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Multi Baggers

Hem Securities

5.30 AM Jan 1st 1970

Nucleus Softwar

BSE ID : 531209     NSE ID : NUCLEUS

RECOMMENDED PRICE 170.85

PEAK FROM RECO 1265.50 640.71%

CURRENT PRICE 1182.45 Resource id #18

Nucleus Software is a leading global banking software powerhouse. We initiate a 'BUY' on the stock with a target price of Rs 230 with the medium to long term investment horizon.

Nucleus Software

Nucleus Software Exports Ltd. is a leading global banking software powerhouse providing innovative and pioneering products, services & solutions since 1989.

The company has registered robust results for the quarter ending December 2013. Total income from operation has increased by 20.54 percent at Rs 89.96 crore for quarter under review as compared to Rs 74.63 crore for the quarter ended December 31, 2012. The increasing penetration in new markets has given a positive momentum. Operating profit climbed sharply by ~55 percent at about Rs.19.59 crores as against Rs.12.63 crores in the previous year quarter. Cost of delivery including cost of product development is 59.6 percent of revenue as against 63.4 percent of revenue in the previous quarter. The company has reported 89.68 percent rise in its net profit at Rs 23.39 crore for the quarter as compared to Rs 12.33 crore for the same quarter in the previous year.

Revenue from product business for the quarter is at Rs. 61.41 crore against Rs. 49.67 crore, a rise of 23.63 percent y-o-y. Product revenue from own business, for the quarter is at Rs. 58.77 crore against Rs. 48.28 crore, a jump of 21.73 percent y-o-y. Projects and services business revenue for the quarter is at Rs. 28.55 crore against Rs. 24.96 crore, moved up by 14.39 percent.

Revenue contribution from the top 5 clients for the quarter stood at 40 percent; similar to the preceding quarter. The geographies Africa, India and Middle East posted good growth for the quarter ended December 2013. Japan remained more or less the same.

Valuation

With new product launches and increasing penetration in new geographies, strong market share with good customer relationships and improving productivity; Nucleus Software Exports Ltd. growth looks promising. We believe the company is trading at an attractive valuation at 9.71x and 8.21x of FY14EPS of Rs.17.60 and FY15EPS of Rs.20.82. We initiate a 'BUY' on the stock with a target price of Rs 230 (appreciation of about 35 percent) with the medium to long term investment horizon.

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Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advise. Reader is requested to rely on his own decision and may take independent professional advise before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned here in and the same have acted upon or used the information prior to, or immediately following the publication. Analyst Certification The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

NucleusSoftware_HemSec_Multibagger.pdf

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