Nucleus Software Exports Limited (BOM:531209)
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At close: Apr 24, 2026
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Q2 23/24

Nov 10, 2023

Moderator

Good day, ladies and gentlemen. I am Tencia, the moderator of this call. Thank you for standing by, and welcome to Nucleus Software quarterly earnings conference call. For the duration of presentation, all participant li nes will be in the listen-only mode. We will have a question and answer session after the presentation. I would like to now hand over the conference to Swati Ahuja. Over to you, Swati.

Swati Ahuja
Head of Investor Relations, Nucleus Software Exports

Thanks, Tencia. Good afternoon, everyone. This is Swati from Investor Relations team at Nucleus Software. A very warm welcome to all of you for this Nucleus Software earnings conference call for the quarter and half year ended September 30, 2023. For discussion, we have here from the management team, Mr. Vishnu R. Dusad, our Managing Director, Mr. Parag Bhise, CEO and Executive Director, Mr. Anurag Mantri, COO, CFO, and Executive Director, Dr. Ritika Dusad, Executive Director and Chief Innovation Officer, and Mr. Parag Joshi, Financial Controller. As you all are aware, that Nucleus Software does not provide any specific revenue earning guidance. Anything which is said during this call, which may reflect our outlook for the future or which may be construed as a forward-looking statement, must be reviewed in conjunction with the risk that the company faces.

An audio transcript of this call will be shortly available on the investment section of our website, www.nucleusoftware.com. With this, we are now ready to begin with the opening comments on the performance of the company, and post that we would be available for question and answer session. Now, I hand over to Vishnu Sir. Over to you, sir.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Thanks, Swati, and very warm welcome to all of you for joining me this conference call. As always, we've had a very meaningful quarter that we finished on thirtieth of September, and we look forward to your continued support. With these words, I will hand over to Parag.

Parag Bhise
CEO and Executive Director, Nucleus Software Exports

Thank you very much, Vishnu Sir. Good afternoon, everyone. I'm Parag, and I welcome you all to this investor call for the quarter two of this financial year. As mentioned by Vishnu Sir, this quarter has gone as per our expectations in terms of financials. On the other hand, we continue to work continuously on the improvement that we have been talking about and working on, on various fronts, including on processes, engineering, and project management sites, so that we can focus more and more on delivering value to our customers at a much faster pace, banking on the exhaustive and robust IP that we have created over the past decades. Thank you so much, and welcome you all once more.

Swati Ahuja
Head of Investor Relations, Nucleus Software Exports

Parag Sir, please, put some light on financial number. Over to you, Parag Sir.

Tapan Jayaswal
Financial Controller, Nucleus Software Exports

Hello, good afternoon, everyone. Our key highlights from financials are... Hello, am I audible?

Swati Ahuja
Head of Investor Relations, Nucleus Software Exports

Yes, you are audible. Please go on.

Tapan Jayaswal
Financial Controller, Nucleus Software Exports

Consolidated revenue for the quarter is at INR 205.3 crore, against INR 206.8 crore quarter-on-quarter, and INR 130.1 crore year-on-year. Total revenue in foreign currency, including Indian rupees revenue, is $24.9 million for the quarter, $25.3 million quarter-on-quarter, $16.6 million year-on-year. Product revenue for the quarter is at INR 174.1 crore, INR 82.6 crore quarter-on-quarter, and INR 106.2 crore year-on-year. Revenue from project and services for the quarter is at INR 2 crore, INR 24.2 crore quarter-on-quarter, INR 23.9 crore year-on-year.

As for expenses, cost of delivery, including cost of product development for the quarter, is at 61.6% of revenue against 8% of revenue quarter-on-quarter, 76.5% of revenue year-on-year. In terms, this is INR 126.3 crore and 25.1 crore quarter-on-quarter, and INR 99.5 crore year-on-year. Marketing and sales expenses for the quarter, 5% of revenue, percent of revenue quarter-on-quarter, and 4.3% year-on-year. In terms, this is INR 10.4 crore against INR 7 crore quarter-on-quarter and 7 crore year-on-year. For the quarter is at 9.2% of revenue, percent of revenue quarter-on-quarter, and 10.6% year-on-year. In absolute terms, this is INR 16.9 crore against INR 12.3 crore quarter-on-quarter, and 7 crore year-on-year.

