The broking firm Jefferies has raised the target price on Newgen Software to Rs 1,070 from Rs 870. However, it has kept the rating unchanged to “Buy” on the stock of the company as the brokerage house believes the “growth momentum to sustain.”

The brokerage house has also raised the earnings per share estimate to 5% for FY 24 to FY 26 as it sees higher margin estimates and lower tax rates from SEZ benefitting the company. Further, it expects the company to deliver 26% earnings per share on a compounded annual growth rate over FY 25 – FY26 on the back of “ the strong growth outlook and visibility.”

Strong growth and consistent execution have quadrupled the stock over the last year, said Jefferies. 

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On the risk front, the brokerage house believes write-offs on receivables, weaker macroeconomic conditions, lower traction in the US, higher competition from Tier 1 players, and adverse currency movement can hurt the growth. 

Newgen declared its third-quarter results on Tuesday. The company reported a jump of 44% in its net profit to Rs 68.3 crore. Its revenue came in at Rs 324 crore, up 27% from the same period a year ago.