On April 28, 2025, Nagarro shares experienced a dramatic loss of up to 11.6%, falling to €59.20. The reason was the postponement of the publication of the 2024 annual financial statements and the business report, originally scheduled for April 30, now deferred to April 29 (preliminary results) and May 15, 2025 (full report). According to the company, complex issues related to revenue recognition with the new auditor need to be clarified.
Background and Implications
The bank Oddo BHF responded immediately by downgrading its rating from “Outperform” to “Neutral.” Additionally, there are concerns about the exclusion from the SDax should the delay continue. This could have similar consequences as previously seen with Varta and Evotec. Timely report submission is essential for remaining in the index. Questions regarding the proper accounting for acquisitions and EBITDA calculation are raised, although Nagarro emphasizes a stable operational performance.
Market Reactions in Detail
The stock fell from a six-month high of €102.80 to below €59, equivalent to a loss of over 40% in just a few months. High trading volumes, for instance on April 23 with around 14,949 shares traded at an average price of €68.34, indicate uncertainties.
This situation highlights the sensitivity of markets to transparency issues among fast-growing IT service providers, especially when index memberships are at stake. Investors perceive the delay as an indication of potential balance sheet risks or governance weaknesses.