Newgen Software Technologies — Peer Comparison

How the peer fair value is calculated and which companies were used as benchmarks.

Peer selection

Peers are selected from the same IT services & consulting industry. 8 companies were matched as valid comparables.

Same-industry peers share similar business models, cost structures, and growth prospects — making them the most appropriate benchmarks for valuation multiples.

Peer comparison table

IT services & consulting · 8 peers · sector medians shown

Better than medianWorse than median

Company	Mkt Cap	P/E	P/B	EV/EBITDA	ROE	Net Margin	Rev CAGR 3y
Newgen Software Technologies NEWGEN · you	₹6,825 Cr	22.5×	3.8×	18.8×	16.9%	19.1%	17.4%
Sector median	—	35.5×	5.8×	18.4×	18.5%	11.6%	23.6%
Mphasis MPHASIS	₹45,168 Cr	24.0×	4.2×	15.3×	17.3%	11.7%	4.7%
L&T Technology Services LTTS	₹37,293 Cr	31.1×	5.9×	18.4×	19.8%	11.6%	7.6%
Hexaware Technologies HEXT	₹33,770 Cr	25.9×	5.5×	14.5×	21.7%	10.2%	13.4%
Inventurus Knowledge Solutions IKS	₹28,887 Cr	39.8×	10.3×	26.7×	25.8%	22.6%	45.8%
Netweb Technologies India NETWEB	₹25,212 Cr	122.0×	34.9×	88.5×	28.5%	9.4%	69.9%
Affle 3i AFFLE	₹21,141 Cr	46.2×	5.8×	34.7×	12.5%	16.8%	23.6%
IDream Film Infrastructure Company Limited IDREAM	₹16,487 Cr	-60050.0×	-3753.1×	—	6.1%	—	—
E2E Networks Limited E2E	₹13,635 Cr	—	7.8×	—	-0.9%	-6.3%	54.8%

Peer comparison verdict

Newgen trades at a discount to sector peers on P/E (22.5× vs median 35.5×). This may signal undervaluation — or reflect lower expected growth or higher perceived risk versus the peer group.

How the peer fair value is calculated

Three valuation methods are weighted by sector. Each gives a fair value based on how sector peers are currently priced.

Method breakdown

50% weight · 5 peers

Sector median PE31.1×

Fair value via PE₹655

20% weight · 6 peers

Sector median PB5.8×

Fair value via PB₹726

EV/EBITDA

30% weight · 5 peers

Sector median EV/EBITDA18.4×

Fair value via EV/EBITDA₹462

Blended peer fair value₹611

Why median? Why these weights?

Median over mean: The sector median is used instead of the average because valuation multiples have extreme outliers — one high-growth company at 200× P/E would dramatically skew a mean. The median gives the middle value in the peer set, which better represents typical pricing.

Sector-specific weights: The weight given to each method reflects what matters most in this sector. For banks, P/B dominates because their value is tied to book assets. For IT companies, P/E carries the most weight because earnings quality matters more than asset base. For capital-intensive businesses, EV/EBITDA accounts for varying debt levels across peers and removes financing structure bias.

Limitations of peer comparison

Peer comparison assumes comparable companies are truly comparable — which is never perfectly true. Sector classifications can be imperfect: a conglomerate classified as "IT" may also have significant manufacturing revenue. Small peer counts (below 5) reduce confidence, as a single outlier can skew the sector median. When the entire sector is broadly expensive, peer comparison will show even an expensive stock as "fairly valued" relative to its peers.

The peer fair value shown is an algorithmic estimate based on publicly available financial data. It is not investment advice or a recommendation to buy, sell, or hold any security. Please consult a SEBI-registered investment adviser before making any investment decision.