Nucleus Software Exports Shares Jump 80% In Two Weeks

Shares of Nucleus Software Exports Ltd. hit the 10% upper circuit limit on Thursday. The stock has jumped nearly 80% in the last two weeks after it reported a nearly threefold rise in net profit for the fourth quarter of FY23.

Shares of Nucleus Software Exports Ltd. surged 10% to Rs 1,119.15 apiece as of 11:02 a.m. on Thursday, compared to a 0.19% advance in the benchmark Nifty 50.

The stock hit the 10% upper circuit intraday. The scrip has gained 79.92% in the last two weeks, since May 22.

Total traded volume stood at 2.9 times its 30-day average. The relative strength index was at 90, implying that the stock may be overbought.

One analyst tracking the company maintains a 'buy' rating on the stock, according to Bloomberg data. The average 12-month consensus price target implies a potential downside of 40.1%.

Last week, the company reported a nearly threefold rise in net profit to Rs 67.7 crore, beating the Bloomberg estimate of Rs 25.5 crore.

Nucleus Software Q4 FY23 (Consolidated, YoY)

• Revenue up 34.7% at Rs 206.2 crore. (Bloomberg estimate: Rs 159.3 crore)

• Ebitda is up 232.3% at Rs 82.7 crore.

• Ebitda margin at 40.1% vs. 16.3%

• Net profit is up 269.9% at Rs 67.7 crore. (Bloomberg estimate: Rs 25.5 crore.)

"While growth has been primarily led by revised AMC prices, the increase is a one-time phenomenon," Vishnu R Dusad, managing director at Nucleus Software, told BQ Prime's Niraj Shah. 

"I'm confident that this rebalancing will be successful for all the stakeholders, and I see no reason why, despite the increase in price, our customers would feel any interruption in value addition in the future," he said.