, timing volatility from large license deals and currency, Middle East collection delays, long proof-of-concept cycles in banking, and AI revenue not being separately identifiable for disclosure. Head of Investor Relations Deepti Mehra Chugh said: "I think it's too early. We internally are working on the AI revenues being identified within the organization and being incorporated." Management said AI deals are 20%-40% larger, with 10 AI-based deal bookings reported in the first half.

How did Newgen Software Technologies shares react?

The stock was up 5.5% five minutes after the filing appeared in the market, up 2.0% after 15 minutes and up 5.1% after 30 minutes. On the reaction day it fell 3.0% from the previous close of ₹474.0 to a base price of ₹448.9, against a 2.0% median fall for the Computers - Software & Consulting industry.

How did other Computers - Software & Consulting companies do?

Among the 33 Computers - Software & Consulting companies compared for this quarter, the median revenue growth was 13.6%. Twenty-eight peers grew revenue faster than Newgen Software Technologies and five grew more slowly. Of the 32 peers compared for profit, 20 reported higher profit.