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Dolat Capital Report
Nucleus Software Exports Ltd. reported 5.2% QoQ revenue growth (our estimate: 5.6%) due to softness in order-to-revenue conversion due to lingering impact of supply side challenges (headcount slides nearly 20% YoY).
Nucleus Software reported Ebit margin of 1.4% versus estimate of 2.7% and Ebit of Rs 17 million.
The Ebit margin remains subdued due to the impact of steep wage hikes to control attrition in Q1 and modest revenue growth negating any potential operating leverage.
Order book stood at Rs 5.4 billion up 2.2% QoQ (up 13.3% YoY basis). The net new orders stood at Rs 1.26 billion which is higher than revenue during the quarter (largely implying order conversion delay).
We believe the revenue recovery will be slower than what we expected given continued impact of supply side challenges.
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