Newgen Software (NEWGEN)

FairStock Score: 65/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

At ₹477.70, Newgen is not a stock I can call a bargain. The business quality is real: ROE of 19.96%, ROCE of 27.97%, and debt/equity of only 0.04. Those numbers, with promoters owning 53.52%, point to disciplined capital allocation and a narrow moat. The Piotroski score of 7/9 and Altman Z-Score of 4.24 confirm a sound balance sheet. The latest quarter adds ₹400 Cr of sales and ₹63 Cr of net profit, a healthy 15.75% margin. But my favourite metric, margin of safety, is absent. The Graham Number is ₹227.35, while the market price is ₹477.70; I am paying more than twice the conservative value. The DCF value of ₹24.79 is far lower, and although DCFs depend on assumptions, the gap is too wide to dismiss. Sales growth is only 8.33%, and profits actually fell 3.06%. A PEG ratio near 80 is meaningless; it tells me either earnings growth must explode or the market is paying a fantasy premium. Free cash flow of ₹47 Cr against a ₹7,240 Cr market cap is less than a 0.7% cash yield, and the dividend yield is only 0.98%. The negative EV/EBITDA also needs an explanation before I would trust the operating earnings power. Benjamin Graham reminded us that price is what you pay, value is what you get. Here, I would be paying a high multiple for a 'steady' business with stalled growth. I would rather wait for a better price or evidence of accelerating earnings. For now, Newgen stays on my watchlist, not in my portfolio.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer