Good afternoon, everyone. This is Pelcia. A very warm welcome to all of you for this Nucleus Software Exports Limited earnings conference call for the quarter ended on June 30, 2025. The discussions we have here are from the management team: Mr. Vishnu R. Dusad, our Managing Director; Mr. Parag Bhise, CEO and Executive Director; Mr. Anurag Mantri, COO and Executive Director; Mr. Ashwani Arora, Senior Vice President; Mr. Ashish Khanna, Chief of Staff; Mukesh Bangia, Vice President; Mr. Abhishek Pallav, Vice President; Ms. Swati Patwardhan, Chief Human Resource Officer; and Mr. Tapan Jayaswal, Financial Controller. As you all are aware, Nucleus Software Exports Limited does not provide any specific revenue or earnings guidance.
Anything which is said during this call, which may reflect the company's outlook for the future or if this may be construed as a forward-looking statement, must be reviewed in conjunction with the risks that the company faces. An audio and the transcript of this call would be shortly available on the investor section of the company's website, www.nucleussoftware.com. We are now ready to begin with the opening comments on the performance of the company and after that we would be available for the question and answer session. I now pass it over to Mr. Vishnu. Over to you, sir.
Good afternoon to all of you, and thank you very much for joining this investor call for the quarter ending 30th June 2025. It has been an exciting quarter where we have gone live with some of our biggest implementations, where more than 20,000 users are using our system or product for connections with one of the biggest hospitals in India. We have come to very minimal communicating use with you in the coming quarters, in the meanwhile. To do the works, I now welcome you to the call in the present. Thank you.
Hello from our side. This is Parag Bhise. Just to reemphasize the things mentioned by Mr. Vishnu R. Dusad, we've been talking about what's going on from the medical side. Our Lean Journey is progressing well, and we are integrating into principles in our day-to-day life, whether it is about our projects or whether it is about focusing on our customers or improvement in production. That is starting to give us results. What Mr. Dusad talked about, the implementations are getting more and more traction, and we expect to further improve upon that. That's what I'd like to mention at this stage, and looking forward to the questions. Thank you very much.
A financial update?
Oh, are you going, sir?
Yeah, take your job again. Key highlights for financials, starting from revenue. Our consolidated revenue for the quarter is at INR 217.72 crores, against INR 228.96 crores quarter on quarter, and INR 195.39 crores year-on-year. Overall revenue in foreign currency, including Indian rupees, revenue is $25.46 million for the quarter, against $26.53 million quarter on quarter, and $23.44 million year-on-year.
Product revenue for the quarter is at INR 184.91 crores, against INR 199.56 crores quarter on quarter, and INR 163.01 crores year-on-year. Revenue from projects and services for the quarter is at INR 52.81 crores, against INR 29.40 crores quarter on quarter, and INR 27.38 crores year-on-year. For external cost of GDP, including cost of product development for the quarter, is 70.1% of revenue, against 57.3% of revenue quarter on quarter, and 75.5% of revenue year-on-year.
In absolute terms, this is INR 162.70 crores, against INR 131.29 crores quarter on quarter, and INR 147.45 crores year-on-year. Marketing and sales expenses for the quarter are 6% of revenue, against 4.9% of revenue quarter on quarter, and 2.2% year-on-year. In absolute terms, this is INR 13.12 crores, against INR 11.24 crores quarter on quarter, and INR 4.24 crores year-on-year.
GM expenses for the quarter are 8.3% of revenue, against 5.3% of revenue quarter on quarter, and 7.6% year-on-year. In absolute terms, this is INR 18.15 crores, against INR 12.09 crores quarter on quarter, and INR 14.92 crores year-on-year. The budget for the quarter is at INR 33.74 crores, against INR 74.31 crores quarter on quarter, and INR 28.75 crores year-on-year. Other income from investment and deposits is at INR 16.87 crores, against INR 16.75 crores quarter on quarter, and INR 14.80 crores year-on-year.
Total other income for the quarter is at INR 17.96 crores, against INR 16.60 crores quarter on quarter, and INR 15.05 crores year-on-year. Total taxes are at INR 14.10 crores, against INR 22.77 crores quarter on quarter, and INR 9.71 crores year-on-year. Net profit is at INR 35.20 crores for the quarter, 16.2% of revenue, against INR 64.77 crores for the quarter, 28.3% of revenue quarter on quarter, INR 30.20 crores, which is 15.5% of total revenue year-on-year.
The comprehensive income is at INR 4.60 crores for the quarter, against negative INR 0.20 crores quarter on quarter, INR 2.04 crores year-on-year. Total comprehensive income, which includes net profit and other comprehensive income, is at INR INR 39.83 crores for the quarter, against INR 64.57 crores quarter on quarter, and INR 31.24 crores year-on-year.
The total for the quarter is at INR 13.37 crores, as against INR 24.60 crores in the previous quarter, and INR 11.28 crores year-on-year. In terms of foreign currency headings on June 30th, we had $ 3.25 million forward contracts at an average rate of 87.03. There is a massive market gain of INR 1.19 crores, which is taken to the heading reserve in the balance sheet. Revenue contribution from the top five lines for the quarter is 28.6% against 27.8% in the previous quarter. Order book position is INR 703.16 crores, including INR 608.70 crores for product business, and INR 94.46 crores for projects and services business. On March 31st, the order book position was INR 612.4 crores, including INR 534.32 crores of product business, INR 28.08 crores of projects and services business.
Total cash and cash equivalents as on June 30th, 2025 was INR 965.90 crores, against INR 877.26 crores as on March 31st. This includes balance and current accounts of INR 105.83 crores, various schemes of mutual funds of INR 607.49 crores, fixed deposit of INR 218.53 crores, investments in tax-free bonds of INR 33.78 crores. With regard to receivables, we are at INR 126.12 crores, against INR 137.41 crores previous quarter. During the quarter, there is a gross addition of C4s of INR 3.46 crores, annually of INR 2.7 crores on computer and service servers, INR 1.8 crores on furniture and fixtures, and INR 0.3 crores on office equipment, and INR 4 crores on building and plant and machinery, and INR 0.15 crores on software. Now, I'll hand it over to Ms. Sharma.
Hello, Pratya.
Yes.
Thank you, sir. Yes, we are now open for the question and answer session. If you wish to ask a question, please press * and 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press * and 1 again. If you wish to ask a question, please press * and 1 on your telephone and wait for your name to be announced. First question comes from Arupesh Shah from Berkeley Rock DMS. Please go ahead.
First question is, in one of the calls, you mentioned that you have a very strong basis for selecting the customer account. First, could you let us know what are those bases in the card shop and why these bases are so important for you?
We are extremely sensitive to cross-country customers like products that we sell to home users. Likewise, we also look at the financials of our cross-country customers before we go really deep into the business. Essentially, these are the two factors that we look at, and apart from obviously the potential for the promoter's certainty for startups, etc. These are the interesting factors that we look at while quantifying our investment.
For my second question, under a geography touch, what are our Paris, Bureau, and European markets have come down drastically in the last 10 - 12 years? India, whereas rather India has grown from 27% in 2014 to 58%. Why are we focusing more on the domestic business and less on the international business? I'm sorry to be asked.
No, excellent question. Thank you very much for bringing this to notice. We have been very consciously working on our products for the last decade or so to make sure that they evolve into a product that is globally intransitable. I'm really pleased to say that, you know, we have achieved some degree of clarity on that aspect. We are, you know, working in multiple geographies where this is a new set of products that are getting implemented. We are very confident that over the coming few years, we will start gaining back the same % that we had of overseas customers in our overall revenue as if it was, let's say, a 15-year gap.
My last question is, in the investment parts in the most two accounts, I found out that in Ujjivan Small Finance Bank , we have some INR 10 crore. Are there some payments left from the bank that we've got some shares? What is those INR 10 crore? INR 10 crore?
Okay. You know, when you're in financial services, the securities business in, I think, around 15 or 20 years back, we were one of the earliest investors in that bank. We had a wonderful relationship with Mr. Samit Ghosh , the founder of Ujjivan Small Finance Bank Limited .
He used to be with the bank, which is almost a 40-year-long relationship. That is how Nucleus Software Exports Limited as a company had invested in Ujjivan Small Finance Bank . Subsequently, Ujjivan Small Finance Bank Limited merged into Ujjivan Small Finance Bank . That's how we have this shareholding. This amount that you are looking at is essentially about that investment.
Okay. Thank you. Thank you, Pratya. Thank you.
Thank you. The next question comes from Srinivas Ruki, an individual investor. Please go ahead.
Hi, sir. Am I audible?
Hi. Yes, you are audible.
Thank you for the opportunity, sir. My first question is, which AI modules of your FinnAxia or, you know, FinnOne Neo are actually generating revenue for Q1? How are you pricing them?
These are embedded AI modules and part of product offerings. We do not build, so far, we have not built AI as a business model, but we are empowering our customers to leverage these AI capabilities. Going forward, we will be building them too.
Are these active in pilot phase?
As part of G1 all that, we have released product capabilities, which are AI empowered. It is not that they are in pilot phase. It is being implemented and customers are leveraging it. Many are in the process of go-live.
Okay. With respect to the audit trails for the AI stack, how are you satisfying your regulators, particularly for Tier 1 geography?
Okay. This is, of course, thanks for asking this question. This goes into the kind of depth we put in during the research and development and the ability to explain about the workings of AI and how AI comes to these two conclusions. There is an explainability part of it, and that is good enough to be able to provide you needs.
Okay. The model is satisfying that Europe is a well-known model.
We are not relying upon any market model. We have based all of them in our...
Okay. The next question is, employee costs jumped up sharply in this quarter. How much of that increase is specific to hiring or upskilling for this AI ML talent? How do you expect that in the next couple of quarters?
Hello?
Yes, yes. Yes. T hat's okay.
Yeah. Employee cost jumps for this quarter is largely on account of increments as seen as Ujjivan for the upcoming year.
The last quarter, specifically last quarter, was slightly lower than normal because some of the provisions that we had made right through the year, those were written back. That is how the last quarter Q4 number was lower than Q3, and that is how the jumps would be looking higher.
Okay. Okay. Last call, you mentioned that North America lending, you're testing for North America lending platform, right? How is it going? Anything is a pilot run since Q1?
Yeah, I think we're doing pretty well in that direction. What we are trying to invest in is G1 and FinnAxia. I think we are already in touch with one of the top picks, and we are working on a proof-of-concept with them. Hopefully, we are looking forward to cover that later this year.
Absolutely, we are also trying to open up partnerships with the uncontented stakeholders so that they also help us in that direction. Additionally, I think we're already working with General Motors Financial in Latin America and Europe. That's where I think we are trying to consolidate in North America operations. We are also looking to get our representatives in North America with them as well. These are the multiple types of things we have been working at for North America, especially. Hope I'm able to help you with that.
Thank you.
That's all from my side.
Thank you. The next question comes from Vaibhav Badjatya from Honesty and Integrity Investments. Please go ahead.
Thank you. Hi, sir. I need to make an order book number for this quarter. Can you just repeat that for me?
Sure. The order book position is INR 703.16 crores, including INR 608.70 crores of product business, which is INR 94.46 crores of projects and services business. On 31st March, the position was INR 604 crores, including INR 534.82 crores of product business, which is INR 78.08 crores of projects and services business.
Okay. There's some list of, you know, clients for the current for G1 Automotive from December quarter onwards to the next two years from the opening remark. The fifth quarter is June 30th, then.
I just wondered where the center is all behind the FDFA.
I see in the %, the line for growth rates here. Could you guys walk into the slides for me, please?
Yeah, sure. I think if we are going throughout the quarter, we only see order book numbers mostly rehashed, right? Starting in December 2024 quarter, when we did the business outcomes for this quarter, we stopped giving this number. Last quarter, we did this number. For June 2025 quarter, we are getting started giving this number. That is one of the missing numbers of the first two quarters, and we started again. It's for all the quarters the same that we've been thinking about making these changes.
Actually, there was no conscious reason. I think we also checked it out in the transcripts of the last two calls, but there was no conscious reason. It could have been covered. Tapan, if you can confirm right away. Tapan is here on the call. It was the same question every day. Yeah. Okay. Okay. We are in time. Just to confirm that it was there, you could check in the last call's transcripts. It is still standing there.
Yeah. In last quarter's transcript, it was given as a response to somebody's question, but not in the opening remark. December quarter, I think the usual quantity is completely missing in the fourth quarter.
Okay. You mean 31? Yeah, in line with us.
Yeah, in 31. Yeah.
Is it a critical point? Is it a critical decision?
If you were that kind, I'll run a number from 12 to the number from the March 3rd - 10th in 2025.
Sorry, could you repeat your word?
Tapan, you have the number 30 this year.
1930. 1930 as of June end.
1939.
1939 as of June.
Okay. March ending?
I think.
1945.
1945. Okay, that's important. Yeah, thank you for that .
Thank you. The next question comes from Maharsh Singhi an i ndividual investor, please go ahead.
I wanted to ask the logos at the end of this quarter. The logos in number last quarter.
Which logo?
New logos.
I know on the new logo, there was a logo that was at the end of this quarter.
I think you have that number ready there. The new logo is one. The one logo is there. The question is on total number. I think that number is there.
It is available in the next quarter as well.
Okay. Another thing I wanted to ask is operating expenses at startup. Are there any one-off items over here?
Are there any?
One-off items.
No, no one-off items.
No one-off items. Okay. And r egarding this person, from the initiative of yours, you have not listed any key performance indicators to track progress of your initiative. Neither is this one in the numbers because there is no cost optimization effort.
Okay. As far as cost optimization is concerned, that is not, I repeat, that is not the intent of Ocean Foundry. Ocean Foundry is a philosophical, extremely long-term initiative, which is strictly focused on customer satisfaction and employee development and delivering value on an ongoing basis. This is something that involves substantial cultural change, which is what we are working on. It will start showing impact for a few years. It may not show any impact immediately; if it shows, very good, but otherwise, it is expected to show impact over the years. It brings in sustainability for the organization on a long-term basis.
Okay. Another thing I wanted to ask you is that last year the former CSO resigned on the 19th, and the 19th was the con call and you all did not inform us.
Yeah, he resigned after that, after the call.
He resigned without the notice. Okay. This was allowed at the PFO level. Was he allowed to resign at that point?
Yeah, he did not have a choice.
Okay. Another thing I wanted to ask was, prior to the resign, did you have over with all the clients?
No, we continue to talk to our customers about the value that our products are delivering. Based on that, you know, we look at the pricing of those.
Okay. Okay. This order book of INR 703.16 crore, this will be implemented in the next nine months, right?
Right.
Okay, that will be it from our side. Thank you so much.
Thank you. Thank you.
Thank you. The next question comes from Rahul Jain from Dola Capital. Please go ahead.
Hi. I hope my line is okay. I'm good if my line is okay.
Yeah, no, we are not able to hear you very clearly. Sorry.
Okay. Can you hear me better?
Yeah, it's certainly better.
Yeah, yeah. Thank you. I have a few questions related to the announcement that you have made during this quarter. One important one which I could see is the creation of the role of CMO. I am not sure whether this role existed earlier. Any further in terms of what would be the precise responsibility of Mr. Arjun Kare in this role and what we're trying to aspire from this. +
Secondly, there was this announcement related to going live with this SMD on the FinnAxia module. It is very heartening to see the FinnAxia announcement after a very, very long time. I'm sure they must be dealing quite, very rarely we hear about this. Any further in terms of how both the products are doing and more so on the FinnAxia side. That would be great. Thank you.
The first part I would request Ashish to talk about, and the second part, Arjun, and then we'll talk about the third part.
Right. Thank you very much, this is Ashish. The CMO role, again, I have a primary responsibility of a Chief Marketing Officer. You were talking about the world of product which we are building. We were not able to market the way we wanted it. Some of the legal issues we were trying to mitigate with those, and that's the reason we are really trying to change markets, presence, market perception of our product for the last couple of years.
This is an assigned thing for the spend in that particular initiative of us to do some of these products, these robust products, which is handling more than $1.2 trillion worth of automation when it comes to our lending products to the EO. When it comes to our product financial issues of the top of the bound, which is handling more than $15 trillion worth of investments in one year.
I think it is important for us to have a very right focus on delineate marketing to build our core traders. That's the reason. I mean, we welcome him as a Chief Marketing Officer who will be responsible to and lead it from the front to build this brand, to write out the core traders which we are establishing from close to 40 days now.
This is primarily an initiative to strengthen that position of APS, to help customers understand the new depth of our products, and talk more richness about the features which we are already building and a lot of customers are already taking advantage out of it. That's the reason we are strengthening that particular, we are creating and strengthening a particular role for us. I hope this answers your query, Rahul, on the CMO front.
Yes . Okay, sir. Thanks. I'll hand over to Anurag to, you know, respond to give you a reply on the FinnAxia front.
Thanks, Rahul, for your question. This is Anurag. Thanks for taking a note of the recent announcements about HMD. It's actually very encouraging and exciting that a market leader bank like HMD is observing and experiencing great growth on our platform. You may have missed that a few months back, a leading bank from Southern India called Federal Bank has also gone live on FinnAxia.
This is a bank which is known for its digital adoptions, and they are also experiencing great growth on our platform. Before HMD, Federal Bank was the pillar in the past. With respect to the plans for FinnAxia, we are seeing very good traction, strong traction in the vertical, like financial supply chain and trade finance. Quite a few discussions are progressing with different prospects and customers. I hope that answers your question.
Sure. Lastly, on the order book number, I'm sorry, I know it's been repeated twice, but somehow it was not very clear to me. What I could gather is that that number has moved to INR 700-something crores from INR 612 crores. First of all, if you could clarify that number to me.
Yes, Tapan, it's the same number 16 here for both quarters. The total order book position is INR 703.16 crores, including INR 608.7 crores of product business, which is INR 94.46 crores of projects and services business. On 31st March, the order book position was INR 612.4 crores, including INR 532.32 crores for product business, and INR 78.08 crores for projects and services business.
Got it. The related question to this data is that we saw some, you know, a drop in this number from the one rate we used to do a year back. Now after the Q4, you know, it's again starting to look slightly better. In terms of any color you would like to share, what would have caused this momentum to temporarily take some pause and is getting some, you know, mojo back? Any color on that, what could have caused this number to go down and come back? Anything would help.
I think we had mentioned in the past that, in a couple of quarters earlier, we did experience some slowdown in the sense that there was traction in the market, but converting orders was taking time. A lot of involvement in closure of orders.
Typically, we are seeing that these decisions have now gone up to board levels. Boards are getting involved, because I think they are directed by the regulators to be more involved in due diligence. Because of all this, yes, there was a delay in closure. Thankfully, the danger of our lifetime we've been focusing on it. Conversions have started to happen. Hopefully, they'll happen more. That involvement, which I mentioned, that board level continues to be there. That's how significant change.
I know we generally refrain from giving any forward-looking statements, but maybe our directional thought process could really help here. We have seen a flat kind of a year last year from a product revenue point of view, and we started well at least in Q1 if I see a 10% YoY growth. Would it be fair to see this year to be a double-digit growth year, or do you think the scenario has not changed to a situation where it would be difficult to conclude any such assumption?
Yes. When I say we'll be consistent, we don't share forward numbers. I can only say that what we have is very difficult, but we continue to focus on fundamentals. We continue to focus on our lean initiatives. Product focus is there. Customer focus is there. We also talked about getting into other markets. We are focusing on that. We talked about the U.S. market. For the attendees, obviously, we will not give or share any.
Right. Or maybe, in an indirect way, if you could cover it in terms of what our pipeline looks like in terms of is it higher, weaker in any region-wise or any color, in any of our materials. I think you are what we all noticed so far, nothing further in the future.
Sure, sure. We'll wait for our members to come. Thank you.
Thank you.
Thank you. Once again, if you wish to ask a question, please 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 Vinay Nadkarni from Hathaway Investments Private Limited. Please go ahead.
Thank you for the opportunity. I just wanted to know this. In your opening remarks, you have said that there was one equalizer. Can you please clarify something on that? What was this project and if it's a project that we have done?
This is a transformation of our 7% layoff for our assembly operations.
Okay. There was a mention of some 20,000 users using the platform. Sorry, it was a bit long.
Please come again?
Because there were some 20,000 users using this product. Is this a very big client for you?
Certainly. In this, we have a tradition of human new collection and mobility services. 20,000 users are logged into the system on any given day. In addition to that, there is a kind of India integration ecosystem which has been built and working in this transformation program because of that.
Okay. This quarter revenue includes a diverse chunk of revenue from this project which is now closed?
This project has another phase in terms of few more models going live. Yes, some part is very slow.
Okay. There was another announcement, something that you said you would be announcing in the coming months, and you should be looking forward to it. Any color you would like to give on that? What exactly is it about?
No, I think on this side, we will not be looking for anything.
Thank you. Thank you.
Thank you. We have a follow-up question from Maharsh Singhi, an individual investor. Please go ahead.
Yeah. The employee cost for a light meter remains unchanged in the coming quarters, and operating expenses also do not have any one-off items. The margins are going to decrease this year.
We will be an ongoing attempt to increase our top line, and that is how we will, we won't need to get back to the margins that we had last year.
Okay, you are relying on new sales, right?
Yes, certainly.
Okay, thank you.
Thank you. If you wish to ask a question, please press * and 1 on your telephone and wait for your name to be announced. I repeat, if you wish to ask a question, please press * and 1 on your telephone and wait for your name to be announced. We have a follow-up question from Maharsh Singhi, an individual investor. Please go ahead.
Yeah, we have the logo shown in the recent quarters.
Quarters.
Okay. Okay.
Thank you. If you wish to ask a question, please press * and 1 on your telephone and wait for your name to be announced. I repeat, if you wish to ask a question, please press * and 1 on your telephone and wait for your name to be announced. As there are no further participants, I would now like to hand over the floor to Mr. Vishnu for his closing comments.
I would like to thank Mr. Ashwani Arora to thank you all once again for your interest in Nucleus Software. I would like to reiterate our commitment to deliver value to all our stakeholders on a long-term basis. Thank you very much.
Thank you. That concludes our conference for today. Thank you for your participating, and we all disconnect now.
Thank you.
Thank you.