EBITDA for the quarter is at INR 51.68 crore, against INR 62.3 crore quarter-on-quarter, INR 7.16 crore year-on-year. Other income from investment and deposit is at INR 11.1 crore, INR 7.2 crore quarter-on-quarter, year-on-year. Total other income for the quarter is at INR 11.9 crore, against INR 0.8 crore quarter-on-quarter, and rupees-... to year-on-year. Total taxes are at INR 15.34 crores against INR 17.97 crore quarter-on-quarter, and INR 9 crore year-on-year. Profit is at INR 44.6 crore for the quarter, against INR 53.6 crores, INR 11 crores year-on-year. Other comprehensive income is at INR 3.4 crore for the quarter, for quarter-on-quarter, and INR 1.6 crore year-on-year.

Total comprehensive income, which includes net profit and other comprehensive income, is at INR 48 crore for the quarter against INR 56.6 crore quarter-on-quarter, and INR 12.6 crore year-on-year. The quarter is at INR 16.65, as against INR 20 quarter-on-quarter and INR 4.12 year-on-year. In terms of foreign currency hedges, on September 30, 2023, we had $3.75 million of forward contract at an average rate of 83.10. There is a mark-to-market loss of INR 0.014 crore, which is taken to hedging reserve in the balance sheet. The new contribution from the top five client for the quarter is 28.8%, 1.7% in the previous quarter.

Order book position is at INR 705.1 crore, INR 148.2 crore of product business, and INR 56.9 crore of project and services business. In 2023, order book position was INR 758.6 crores, INR 689.1 crore of product business and INR 69.5 crore of project and services business. Total cash and cash equivalent as on September 30, 2023 are INR 718.1 crore against INR 701.5 crore as on year 2023. Balances in current accounts of INR 65 crores, current INR 558.7 crore, fixed deposit of INR 27.2 crores, investment in tax-free bonds of INR 62 crores, and INR 5.2 crores in preference shares.

With regards to receivables, we are at INR 161.7 crore, 200 crore in the previous quarter. In the quarter, there is gross addition of fixed assets of INR 0.83 crore, primarily of INR 10 crore on computer and INR 0.13 crore on software. I'll hand it over to Swati.

Swati Ahuja
Head of Investor Relations, Nucleus Software Exports

Thank you, sir. With this now we are open for question and answer session. So I will hand over to Tencia. Over to you, Tencia.

Moderator

Thank you, ma'am. If you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star and one again. I repeat, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. First question comes from Jatin Parmar, from Aurum Capital. Please go ahead.

Jiten Parmar
Co-Founder, Aurum Capital

Yeah, good afternoon. Congratulations on a good set of numbers. My question is, why are the margins lower quarter-on-quarter and the employee costs higher? Can you throw some light on that?

Tapan Jayaswal
Financial Controller, Nucleus Software Exports

Yeah, thanks for the question. We continue to invest on increasing our capacity and in terms of top line, I think we were expecting slightly higher top line, and that's how we were hoping to maintain the margin. But without bothering about the quarter-to-quarter numbers, we continue to focus on building a long-term, you know, value proposition for our customers.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Okay. Okay. So last time you mentioned 30% of the contracts are moved to the newer prices. What is the percentage now at the end of this quarter?

Tapan Jayaswal
Financial Controller, Nucleus Software Exports

Okay, we again will not be able to give you a precise number, but most of our domestic contracts have moved to the, you know, revised AMC, and our overseas contracts are in the process of moving into impact.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Okay. And, we have cash of around INR 700 crore plus. What is the plan for that? Because those... eventually this much cash will bring our ratio down. So what is the plan for that?

Tapan Jayaswal
Financial Controller, Nucleus Software Exports

Yeah, thanks for asking this question. We will not be investing in any acquisition in any near future. And as far as, you know, whether paying back, paying it back to investors via-

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

... dividend or buyback, et cetera, that is something that the board will decide.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Okay, okay. What is the general business environment? Are you seeing any slowdown in the markets you operate in or things are looking up? That's my final question.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Okay. As of now, we are not experiencing any slowdown. We continue to get queries for our offerings, and we are quite optimistic about the future, at this point of time.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Great. Thanks. Thanks. That's all for now. If I have any further questions, I'll come back to you. Thank you.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Certainly.

