ICICI Securities Recommends 'Hold' on Newgen Software, Sets Target at Rs 660

• Newgen Software reported subdued Q3FY26 revenue growth of -0.1% QoQ/5% YoY, affected by fewer large license deals in India and EMEA.
• APAC and US markets showed stronger growth at 7.4% and 20.8% YoY respectively, while annuity revenue saw a strong YoY uptick across AMC, SaaS, and support.
• EBITDA margin remained strong at 26.5% despite wage hikes, supported by AI-led productivity in delivery.
• AI is causing longer deal cycles, particularly in the Indian market; management anticipates continued AMC revenue traction and aims for increased AI-led productivity.
• ICICI Securities reduced the target P/E to 25x (from 35x) and set a Dec’26 target price of INR 660, maintaining a 'Hold' rating based on expected growth recovery in FY27.

Why It Matters: ICICI Securities maintains a 'Hold' rating on Newgen Software with a Rs 660 target, citing subdued growth but expected FY27 recovery.