This article first appeared on GuruFocus .
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Consolidated Revenue:INR 210.4 crore for the quarter, up 6.4% quarter-on-quarter and 3.4% year-on-year.
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Product Revenue:INR 176.6 crore, constituting 83.9% of total revenue.
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Cost of Delivery:INR 160.4 crore, up 1.9% quarter-on-quarter and 5.1% year-on-year, representing 76.2% of revenue.
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EBITDA:INR 7.6 crore, down from INR 34.6 crore quarter-on-quarter and INR 33.7 crore year-on-year, with margins at 3.6%.
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Other Income:INR 17.8 crore, up 19.5% quarter-on-quarter but down 0.7% year-on-year.
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Profit After Tax:INR 23.9 crore, down 30.9% quarter-on-quarter and 32.2% year-on-year.
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Order Book:INR 1,244 crore as of June 30, 2026, with 88% (INR 1,096 crore) from products.
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Cash and Cash Equivalents:INR 977.9 crore as of June 30, 2026, compared to INR 972.4 crore on March 31, 2026.
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Receivables:INR 174.7 crore, up from INR 121.1 crore, with DSO increasing to 63 days from 42 days.
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Headcount:2,059 as of June 30, 2026, up from 2,028 on March 31, 2026.
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Attrition:3% during the quarter, compared to 2% in the previous quarter.
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Release Date: July 31, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Nucleus Software Exports Ltd ( BOM:531209 ) reported a strong order book of INR 1,244 crore, up from INR 1,044 crore in the previous quarter, driven by new logo wins and renewals.
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The company added 10 new logos over the last 15 months, indicating successful market expansion efforts.
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Nucleus Software Exports Ltd ( BOM:531209 ) launched FinnOne Neo release 9.0 with embedded AI capabilities, showcasing product innovation and a strong enterprise AI foundation.
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The company maintains a healthy cash position with total cash and cash equivalents of INR 977.9 crore as of June 30, 2026.
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Nucleus Software Exports Ltd ( BOM:531209 ) is focusing on high-margin deals and expanding into promising geographies like the Middle East, Southeast Asia, and the US.
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The company's order book is largely composed of product revenue (88%), reinforcing its product-centric business model.
Negative Points
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Nucleus Software Exports Ltd ( BOM:531209 ) experienced a significant decline in EBITDA margin to 3.6% from 15.4% quarter-on-quarter, due to increased employee and marketing costs.
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Profit after tax (PAT) declined by 30.9% quarter-on-quarter and 32.2% year-on-year, reflecting pressure on profitability.
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The company lost a major NBFC client in India, which shifted its business to a competitor, highlighting client concentration risk.
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Employee benefit expenses have risen to approximately 75% of sales, and management expects them to remain elevated in the near term.
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Revenue growth has been sluggish, with a 3.4% year-on-year increase, despite a doubling of the order book, due to longer implementation cycles and a mix of long-term AMC contracts.
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Days Sales Outstanding (DSO) increased to 63 days from 42 days in the previous quarter, indicating a slowdown in receivables collection.
Q & A Highlights
Q: The order book has nearly doubled from last year, but revenues are down 3% year-on-year. Why is the strong order intake not translating into revenue? A: Apurva Chamaria, Chief Business Officer, explained that the order book is a mix of contracts, some extending up to five years (like AMC contracts), while others are shorter-term implementations. The execution cycle varies by customer and complexity, so the revenue impact is not immediate. Parag Bhise, CEO, added that in the last 15 months, the company has added almost 10 new logos, and revenue will accrue as these projects begin execution.
Q: Is there a risk that other top customers could follow the example of the major NBFC that left to invest in a competitor? A: Parag Bhise, CEO, acknowledged that theoretically this is a risk, but noted it is a one-off case. He emphasized that the company's focus remains on investing in its products, R&D, and AI capabilities to maintain its market positioning, rather than worrying about hypothetical client behavior.
Q: Despite strengthening the sales and marketing team over the last few years, why hasn't this converted into business growth? A: Apurva Chamaria, Chief Business Officer, countered this by highlighting that the company recorded its largest-ever quarterly order book of over INR 600 crore in the previous quarter and locked in another INR 300+ crore this quarter. He stated this is a direct reflection of the sales team's efforts in tendering and building on the foundation laid over the years.
Q: Can you provide a breakdown of the sharp increase in other expenses (up 18% QoQ) and SG&A costs? A: Tapan Jayaswal, Financial Controller, attributed the rise to increased marketing expenses from heavy investment in global markets, salary revisions factored into Q1, and the impact of RSU grants. Parag Bhise, CEO, added that SG&A levels are expected to remain at this fixed level, with continued investment in strategic markets, but there were no large one-off items.
Q: Employee benefit expenses are now around 75% of sales. Will this come down, and are there margin control initiatives in place? A: Parag Bhise, CEO, stated that as a percentage of revenue, this should decline as revenue increases. He confirmed the company is working on margin control initiatives and focusing on high-margin deals, particularly in geographies outside India, with effects expected in subsequent quarters.
Q: How has the company's pricing philosophy evolved over the last 3-5 years, given past challenges with pricing? A: Apurva Chamaria, Chief Business Officer, said the company has chosen to remain a premium player due to the strength of its product. While stiff competition affects pricing power, the company is maintaining its price segment and will look to increase prices as market conditions improve.
Q: Which geographies are most promising for growth in the medium to long term? A: Apurva Chamaria, Chief Business Officer, identified the Middle East and Southeast Asia as the most promising regions. He also noted the company has established a footing in the U.S. market and expects to grow there differently than in other markets.
Q: Are there any productivity benefits being realized from AI investments? A: Apurva Chamaria, Chief Business Officer, said benefits are not being realized right now but are expected to flow in as AI usage strengthens. Parag Bhise, CEO, added that while there is visibility, the company has not yet started measuring tangible benefits in numbers, but is on the right path.
Q: Can you provide color on the composition of the increased order bookis it FinnOne Neo or FinnAxia, and which geographies does it cover? A: Apurva Chamaria, Chief Business Officer, confirmed the order book is largely FinnOne Neo. Vishnu Dusad, MD, added that the geographies are mostly India and the Middle East, with Parag Bhise, CEO, also mentioning Latin America and a U.S. order.
Q: Why hasn't GM Financial, a long-time customer, promoted Nucleus products to its North American business, and is that an opportunity? A: Apurva Chamaria, Chief Business Officer, explained that the customer's business is structured with separate North America and Rest of World divisions, and Nucleus's contract is with the latter. He noted that while future possibility exists, the company is building on a separate U.S. order it won last year in the auto finance niche segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
