Business looks promising & our profitability momentum will continue in future as well: Diwakar Nigam, CEO, Newgen Software
Diwakar Nigam, CEO, Newgen Software, talks about the September quarter numbers, Business from the BFSI segment, deal wins and cloud business during a candid chat with Swati Khandelwal, Zee Business.
Diwakar Nigam, CEO, Newgen Software, talks about the September quarter numbers, Business from the BFSI segment, deal wins and cloud business during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
Q: Newgen Software has reported good numbers in the September quarter. Profit shoots up more than 3 times, revenue increased by more than 17% and same was the case with operating margin shooting. Let us know what led to this result and do you think that the momentum is sustainable?
A: Our work is on the digital platform and we make solutions on it, which is the best package that can be used from anywhere. I think its relevance increases a lot during the COVID and this is why our existing customers gave a lot of business to us and we made systems for them because of which they were able to use their systems. This is turning into a new normal, now, and everyone will wish to have systems in which their people can participate from anywhere and complete the desires and work of the customer. So, I can say that things will continue in the same manner in future as well. Besides, around 70% of our business comes from outside, so our business will grow further in the way in which countries will open up. We got around 17 new orders in this quarter. We think that we will get more orders in the coming times and the profitability should continue to be there.
Q: In terms of verticals. BFSI has a contribution of around 55% in your business. Are you seeing green shoots in the BFSI across all geographies and what is the outlook on this specific vertical? Also, tell us the kind of momentum you are seeing in other verticals?
A: In banking, digital is becoming the most important thing. Every bank wants to convert the business into digital business so that they can operate from anywhere and work from anywhere. It also brings in the efficiency in the whole business because people can work from anywhere, people can go and open accounts on mobiles and they can sit at their home and do things. So, I think this is the platform, which is going to be much more popular in the coming time. People have realized that systems should be good so that they can work from anywhere and participate in the business. We are seeing continuous growth in banking. Also, in countries like Africa and the Middle East, I think there will be a major overhaul and people will go into this kind of things. Even in the US and Australia, we are seeing traction because the existing system in these countries have turned very old and there is a need to make them new in a way that people can work from anywhere. So, I think we are seeing more than green shoots and it is just not that we are seeing but there is going to be a huge uplift in the business.
Q: You have said that there was 17 deal win in the quarter and similar numbers are visible in the future. Can you tell us the expected quantum of deals?
A: We have got orders of around Rs 34-35 crore in this quarter. And going forward, we see much more because our third and fourth quarters are the bigger quarters for us. The first and second quarters are normal quarters and the third and fourth quarters are much bigger quarters. So, we are seeing very-very large numbers in coming time. We are also working now with big BFSI especially in the developed world in the US, Australia and the UK, and they're also we are seeing huge pipelines and many possibilities of new orders
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Q: Cloud revenue has seen a good spike of around 42% in this quarter. What is your outlook for the next two quarters for the segment?
A: Continuity is the best part of cloud revenue, which means we will get at least what we have with us at present. Now the question is how much more we can grow, then I think we are getting more and more order in the cloud especially in the developed world. Cloud is slightly slow in India and the Middle East but in the US almost all the business is on cloud-only. So, we see tremendous growth in the cloud business in the coming years.
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