Newgen Software Technologies reported a 29.42% year-on-year decrease in net profit for the December quarter of the current financial year. The company’s net profit fell to Rs 62.81 crore in Q3, down from Rs 89 crore in the same quarter of the previous financial year. On a quarter-on-quarter basis, the IT firm based in New Delhi saw a 23.3% decline in net profit, compared to Rs 81.74 crore in the previous quarter.
Revenue from operations remained nearly unchanged, decreasing marginally by 0.2% to Rs 400.27 crore from Rs 400.79 crore on a quarter-on-quarter basis, as per the regulatory filing. Despite the profit decline, there was some improvement in operating performance, with EBIT increasing by 3.1% to Rs 97 crore from Rs 93.3 crore in the September quarter.
The EBIT margin improved to 24.2% from 23.3% sequentially. Newgen Software Technologies attributed the impact on profitability to a one-time charge of approximately Rs 35 crore due to the implementation of the new labor code. Excluding this one-time impact, the company stated that its bottom line would have been higher on a quarter-on-quarter basis.
In terms of business performance, the India segment experienced a decline, with revenue dropping to Rs 115.4 crore from Rs 117.8 crore in the previous quarter. Revenue from the EMEA region remained steady at Rs 123.6 crore, while the APAC business saw a slight increase, with revenue rising to Rs 65.32 crore from Rs 63.45 crore. The US business also showed growth, with revenue climbing to Rs 96 crore from Rs 95 crore in the September quarter.
Following this announcement, Newgen Software shares took a hit, plunging nearly 16% to reach an intra-day low of Rs 617.55 on the NSE. By around 2:31 p.m., the stock was trading approximately 15.5% lower at Rs 621.85 apiece. Over the past year, Newgen Software’s share price has dropped by almost 57%.
