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Nucleus Software Exports Ltd. FUNDAMENTAL

BUY Target Price Rs 236 STOCK
Value Parameters
BSE Code 531209 and material contracts, fixed price contracts
NSE Symbol NUCLEUS and annual technical service for these licenses.
CMP (As on 02nd Nov, 2016) Software projects and services include other
Face Value Rs 205 time and material contracts and fixed price
52 Week High/Low Rs 10 contracts, whereby no license sale is made by the
Market Cap (Rs cr) Rs 353/145 company. It has developed solutions spanning
EPS (Rs) (FY16) from retail banking to corporate banking, cash
TTM PE ratio (x) 675 management, Internet banking and credit cards.
10 Its product FinnOne offers a suite for retail
14.6 banking applications consisting of modules like
customer acquisition system, loan management,
Shareholding Pattern % (Sep’ 16) delinquency and recovery management, deposits
and finance against securities. Its Cash@WillTM
30.2 60.6 and BankONetTM are the offerings in the area of
1.3 7.9 cash management and internet banking.

Promoter FII DII Others Investment Rationale

Company Overview § Innovative Product: The company has come out
with world’s first offline digital cash solution. It
Nucleus Software Exports Limited provides software is expected to swap the physical cash with digital
solutions to the banking and financial services industry. The currency.
company operates in two segments: products, and projects
and services. Its products includes from sale of licenses § New Versions of Technology: The company has
and all other related customization, implementation, time launched new versions to its existing product
portfolio which are more adaptable to the
consumer demands.

§ Global Presence: The company has well
diversified presence across the globe and plans to
penetrate further in the less served regions.

§ Strong Order Book: The company had won 13
new product orders previous year and presently
has an outstanding order book of Rs 347 crore
executable over coming 2 years.

Concern

§ Currency Fluctuation: The company has
significant exposure to overseas markets and
appreciation of rupee may impact its earnings
adversely.

Valuations

At CMP of Rs 205 per share the stock trades at
trailing P/E multiple of 14.6 (x). The company has
a dividend yield of 2.4% and we have “Buy” rating
on the stock with a fair value of Rs 236 per share.

4 ARIHANT CAPITAL ¡ NOVEMBER 2016