Newgen Q2: PAT +6% YoY, margin back in guided band, revenue growth slows to ~5%

Newgen's consolidated Q2 FY27 (quarter ended 30 September 2026) print is a beat-and-recover quarter rather than an unambiguous acceleration: revenue from operations came in at ₹422.24 Cr, up 5.4% YoY from ₹400.79 Cr and a sharp 18.4% QoQ from ₹356.68 Cr, while consolidated PAT rose 6.3% YoY to ₹86.88 Cr (from ₹81.74 Cr) and 38.3% QoQ (from ₹62.82 Cr). EPS (basic) was ₹6.16 versus ₹5.82 a year ago and ₹4.44 last quarter. No exceptional items sit in either the current or year-ago quarter, so these are clean, unadjusted comparisons. The headline QoQ jump is largely mean-reversion from an unusually soft Q1, when the company itself flagged a "volume surge" tied to market factors (disclosed 31 August 2026) that compressed Q1 margins to an OPM of 15.7%/NPM of 16.0%. This quarter's OPM recovered to ~25.8% and NPM to 20.0%, both back in line with — and OPM modestly above — management's guided 23-25% full-year EBITDA margin band, and roughly flat-to-up against the year-ago quarter's 25.6%/19.7%. The margin bridge runs through employee and other operating costs relative to revenue; the filing does not break out annuity-vs-other revenue mix, so that driver can't be confirmed from these figures alone. Against our pre-result preview — which pencilled in revenue of ~₹362 Cr, PAT of ₹62-65 Cr and an EBITDA margin of ~21-22% — the actual print is a clear beat on all three (revenue +16.6%, PAT 34-40% above the range, margin ~4pp above the top end); the Street's 5/0/2 buy-sell-hold split with recently trimmed targets (ICICI Securities BUY at ₹580; others cutting fair value toward ₹615) looks conservative in hindsight on this number. Geographically, EMEA (₹148.39 Cr) and USA (₹111.18 Cr) remain the largest consolidated revenue contributors, with India at ₹102.99 Cr. Standalone growth is notably softer than consolidated — standalone revenue rose just 0.9% YoY and PAT 3.7% YoY versus 5.4%/6.3% consolidated — indicating overseas subsidiaries did the heavier lifting this quarter. The Board also approved, same day, a scheme to amalgamate wholly-owned subsidiary Newgen Computers Technologies into the parent (appointed date 1 April 2026) — a structural reorganisation with no P&L impact this quarter since the subsidiary was already consolidated. Measured against management's own Q1 outlook — "double-digit growth" for the year and EBITDA margins of 23-25% — this quarter's margin delivery is on target, but YoY topline and bottom-line growth (5.4%/6.3%) falls short of the double-digit bar, even though H1 FY27 growth looks better in isolation (revenue +8.0% YoY, PAT +13.9% YoY). No management press release was available to cross-check their own framing of the quarter. Order intake during the quarter — a ₹52.55 Cr US health-insurer deal (28 Sept) and a ₹17.14 Cr Qatar order (21 Sept) — supports the pre-result watch item on large-deal momentum, while a further £1.63M UK deal (16 Oct) and the retirement of the EVP for Global Business Strategy & HR (12 Oct) both fall after this quarter's close and will show up in Q3 commentary instead.