Nucleus Software Exports Limited Q3 FY23 Earnings Conference Call Insights

Key highlights from Nucleus Software Exports Limited (NUCLEUS) Q3 FY23 Earnings Concall

Management Update:

• [00:04:49] NUCLEUS said the quarter went by its expectation, both in terms of financials and the key area of attrition. The attrition significantly came down and the company expects that to stays that way.

Q&A Highlights:

• [00:15:10] Gun Singh from Counter Finance enquired if great revenues and margins from 3Q is a sustainable number going-forward or is it a one-off. Anurag Mantri CFO answered that the company expects its initiatives to continue in the future.

• [00:20:21] Harish Toshniwal at BottomUp Research asked if revenue in 3Q is reflective of all the price hikes that have been made so far. Brajesh Khandelwal said that regarding continued AMC price hike, that effort is going to continue. But other precise details cannot be shared.

• [00:24:00] Harish Toshniwal at BottomUp Research also enquired about the increased potential on NBFC market in India. Brajesh Khandelwal replied that NUCLEUS is working with various prospects to engage them with new product offering and that’s a continuous effort.

• [00:29:35] Jatin K from Alpha Capital asked about the indication of growth in 3Q23. Anurag Mantri CFO clarified that as far as growth, close to 50% has come from retrofit. It’s a one-off but NUCLEUS has concluded some business exchanges and discussions with customers, while other discussions are still ongoing.

• [00:30:43] Chirag Kacharia from Ashika Institutional Equities asked why the company has not been participating in the growth of the IT sector and outsourcing opportunities. Anurag Mantri CFO said NUCLEUS is a in-product organization that has been taking advantage of outsourcing opportunities for some time and will continue to do so.

• [00:32:22] Chirag Kacharia from Ashika Institutional Equities asked about the size of opportunity in which NUCLEUS is right now in the services it is right now. Anurag Mantri replied that with the product capabilities in retail lending and transaction banking space, NUCLEUS is approaching very exciting opportunities.

• [00:32:56] Arun Malhotra from CapGrow Capital enquired about the use of excess cash on the balance sheet. Vishnu Dusad MD clarified that the Board will continue to examine the best uses of its business’ cash and make decisions such as buybacks to ensure a balance between what is kept by the company and what is distributed to shareholders.

• [00:38:30] Vaibhav Badjatya from H&I queried if the company will be back to similar kind of profitability in AMC contract as in before FY22. Anurag Mantri CFO answered that the company is back there and will be continuing like that.

• [00:46:18] Samarth Singh from TPF enquired if the company’s order book reflecting the new pricing, the revised AMC rate. Anurag Mantri CFO clarified that the order book includes the new AMC increase.

• [00:52:26] Rahul Jain from Dolat Capital asked about the USD revenue for 3Q23 and the employee count. Anurag Mantri CFO answered that the revenue number was USD21 million for the quarter and the headcount was 1,731.

• [00:54:00] Rahul Jain from Dolat Capital also enquired about the headcount number being significantly lower than the number a couple of years ago. Vishnu Dusad MD said the company has invested significantly in on-boarding young talent and are working on productivity improvements. These two measures go hand-in-hand to ensure NUCLEUS is successful.