This mid-cap IT stock is down 46% from record high; still not a buy?

Shares of Newgen Software Technologies Ltd extended their sharp decline for the second straight session on Friday. The stock slumped 5.70 per cent to hit a day low of Rs 968. At this level, it has plunged 46.09 per cent from its all-time high of Rs 1,795.50, recorded on January 15 this year.

The ongoing correction in the stock follows the announcement of its June 2025 quarter results. The mid-cap IT company reported a 4.5 per cent year-on-year (YoY) rise in consolidated net profit to Rs 49.72 crore during Q1 FY26, compared with Rs 47.57 crore in the same quarter last year. However, net profit declined sharply by 54 per cent on a quarter-on-quarter (QoQ) basis.

Revenue from operations for the quarter stood at Rs 320.66 crore, marking a nearly 2 per cent increase from Rs 314.72 crore in Q1 FY25. On a sequential basis, revenue fell over 25 per cent from Rs 430 crore in the previous quarter.

What analysts say

"Newgen Software has been in a consolidation phase. The stock corrected after nearing the Rs 1,800 level. The Q1 FY26 results were flattish on a YoY basis but saw a steep sequential decline. Investors with a medium- to long-term view can continue to hold the stock," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

"The counter continues to face resistance near its falling trendline on daily charts. The stock has been witnessing selling pressure accompanied by strong volumes -- a sign of bearish sentiment. The overall technical structure remains weak, and as long as the stock stays below Rs 1,070, fresh positions should be avoided in the near term," said Drumil Vithlani, Technical Research Analyst at Bonanza.