Nucleus Software Exports Limited (NUCLEUS) Q4 2026 Earnings Call Transcript

Good evening, everyone. This is Madhuri. A very warm welcome to all of you for this nuclear software earnings conference call for the quarter and year ended on March 31, 2026. For discussions, we have here from the management team, Mr. Vishnu R. Dhusa, our managing director, Mr. Paragbise, CEO and executive director, Mr. Ashok Kumar Bura, chief financier. Mr. Mukesh Bangia, Vice President. Mr. Abhishek Pallav, Vice President. Ms. Vati Patvardhan, Chief Human Resource Officer. Mr. Pradeep Malik, Vice President. And Mr. Tapan Jayeshwal, Financial Controller. As you all are aware, nuclear software does not provide any specific revenue earnings guidance. Anything which is said during this call, which may reflect company's outlook for the future, or which may be constructed as a forward-looking statement, must be reviewed in conjunction with the risk that company faces. An audio on the transcript of this call would be shortly available on the investors' section of company's website, www.nucleussoftware.com. With this, we are now ready to begin with the opening comments on the performance of the company and post that you would be available for the question and answer session. With this, I now pass it over to Mr. Vishnu. Over to you, sir.

Good afternoon and a warm welcome to this. Investor conference call for the year ending, 31st March, 2026. This being our 30 years of our going public, we celebrated the occasion with the bell ringing ceremony last month, and we want to take this opportunity to thank all of you for your sustained support to This company with your voting in the form of your shares, and we want to reiterate our commitment to long-term growth of the company. With those words, I would like to hand over to Pada.

Thank you very much, Vishnu, sir, for this.

And good afternoon and welcome everyone to the Q4 and year-ending investor call.

As much before mentioned indicated, you all know we are going through very uncertain times. However, I would like to assure all of you that we are taking We have enough steps to make sure that we understand the situation really well and is going to end, so we are taking various initiatives that we will work as part of the Q&A that happens later. Thank you very much.

Now I request Mr. Tapan to present the financial numbers. Over to you, Mr. Kapan. Yes.

Am I audible, Swati?

Yes, yes, yes. Please go in.

What comes in? When you?