Moderator

Thank you. Next question comes from Ankush Agarwal from DPR. Please go ahead.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Yeah. Hi, sir. Thank you for taking my question. So Vishnu, sir, last year, when we started with the repricing, we made this statement that, you know, at the start of the year, we were targeting certain number of clients, and for them, we didn't renew AMC because we wanted to give them higher pricing. So for this year, have we done similar kind of exercise wherein for certain clients we have not booked AMC initially, and once they close, then that the retrospective impact might come in the later half of the year?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, we have not done that this year.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Okay. Secondly, you stated that, you know, most of the domestic contracts are moved to repricing, and now you are focusing on the overseas market. So my question over here is, in the domestic market, TCS has a very good market share and has a very strong market standing, and so I think we were able to get this repricing. But how easy or how difficult would it be for us to do the same, for the overseas customers? If you can share your thought on that.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

You know, the product offerings that we have are so strong, and our prices, even in the overseas markets, have been equally on the lower side. So we are quite optimistic about the overseas market as well.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Okay. Okay. So, do you still believe by FY 2025, I think, you had stated that it will take you about two years max to do the entire repricing. So do you still stick by that timeline?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah. By and large, yes. Few customers may spill over to by a couple of more quarters, that's all. But otherwise, yes, by and large, we should be able to... We will be able to be done with the repricing with all our customers.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Right. And lastly, sir, on the cost base, so I think last two quarters, the cost base has continued to increase. You have said that you have created a bench strength. So wanted to understand, you know, the thought process over here, like, is this increase in bench size an outcome of, you know, the new kind of revenue base that we have seen? And then, so you feel that, you know, now you have that extra margin that you can use to invest more? Or is it a response to the underlying traction that you might be seeing? And how should we look at the cost base for the remaining part of the year to be highlighted?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah. As for this specific question, and using the industry terminology of bench strength, which incidentally we do not need that. Our business model does not need any bench strength as such, because anyone who joins you know after the initial few weeks or few months of training is essentially working on a live project or is contributing to development of a product. Now, that being the case, there is no bench as such. Now, talking about increasing the compensation, we are absolutely you know confident about and optimistic about our you know future quarters and months. So we will continue to build strength from this number.

We are talking about increasing the strength by 300 people at least over the year. And then that should give you a perspective.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Got it. That's all clear. Thank you.

Moderator

Thank you. Next question comes from Gaurav Khanna from CapGrow Capital. Please go ahead.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Yeah, good afternoon. My question is, whether this margin will be sustainable in the going forward and-

Moderator

Gaurav, please be loud. We are, you're not audible.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Not audible?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yes, you can try again.

Anuj Sharma
Investment Analyst, M3 Investment

Now I'm audible?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, yeah, yeah.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

There is, yeah.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Hello?

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Yeah.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

As I said-

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

I think what would be the margin, this margin would be sustainable going forward, or there would be a decrease in margins? What is your take on that?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Okay. As a, as a policy, we do not give any guidance. Now, as far as whether, whether it will be going down or upward, our hope is that we will be able to take it upwards.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Okay, sir. And, is there any seasonality in this business?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, not really. Not really. It certainly is a lousy result, but, there is no seasonality as such.

Gaurav Khanna
Equity Research Analyst, CapGrow Capital

Okay. Okay. Okay. Thank you, sir.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Thank you.

Moderator

Thank you. Next question comes from Vaibhav Barjatya from Honesty and Integrity Investments. Please go ahead.

