Nucleus Software Exports Q1 Review- Disappoints But Pricing Revisions To Revive Earnings Hereon: Dolat Capital

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Dolat Capital Report

Nucleus Software Exports Ltd. reported down 15.8% QoQ revenue decline (our estimate: up 3%). Impact was led by deferment in some asset management company renewals which were not recognised in Q1 given slower acceptance of revised price hike in contracts. It has offered longer duration for client to accommodate the same.

Reported operating profit margin of 7.4% versus estimate of 10.1% and Ebit of Rs 95 million as attrition challenge is yet not resolved (although lowered in July/August).

Employee expenses were down by 13% QoQ due to 4% decline in employee count. Other expenses were almost flat (up 1.4% QoQ).

Nucleus Software's order book stood at Rs 5.6 billion up 0.1% QoQ (up 5.2% YoY basis). Order-to-revenue coverage of 123% in product business, suggest sustained momentum going forward.

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