Our Consulate Revenue for the quarter is at Rs. 224.77 crore against Rs. 220.03 crore quarter-on-quarter and Rs. 228.96 crore year-on-year. For the year, it is Rs. 876.03 crore against Rs. 832.25 crore for the previous year. Overall revenue in foreign currency including India Rupees revenue is US$24.75 million for the quarter against US$24.92 million quarter-on-quarter and US$26.53 million year-on-year. For the year, it is US$99.6 million against US$98.5 million for the previous year. Product revenue for the quarter is at Rs. 189.05 crore against Rs. 185.58 crore quarter-on-quarter and Rs. 199.56 crore year-on-year. For the year, it is Rs. 740.56 crore against Rs. 713.79 crore for the previous year. Revenue from projects and services for the quarter is at Rs. 35.72 crore against Rs. 34.45 crore quarter on quarters and Rs. 29.4 crore year on year. For the year, it is Rs. 135.47 crore against Rs. 118.46 crore for the previous year. Moving on to expenses, cost of delivery including cost of product development for the quarter is 70.1% of revenue against 70.4% of revenue quarter and 57.3% of revenue year on year. In absolute terms, this is Rs. 157.45 crore against Rs. 155 crore quarter on quarter and Rs. 131.29 crore year on year. For the year, it is Rs. 622.85 crore against Rs. 568.69 crore for the previous year. As for marketing and sales expenses for the quarter is 7.1% of revenue against 7.8% of revenue quarter-on-quarter and 4.9% year-on-year. In absolute terms, this is Rs. 15.93 crore against Rs. 17.2 crore quarter-on-quarter and Rs. 11.24 crore year-on-year. For the year, it is at 61.93 crore against Rs. 36.13 crore for the previous year. As for GN expenses, for the quarter is 7.5% of revenue against 6.9% of revenue quarter on quarter and 5.3% year on year. In absolute terms, this is Rs. 16.77 crore against Rs. 15.10 crore quarter-on-quarter and Rs. 12.09 crore year-on-year. For the year, it is at Rs. 67.09 crore against Rs. 59.82 crore for the previous year. Abita for the quarter is at Rs. 34.62 crore against Rs. 32.72 crore quarter and Rs. 74.33 crore year-on-year. For the year, Abita is at Rs. 124.15 crore against Rs. 167.6 crore in the previous year. Other income from investments and deposit is at Rs. 11.27 crore against Rs. 14.87 crore, quarter and quarter, and Rs. 16.75 crore, year-on-year. Total other income for the quarter is at Rs. 14.92 crore against Rs. 15.12 crore, quarter and quarter, and Rs. 16.62 crore, year-on-year. For the year, the other income from Investments and Deposit at Rs. 56.49 crore against Rs. 64.79 crore for the previous year. Total other income for the year is Rs. 64.16 crore against Rs. 66.26 crore for the previous year. Total taxes are at Rs. 6.96 crores against Rs. 3.96 crores quarter and quarter and Rs. 22.77 crores year on year. For the year, taxes are Rs. 33.14 crores against Rs. 56.05 crores in the previous year. Net profit is at Rs. 34.55 crores for the quarter against Rs. 20.7 crores for the quarter. And Rs. 64.77 crore year on year. For the year, it is at Rs. 116.74 crore against Rs. 163 crores in the previous year. Other comprehensive income is at negative 1.58 crore for the quarter against Rs. 3.58 crore quarter and quarter and negative 0.20 crore year on year. For the year, it is Rs. 9.4 crore against negative 3.56 crore in the previous year. Total comprehensive income which includes net profit and other comprehensive income is at Rs. 32.97 crore for the quarter against Rs. 24.28 crore quarter and Rs. 64.57 crore year-on-year. For the year, it is at Rs 126.14 crore against Rs 159.44 crore in the previous year. EPS for the quarter is at Rs 13.12 as against Rs 7.86 in the previous quarter and Rs 24.6 in year-on-year. For the year, it is at Rs 44.35 against Rs 61.40 in the previous year. In terms of foreign currency hedges, on 31st March, we had USD 2.5 million of forward contracts. At an average rate of Rs. 91.33, there is a mark-to-market loss of Rs. 1.09 crore, which is taken to hedging reserve in the balance sheet. Revenue contribution from the top 5 clients of the quarter is 29.3% against 27% in the previous quarter. The order book position is Rs. 1044.31 crore, including Rs. 899.44 crores of product business and Rs. 144.87 crores of project and services business. On 31st December, the order book position was Rs. 656.68 crore, including Rs. 588.74 crore of product business and Rs. 67.94 crores of projects and services business. Total cash and cash equivalent as of 31st March are Rs. 972.37 crore against Rs. 971.6 crore as on December 31st. This includes balances in current accounts of Rs. 80.01 crore, various schemes of mutual fund Rs. 597.02 crore, fixed deposit of Rs. 263.22 crore, investments in tax-free bonds of Rs. 32.12 crore. With regards to receivable, we are at Rs. 121.12 crores against Rs. 137.41 crores the previous quarter. During the quarter, there is a gross addition of fixed sets of Rs. 18.35 crores consisting primarily of Rs. 6.35 crores of computer and servers and Rs. 11.78 crores on building and plant and machinery. I'll hand it over to Swati.

Thank you, sir. With this, we are now open for the question and answer session. Over to you, Madhuri.

Thank you, ma'am. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on the telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. The first question comes from Roshab Shah from Baglar Rock. Please go ahead.

Am I audible?

Yes, sir.

Yes, sir. Yeah.

So, my question was, we have lost one of the leading NDFCs as a customer to our competitor. Just wanted to know what could be the reason that a leading NDFC India has or is no more a customer? Was it the pricing part or the software issues?

Which NVFC are you talking about? Can you please name that?

Baggage Connect?

Sorry?

Baggage Connect.

So, Bajaj Finance is not because of any other reason, but it is more of a, I would say, they have on their own invested in a company which is a competitor to us. So, that was a strategic reason with which this decision was taken.

Okay, so, Kodakshan itself is invested in a company where the company is a competitor, correct?

Yes.