Vaibhav Barjatya
Investment Analyst, Honesty and Integrity Investment

Yeah. Hi, sir. Thanks for providing the opportunity. So, there was some disturbance initially, maybe from my line. So I think in terms of expenses, that is sequentially. If you see sequentially, you know, operating and other expenses have increased by nearly INR 8 crore. So, can you help us understand the specific line item which has grown, which has resulted in this increase? Yeah, essentially, it is marketing. You know, we are, we have done outstanding work for decades, and we have not talked about it as much as we ought to have. So that is where we are, we are also spending some of our attention and money to make sure that people are aware about what we do. Okay.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

So, so out of INR 8 crore increase, you say most of it is due to, increase in marketing expenses. That's what you, you mean to say, or there are other things also that has led to... Because I think initially, selling and marketing expenses was given as a percentage, but I missed that because there was some disturbance in the line. Vaibhav, you want to, take this? Yeah, that would be-

Anurag Mantri
COO, CFO, and Executive Director, Nucleus Software Exports

Vaibhav, this is Anurag. It's actually a combination of marketing and marketing-related travel costs. We are basically investing a lot in enhancing our connects with our executive customers. And in that particular direction, also, significant travel is happening.

It's a combination of both.

Vaibhav Barjatya
Investment Analyst, Honesty and Integrity Investment

Got it. Understand. Understand. And, sir, in terms of revenue, if you see the revenue breakup, India revenue has sequentially—again, I'm talking about sequentially, as compared to the last quarter, June two thousand and twenty-three. India business revenue has gone up nearly by INR 20 crore. So, I don't want to know a specific number, but is most of the revenue increase due to AMC revenue increase or is it non-AMC revenue increase? I don't want to know, again, a specific number, but I just want to understand the majority of the growth drivers. Yeah, it is AMC pricing. It is it. Okay. Okay.

And lastly, sir, in terms of the number of employees, for the current quarter, September quarter, what was the total number of employees? Anurag?

Anurag Mantri
COO, CFO, and Executive Director, Nucleus Software Exports

So, as of thirtieth September, our strength was 1,908. And in then quarter, we stood at 1,832.

Vaibhav Barjatya
Investment Analyst, Honesty and Integrity Investment

Yeah. Okay. Got it. Understand. That's it from my questions. Thank you.

Moderator

Thank you. Once again, if you wish to ask a question, press star and one on your telephone and wait for your name to be announced. I repeat, if you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. Next question comes from Ashwini Desai from Oaklane Capital. Please go ahead.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Good afternoon, sir.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Good afternoon.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Yeah, thank you for giving an opportunity. I had a couple of questions. First one was because of this price hike, have you seen any loss in customers? Have you seen any churn?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Okay, let me give you a slightly longer answer to this simple question. We have been adding value to our customers' businesses, so in such an immense manner and at such highly discounted prices that because of both the reasons, despite the increase in prices, none of our customers have moved out of our intellectual property. And not just that, some of them are very, very keen to move to our new releases, and we are very hopeful about being able to move them to the new releases soon and then add even greater value to their business.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Okay. Okay.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Does that answer your question?

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Sir, that partly answered my question. So when you're saying you're very discounted to whom? Who is your closest competitor in this space?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, no, no. Again, a very good question. I'm talking about the global prices as compared to global prices for the... For this kind of intellectual property, we were deeply discounted.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Okay, okay, okay. Fair enough. So, I mean, you don't expect any kind of churn in the future?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

We do not visualize that because, you know, not just that we have delivered value in the past, not just that we are delivering value, currently, our new, you know, releases, they will, our customers are confident that they will deliver even more value. So we do not visualize any churn.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Okay. Neither in India nor globally?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, correct.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Okay. Okay, great. So again, stressing on that, sir, who would your closest competitor, somebody with a similar offering, if you can give some names in India or globally?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, we do not talk about our competitors, usually.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Okay, okay, okay. Fair enough. And I think one other question I had, so it has been partly answered, though, but I'm repeating it. So when you mentioned in initial comments that you're looking to increase capacity as such, right? So this capacity increase that you're talking of is to do with the headcount increase that you mentioned, marketing or anything else that we are spending on?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Okay, good question. It is across the board, with this capacity increase is in on the project management side, on account management side, on marketing side, as well as the engineering side.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Okay, okay. Is it possible to quantify how much you might have spent in the first half?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Sorry, how much then would we have spent in first half on what?

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

On this capacity increase that you're talking across the board that you mentioned.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Okay. Particularly-

Anurag Mantri
COO, CFO, and Executive Director, Nucleus Software Exports

We actually do not share.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, yeah, yeah. That's right. We, we do, we are not able to share that level of detail. Yeah.

