Newgen Software Technologies Analysis

dividend

Pros

• Dividends paid are well covered by earnings (5.3x coverage).
• Dividends after 3 years are expected to be well covered by earnings (4.9x coverage).
• Newgen Software Technologies's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).

Cons

• Newgen Software Technologies has only been paying a dividend for 2 years, and since then there has been no growth.
• Newgen Software Technologies has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
• Newgen Software Technologies's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Newgen Software Technologies's earnings are expected to grow significantly at over 20% yearly.
• Newgen Software Technologies's earnings growth is expected to exceed the India market average.
• Newgen Software Technologies's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Newgen Software Technologies's earnings are expected to exceed the low risk growth rate next year.
• Newgen Software Technologies's net income is expected to increase by more than 50% in 2 years time.
• Performance (ROE) is expected to be above the current IN Software industry average.
• An improvement in Newgen Software Technologies's performance (ROE) is expected over the next 3 years.
• Newgen Software Technologies's revenue growth is expected to exceed the India market average.

Cons

• Cash flow for Newgen Software Technologies is expected to increase but not above the 50% threshold in 2 years time.
• Newgen Software Technologies is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Newgen Software Technologies's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Newgen Software Technologies's revenue is expected to grow by 12.8% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Newgen Software Technologies is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Newgen Software Technologies is profitable, therefore cash runway is not a concern.
• Newgen Software Technologies is profitable, therefore cash runway is not a concern.
• Debt is well covered by operating cash flow (120.8%, greater than 20% of total debt).
• Debt is covered by short term assets, assets are 8.1x debt.
• Newgen Software Technologies's cash and other short term assets cover its long term commitments.
• The level of debt compared to net worth has been reduced over the past 5 years (21.1% vs 13.6% today).
• Interest payments on debt are well covered by earnings (EBIT is 7.8x coverage).
• Newgen Software Technologies's level of debt (13.6%) compared to net worth is satisfactory (less than 40%).

Cons

• High level of physical assets or inventory.

management

Pros

• The tenure for the Newgen Software Technologies board of directors is about average.
• Diwakar's compensation has been consistent with company performance over the past year, both up more than 20%.
• The tenure for the Newgen Software Technologies management team is about average.

Cons

• Diwakar's remuneration is higher than average for companies of similar size in India.

misc

Pros

Cons

• Newgen Software Technologies is covered by less than 3 analysts.
• Newgen Software Technologies has significant price volatility in the past 3 months.

past

Pros

• Newgen Software Technologies's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.
• Newgen Software Technologies used its assets more efficiently than the IN Software industry average last year based on Return on Assets.

Cons

• Newgen Software Technologies's 1-year earnings growth is negative, it can't be compared to the 5-year average.
• Newgen Software Technologies's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
• Newgen Software Technologies has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Newgen Software Technologies's 1-year earnings growth is negative, it can't be compared to the IN Software industry average.

value

Pros

• Newgen Software Technologies is good value based on expected growth next year.

Cons

• Newgen Software Technologies's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
• Newgen Software Technologies's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
• Newgen Software Technologies is overvalued based on assets compared to the IN Software industry average.
• Newgen Software Technologies is overvalued based on earnings compared to the IN Software industry average.
• Newgen Software Technologies is overvalued based on earnings compared to the India market.
• 540900 underperformed the Software industry which returned -27.7% over the past year.
• 540900 underperformed the Market in India which returned -14.5% over the past year.
• BSE:540900 is down -1.4% underperforming the Software industry which returned 11.5% over the past month.
• BSE:540900 is down -1.4% underperforming the market in India which returned 8% over the past month.