Okay. Next question was, since the customers, we've had this problem that customers are not migrating from Fin1 to Fin1 Neo. So they like they are content in the software they are using because it focuses their requirement. So what incentives do we provide them so that they shift to the newer platforms and they hire? And if you could also give me some numbers and how many customers have shifted to the new platform?

So, Very recently, one of the leading public banks in India, we witnessed a last transformation that has happened, and that was as smooth as a kick walk. So, I am sure you must have got to know through the news. On the transformation project, now the good part is that we are using various tools and techs like AI to detect, map, and initiate the transformation journey. One of the challenges is that since some of these implementations are two decades and more than that older, so a lot of customization has gone by. And then one exercise that is being done. At the same time, we are also in talks with the customer to be ready to come up to the new platform. So all these discussions are happening, and our roadmap is being prepared. So it is very much in our focus and on our cars also.

Just to follow up on this one, like you said, the roadmap is ready and the implement takes a lot of time.

No, no, no. I did not mention that implementation takes lots of time. I am saying that the erstwhile version, which is called FIN1, is there in production for more than two decades or beyond, or even older. So, in such cases, these implementations have taken their own path through different customizations at various times. We have created our in-house transformation toolkit, which is AI-enabled, and we are making AI to detect the changes and mapping to the product capability and features that FinVa Neo offers. And so to ensure that the onboarding or transformation from old version to the new version is seamless, and that is the way forward. So that is the strategy we are taking.

Yeah, okay. So my next question is that some years ago you had mentioned that Japan as a market is a tough market to crack because of the language or acceptance of technology. So it's a good challenge for Nucleus to have to be able to have to be able to crack Japan as a market and yeah.

Yeah, so as we know that, you know, Japan market runs on relationship because it takes time for Japanese culture to take up and adopt new product lines. So, we have been there in the market for the past 25 years, and we have built a lot of credibility, and our customers actually have been there for the past 25 years. So, we have been making a conscious effort to tap some of the top Japanese buyers. And there are some active discussions which are currently on, you know, and we might see some results in upcoming quarter, because it takes time actually to get the required level of confidence on the new product. I hope that answers your query.

Yeah, thank you so much, sir. Oh, sorry, that's the last question on, oh. Like in the previous calls, you have mentioned that it was a mistake that we didn't focus much on the marketing of our product, although we knew like Nucleus is, Nucleus has one of the best products in the world, but when I see your sales and marketing expense, it is still around 1% of the revenue. So are we seriously looking at marketing our products? And since you have said that focusing on and you are focusing on sales and marketing, so how many new sales people have you hired in the last, let's say, four to five years?

I think in the last two years, our focus was to strengthen our sales and account management function. This has led to a growth of about a headcount of anywhere between 40 to 50 sales executives in the team, and this is across all sales domains, so hunting, which is for new sales, account management for existing customers, generating business through existing customers. We also have a team onboarded for partnerships and alliances, and, you know, to lead this team, we have recently onboarded Dr. Apoorth Chamaria, who has joined us as Chief Business Officer, and all these sales and partnership and account management functions roll up to him.

Okay. Okay. Thank you.

Thank you, Sam. Participants are kindly requested to ask one question in the initial round, and may join back the queue for more questions. The next question comes from Samar Singh from TPF Capital. Please go ahead.

Good afternoon. Thank you for the opportunity. Could you just tell me what were the total number of logos that we added this year, and if you could repeat the order book?

So, we have added seven new logos this year. In financial year, 25-26 versus three logos in 24-25. So, trajectory is promising and moving in the right direction. If we talk about order book, we are sitting at the close of March 26 in the upwards of 1,000 crores as compared to last financial year of around 600 crores.

Did you say 1,000 crores?

Sorry?

Did you say 1,000 crores?

1,000 crores.

Okay, great. Okay, so we are actually seeing a benefit, finally seeing the benefit of the marketing spend that we've been spending over the last couple of years. Absolutely. Okay, great.

We have a combined effort of multiple things, so marketing expenses, our investment in improving our capacities. Our investment in terms of upskilling our teams, our efforts in terms of spending AI and everything. So collectively, it is finally showing the results.

Got you. So, you know, you had mentioned in the earlier question that sort of Bajaj Hanans invested and went with a competitor. I believe that competitor also has now got a product, at least a product line, I'm not sure, from HTFC Bank as well, which is, I think, one of our oldest clients. So, if you could talk about that, like, are we losing market share with HTFC? What's happening there?