Ashwini Desai
Principal Officer and Fund Manager, Oaklane Capital

Okay, okay. Thank you. For more questions.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Thank you. Thank you for your interest.

Moderator

Thank you. Next question comes from Narayan Singh, from Narayan Securities Limited. Please go ahead.

Narayan Singh
Investment Analyst, Narayan Securities Limited

Hi, thank you for the opportunity. Congratulations, Mr. Dusad, for adding value to the company, taking up this price increase, and so on. So I just have one question related to this employee increase. So you are saying, like, you plan to increase the employee count by 300? So this is on top of the existing 1,908, or it's already-

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah. Yeah, no, no, you got it exactly right. This is on top of the 1,908, now.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Ah, okay. Okay, okay. In this quarter, I mean, maybe, again, I'm going back to this price increase, topic, which you, for whatever reasons, do not want to disclose more details. So did we have any price increases in this quarter also, any, any customer-

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yes.

Narayan Singh
Investment Analyst, Narayan Securities Limited

Any contract onboarded?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Certainly. Certainly.

Narayan Singh
Investment Analyst, Narayan Securities Limited

Okay. Okay. I have next question, which is related to the growth in other areas. So I just was looking into the financials in the past few years. So we are able to grow, looks like, very well in India domestically, but for some reason, I don't see much growth outside India. So any special reasons, sir, why we are not able to penetrate overseas?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, no, absolutely. You're absolutely right in making that observation. We were providing a sharp focus to our customers in India, and in some manner, that sharp focus has helped both the customers as well as the company. Now, we are ready to provide focus to all our customers all over the world, and we are looking forward to growth coming back, or our growth coming back in our numbers for various geographies, soon.

Narayan Singh
Investment Analyst, Narayan Securities Limited

Okay. Okay, sir, thank you very much for the opportunity and, good luck, for future. Thank you.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Thank you. Thank you.

Moderator

Thank you. Next question comes from Rahul Jain, from Dolat Capital. Please go ahead.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Hello? Hello. Yeah. Hi, thanks for the opportunity. I just have a couple of questions. I heard somewhere your remark where you possibly said that all the Indian clients have moved to the new pricing and overseas is still left. Is that understanding right?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No. Well, it is partially right. All the Indian customers have moved to the new pricing, and some of the overseas customers have also moved to the new pricing. Not all the overseas customers have moved to the new pricing.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

You also said somewhere that there is a certain timeline by which you expect this to be completely done. What was the timeline? How you remember that?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, I think this financial year, and maybe a couple of more quarters in the next financial year.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Okay, okay. So basically, let's say, 4-5 quarters from now, it will be done with.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, yeah, that's right.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Okay, any thoughts on the new deal momentum? We have seen the order book for our business coming off during this quarter. So any thoughts on this?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, we are getting good interest and you know, there will be announcement about some orders in the near future.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

I think, last quarter you were mentioning about a very large deal in the—for the FinnAxia offering. Is that still in the pipeline or it's not been won or something?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, it's very much in the pipeline.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Right. And, this large jump to the marketing call that you said related to marketing, is it more related to, like, attending events like Sibos or Fintech events, those kind of thing, or this is a client-specific travel to meet and do business development and, yeah, business as usual, kind of a travel?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

I would say both. We've been participating in events also. We've been traveling to meet our customers also, understand them better, and understand their challenges better and so on.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

I mean, the key reason of asking this question was to understand whether this is a new normal on the spend or this is slightly accentuated because of more events in this quarter and may possibly come off in the coming quarter. That is what I'm trying to understand.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah. So it's going to be new normal. New normal, because as I mentioned earlier, we have not talked about our value addition, that we have done, the immense value addition that we have been doing to our customers. And that's what we want to do now. We want to talk about it and let people understand that you know, this is a robust institution which they can rely upon for long-term value addition.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Right. This would be also expanding your market or mostly of the profile key market that you are currently present?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

To begin with, the existing market and, of course, as appropriate for our time, the new geographies are also.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

So you said, you were initially trying to map it with the revenue momentum, but then nevertheless, you went with the flow respective of the traction, which caused the margins to come off in this quarter. So, since you would persist on the spend and revenue growth can be slightly lumpy by the nature of it, so is there a base margin that you would like to have on a annualized or quarterly basis? Or, it would continue to be volatile function of growth.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

