Newgen Software shares continued to climb for a second straight session after Jefferies India upped its target price for the stock on the back of strong March 2024 numbers.

What Happened: Jefferies maintained a buy rating on Newgen Software and raised the target price from ₹1,070 to ₹1,150.

Per the analyst, annuity and license sales drove Newgen’s Q4 growth, which was ahead of estimates. Jefferies notes that with core markets leading the strong growth outlook, strong growth visibility will likely sustain premium valuations in the future.

Newgen Software Technologies reported a 31.67% increase in consolidated net profit for the fourth quarter ending March 2024, reaching ₹105.26 crore. This compares to a net profit of ₹79.94 crore in the same period last year.

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According to a BSE filing, strong growth in the Europe, Middle East, and Africa (EMEA) and India regions drove the company’s revenue from operations up by 23.01% year-on-year to ₹375.26 crore, from ₹305.05 crore in Q4FY23.

The banking vertical generated the largest share of revenue at 73%, followed by insurance at 8%, and government/public sector units at 5%. The profit after tax for the year stood at ₹252 crore, a 42% increase from ₹177 crore in FY23.

Price Action: Newgen Software Technologies shares were up 5.25% at ₹977.85 on Tuesday afternoon.

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