We can't really comment on our competitors and their ways of working, and if they are approaching any client or not, we can't really comment on that.

No, but are we, what, can you comment on our relationship with HDFC, given it's one of our oldest clients, and I would presume a large part of our, you know, a decent amount of revenue?

Yeah, the relationship is nearly 30 years now, and it continues to go strong.

Can you please join back the queue for more questions? The next question comes from Rahul Jain from Kamyakya Wealth Management.

Please go ahead. Rahul, sir, please go ahead with your question, sir.

Is my line audible?

Yes, sir.

Yeah, hi. This is Rahul from Dollot Capital. Maybe there was a correction in the name. Yeah, so my question was that, you know, we have a very strong... This order signing that has happened during the quarter, so I would appreciate if management could share some color in terms of which market this came from, and some of the local offices that we have set up in different regions have some of these efforts have fructified, causing this book to jump. And also, is this coming from SaaS side of revenue because we don't see much momentum happening in the Q4 revenue, or we expect this order book to actually rectify in the next couple of quarters and it came much more closer to the end of the quarter? Thank you.

Well, most of our contracts are spread contracts across few years. And if we talk about, and that is why the revenue impact might not be seen in the first quarter or maybe one or two quarters, coming quarters. But however, this robust order book is going to definitely positively impact in positive terms for quite few quarters. And if we talk about areas from where or geographies from where we have got this order, happy to share that. One of the orders which we have booked is from U.S. and other orders, most of the orders are from India. There are few orders from other geographies as well, but majorly it is from India and U.S. India and U.S.

And you're saying, sorry, I could not, Ashok, I could not follow the part which you said it should flow out in the next few quarters or because we got it toward the later part of the thing, or you're saying generally it takes time for us to recognize the revenues?

Yeah, so in general, it takes time. So while we have received the order, there is an implementation cycle as well, which goes before we recognize the revenue. And that cycle depends on the complexity of the order which we have received and the size of the order which we have got and integration with the customers. So that is why I was saying it might not be immediately reflective in revenue, maybe in immediate one or two quarters, but definitely once the implementation is done, we should see that revenue flowing in our books.

Sure, and if I could ask one more. In general, if you could talk about how the deal wins are trending, are this more happening towards the subscription model or the traditional on-prem model is one thing, and one data point question is if you could share what was the headcount at the end of the quarter. That's it from my side.

Thank you. Sorry.

So, hit count at the end of the quarter was 2025.

2024.

So, in the range of 2000, and which is pretty much same as maintained across last few quarters, if you see. A plus minus of 100 counts, which you can think of. And if we talk about this, another question was with revenue, right?

Yeah, I was trying to understand, are deals coming on the SaaS model or mostly coming on the on-term model?

So, we are a product company and our deals are, with respect to product, yes, a part of the revenue definitely is subscription-based fees as well, but however, it is a hybrid model on which we work, and most of the deals are long-term deals. There is fair, I would say, reasonably assured revenue which is going to come for future.

Thank you, sir.

The next question comes from Vishap Shah from Bagler Rock. Please go ahead.

Yeah, I have just one question, sir. A couple of portals, we have talked about bringing new features in the call ending and the gold loan. So, any update on that front?

Yeah, I think both call ending and gold loan is going to be the focus area, and We have been trying to understand more on both these capabilities that we have built across, and even in this current GA, which is getting released, both these line of businesses are being strengthened, be it co-lending, be it gold loan, and we have also strengthened the finance against security as going to be the potential line of business as we have understood the market.

So these are going to be the key LOBs we are going to invest.

Sir, just a small question. In general terms, when a customer is in a siteline, how long does it take to convert the customer into sales? And what could be the possible reasons from the customer's end to the process get delayed?

So, while there is no right or wrong answer to it, but it can typically take anywhere between six weeks to maybe, I would say, three months or three years also. There are customers who we have been engaging for almost two years and we have closed contract after two years of discussion. So, if we see it, if it is a greenfield kind of project, it might be done in six months. If it is already established, I would say company or something of that sort, which is doing a migration, it may take a lot of time.

Okay. Okay. Thank you so much.

