Newgen Software Q3 Results: Stock tanks over 15% after labour code impacts profit, no topline growth

Shares of Newgen Software Ltd. fell as much as 15% on Tuesday, January 20, in response to its third quarter results.

The company's net profit during the quarter fell by 23.2% to ₹63 crore from ₹82 crore last quarter. The company stated that there was a one-time impact of the new labour code worth ₹35 crore, which impacted its profitability. Adjusted for that, the bottomline would have been higher on a sequential basis.

Revenue for the quarter remained unchanged at ₹400 crore from ₹401 crore from the July-September quarter

Earnings Before Interest and Tax (EBIT) grew by 3.1% to ₹97 crore from ₹94.4 crore last quarter. EBITDA margins though, expanded by 70 basis points from the previous quarter to 24.2% from 23.5%.

Newgen Software's India business declined to ₹115.4 crore from ₹117.8 crore, while the EMEA business topline remained flat at ₹123.6 crore. APAC revenue saw a small increase to ₹65.32 crore from ₹63.45 crore, while the US business revenue increased to ₹96 crore from ₹95 crore in the September quarter.

Shares of Newgen Software are now trading 15% lower on Tuesday after the earnings announcement at ₹627.25. The stock is down 57% over the last 12 months.