I would like to say the second volatile function of growth.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Sorry, I could not understand that.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah. So, I don't think we are keen. I mean, we would be able to give any guidance either on in terms of revenue growth or in terms of margins and so on. What we are, you know, sharply focused on is ensuring that our customers get value and all our other stakeholders get value quarter to quarter, year to year. I don't think we are in a position to give you any indicators.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Right. And the 15, 300-odd people addition that you have kind of indicated, this roughly implies 15% growth, so on the current base. So most of these would be going into the implementation kind of strengthening, or this would be across function and not limited to service inquiry?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, absolutely. As answered earlier also, it will be across functions, right from marketing through account management, through implementations, project management, and engineering.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Right. Right. Understood. Understood. And any, sorry, I, on the new win side, can you give us how many new client logos or renewals of the business in quarter or anything in the last kind of quarters has been shaping up for us?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

I know. I don't think we'll be able to talk about that, well.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

So earlier, we used to give one data that how many clients went live and how many dividends we have won during the quarter. So you think this would be discontinued or this is a temporary thing that we are not publishing that?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

I think, we will, we will, you know, we have to continue striking balance between, you know, as much transparency as we can bring to our shareholders versus the market scenario. And as, as, you know, that, that balance keeps shifting, we will also, we will, we will also, we have no choice but to keep doing that balancing.

Rahul Jain
Analyst and Director of Research, Dolat Capital Market

Sure. Sure. Thank you. That's it from my side.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Thank you. Thank you for your continued interest.

Moderator

Thank you. Next question comes from Aditya Nagar from Alpana Enterprises. Please go ahead.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Yeah. Hi, sir. Thank you for taking the time for my question. Could you please give me a texture of your addressable, you know, how much market share are we targeting in this?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Sir, could I get your question?

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

So could you give us the total addressable market that Nucleus is targeting, sir?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Oh, that is a very sizable market. Very, very sizable market. You know,

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Sir, do you mean $10 billion and above, $20 billion and above, sir?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, yeah, yeah. Good, good. Yeah, good, good, good guesstimate. It is, it is in, in the vicinity of, let's say, $20 billion-$30 billion.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Right.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

You know, it is the cost of software for lending business is typically anywhere between 0.5%-1% of the trillion.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Okay.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Okay, so you can make a guess from there, how big that market would be.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Absolutely, sir. And then, is it fair to say, sir, we can be 3, 4, 5% of this market, sir, with the capability of our product offering?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Certainly. Certainly.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

For that, sir, would you need the cash on the balance sheet, or do you think that it's more now about a sales and a marketing function?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah. Now, these are the, you know, balancing decisions that the board will take. How much we want to pay to the shareholders at what point of time, and how much should go into the in building the brand and making sure that people come to know about the outstanding product that exists?

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Right. So, one... Just a suggestion, sir, if you don't mind, please don't take it the wrong way. You know, I believe you when you say that you have an outstanding product, et cetera. But if you could just start giving us certain level of customer churn, customer data, et cetera. We don't want any forward-looking guidance, but if you could just tell us what's happened, good or bad, I mean. I'm sure given your level of technical competence and understanding, you would be okay to share churn level data, because since you're a product company, sir, one important metric is tracking churn. Only if you are okay with it and if your internal team approves it, of course, you could share that level of data. We don't need customer names, we don't need...

Maybe you can say international churn, domestic churn, so that we can. It'll just help us better understand your company. Thank you, sir. That's the only-

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, sure, sure. Thanks, thanks for raising that question. I'm very glad to let you know that voluntary churn of our customers would be less than 5%. Not even that. The philosophy has been that if you know, a customer has taken a decision to go on our product, then once a customer has signed up and gone live, it is all our effort to make sure that the value continues to get delivered. That's all I can say. It's a pretty small number. Extremely small number.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Right. Thank you for that answer, sir. And just one last question, and you can choose however you want to answer it. Sir, I'm sure that if I am a vendor or I'm a client of Nucleus, and my prices go up, maybe 5x or 6x, you know, for a contract for which I've been giving nominal inflation increases, there must be some pushback, definitely. How are you handling the situation, sir?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Again, excellent question. Only thing that we talk about is the value that we have been delivering.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Correct.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