So, technically, it depends upon from where the transformation is happening. If it is a different system altogether, and the customers struggle, sometimes we also see that the team itself struggles to give us enough information about the implementation. So, that discovering the unknown, unknown takes at times, but usually, if it is a vanilla implementation, It is a matter of, for SaaS businesses, it is a matter of dates, otherwise, as Ashok Talked about, sometimes it takes three months also.

Thank you, sir. The next question comes from Samar Singh from TPS Capital. Please go ahead.

Yeah, yeah. Thanks for the opportunity again. So, just wanted to follow up on the previous question that I had. So, is it fair to say that, you know, none of our existing customers have just shifted either away from us, either completely or any of their product lines over the last three years?

Sorry, I couldn't follow the question. Can you please repeat again? I'm so sorry.

Yeah, I just wanted to confirm, you know, over the last three years, have any of our customers either shifted away from us completely or even any of their product lines away from us?

I think no. No other customer has walked away from us.

That is what he is trying to understand. He is talking about this.

Last three years he talked about it.

I mean nothing significant. If we talk about other than this Bajaj thing which we have talked about, there is nothing significant.

Bajaj was there with us, right?

I'm sorry, I didn't get that.

Ready?

I didn't get your previous answer.

I'm saying there is no significant loss or movement from any of our customers in terms of either module or moving out completely.

Okay, gotcha. And would you be able to share what our win rate is in RFPs over the last three years?

There is a detail we may not be able to provide.

And last question was, so in Japan, we mentioned we were making some inroads. Can you share which software the Japanese banks currently use?

Most of their software is homegrown.

So it's in-house software?

Yeah, yeah.

Got it. Okay. Thank you, sir.

Thank you. Thank you, sir.

The next question comes from Sanjot Kare from Vishen Finance. Please go ahead.

Hi. Good afternoon. Good afternoon. My question is about last Q4, late Q4 of 2000, FY25. The company has grown up almost 10% in revenue. And compared to this quarter, Q426, it's almost flat. So what are the reasons? Is it something like we, is it because of the problems happening, geographical problems, or we couldn't close, or couldn't start any project, or any of the projects have moved from Q4 to Q1? So any reason that the approach is flat?

You are comparing last year, year-on-year quarter, or you are talking about sequential?

No, year-on-year. Two-four of last, yeah, two-four, we grew almost 10% last year.

So that was on the back of one account where we cracked the deal and we were able to book the revenue in the last year in the quarter itself. So, that has jumped the revenue last year, and that is why you are able to see that flat growth, but otherwise, if you normalize it, it has grown

revenue perfect. And additionally, there were a few orders, at least a couple of them, which got postponed from the Middle East because of the war situation.

All right. I don't understand the impact of this geopolitical issue. And even the employee cost has gone up almost 25% compared to last year. So the revenue is flat. I mean, is it something expected we have in?

Yeah, so we continue to invest in our teams because they are the ones who deliver value. Thank you. We realize it that, you know, the revenue may or may not match the, you know, investment in our people, and that's how we look at it.

There is also significant impact because of the new labor code changes that would have added to the employee costs going up.

Okay, okay. And my last question is about where are we seeing a demand now? Is it more from India, Middle East, or in Southeast Asia? I mean, where are we seeing a demand now where we are getting more work?

Well, India remains our foothold. And our strong, I would say, growth center, but we are focusing also on other countries as well and to cultivate that markets. We have recently opened our subsidiary in Vietnam. So, we are looking forward to explore those areas from the growth prospect.

I see. I see. All right. Thank you very much and all the best.

Thank you. Thank you, Sam. The next question comes from Silesh Rathi, an individual investor. Please go ahead.

So please go ahead to your questions.

So there is no response, sir. That would be the last question for the day. Now I hand out the floor to Ms. Vati for closing comments.

Thank you, Madhuli. Now we would like to thank all the investors for joining us today. Now I pass it over to Vishnu, sir, for his closing comment. Over to you, sir.

I would like to take this opportunity to thank you for your continued interest in Nucleus software, and would like to reiterate our commitment to deliver long-term value to all our stakeholders. Thank you.

Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Doorsabha's conference call service. You may disconnect your lines now. Thank you and have a pleasant evening.