I'm very, very delighted to let you know that, when we start talking about it, you know, we have already mentioned it. All of them have agreed that, yes, this is required to be done. And, yeah, that's all.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

So what you're saying is they're viewing Nucleus more as a, as a partnership, more than a vendor relationship. Will that, will that fair understanding, sir?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Absolutely fair understanding.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Great, sir. I just hope you give out little more details regarding the product, the churn, maybe the average, the average per customer. Again, sir, broad, broad level data. We're not asking any specific data, it's okay with you. Just for our better understanding of your company. Thank you so much, sir. Thank you so much.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Thank you. Thank you for your continued interest. Since we service very small customers and biggest customers in the country, so obviously averages, et cetera, do not make sense.

Aditya Nagar
Equity Research Analyst, Alpana Enterprises

Right. Right. No, absolutely, sir. Just, like I said, it's just for our understanding. There's a barbell. Obviously, some customers will be very large, some small. But just for our better understanding, no other reason, sir.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Sure. Thank you. Thank you. Thank you for your interest.

Moderator

Thank you. Next question comes from Anuj Sharma, from M3 Investments. Please go ahead.

Anuj Sharma
Investment Analyst, M3 Investment

Yeah, thank you, and congratulations, Vishnu and team, for a good quarter. Few questions. Sir, one, you spoke about lower than expected revenues in Q2. What was the reason for the spillover?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

We were expecting certain orders, and they didn't come through. They delayed.

Anuj Sharma
Investment Analyst, M3 Investment

Okay. So, there will be a spillover. It's not a lost revenue, it's a spillover.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah, that's it.

Anuj Sharma
Investment Analyst, M3 Investment

Okay. The second thing is, sir, we will be focusing on overseas customers for the value-added price adjustment. But the reason for delay is lack of focus. Initially, we planned to focus on domestic and then international, or it's been difficult to convince international customers or the value proposition?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, the first one, you know, we wanted to focus first on domestic customers and go, then go international, and that's what we are doing.

Anuj Sharma
Investment Analyst, M3 Investment

Okay. Okay. So the third thing on price adjustment, now, once the price adjustment based on value proposition is done, incrementally, how does it work? Or does it work on some outcome basis, or then it will be a flat pricing, or just a one-time adjustment and then it be flat? Or there will be some flexibility in terms of either inflation or outcome-based or transaction-based?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

No, all the facilities are there in the picture, so that it is a win-win, ongoing win-win for our customers and us.

Anuj Sharma
Investment Analyst, M3 Investment

Okay. So even after the adjustment is done, let's suppose, let's suppose the outcome, the transaction volumes increase by 10%. Then is it fair to say that EPS will also be a beneficiary of the increased transaction output going forward?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Yeah. Yeah.

Anuj Sharma
Investment Analyst, M3 Investment

Okay. And sir, one more question is, we have a significant market share in domestic, and, good, it's a, it's a happy development that we are focusing on sales and development. But will it be predominantly global now because, there wouldn't be many, gaps in the Indian market for you? And is it fair to say that our next level of growth after the repricing of international customers will be new international customers?

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Very right. Yes, it is.

Anuj Sharma
Investment Analyst, M3 Investment

Okay. Okay, sir. Thank you so much, and wish you all the best.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

Thank you. Thank you.

Moderator

Thank you. That will be the last question for the day. Now, I hand over the floor to Swati for closing comments.

Swati Ahuja
Head of Investor Relations, Nucleus Software Exports

Thank you, Tencia. Now, we would like to thank all the investors for joining us today, and a very happy and prosperous Diwali to all of you. I would now pass it over to Vishnu sir for his closing comments. Over to you, sir.

Vishnu R. Dusad
Managing Director, Nucleus Software Exports

I would also like to wish all of you a very happy Diwali on my personal behalf and on behalf of Team Nucleus. And we continue to be committed to adding value to the society and for decades to come. And we want to thank you for your continued interest in us. Thank you.

Moderator

Thank you. That concludes our conference for today. Thank you for participating. You may all disconnect now.

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