Wrote previously about this here Looking at Nucleus Software’s massive eight years of yawning under performance made me look further back in its history. There is a lot wrong with the company and the company is generally compared with OFSS and Polaris. This may not be the right comparison, 80% of revenues of Nucleus are earned outside India.All continents account for nearly equal percentage of revenues now giving it multiple legs.


Annual revenues and Profits

Year
Revenues INR Crores
Profit After Tax INR Crores
2000-01
27
10
2001-02
40
10
2002-03
60
7
2003-04
54
10
2004-05
67
15
2005-06
94
28
2006-07
146
42
2007-08
288
61
2008-09
328
32
2009-10
291
38
2010-11
270
26
2011-12
282
35
2012-13
293
45
2013-14
346
64
2014-15
350E
65E

The company is dependent on a very narrow and niche segment with lumpy earnings and marked by absence of growth for multiple years at times.
– No Growth, Value Trap, Mediocre Management and a few more issues with the company.
Positives:
Intellectual Property, Product Based company, #1 in its Lending Niche, 103 / share cash (CMP 175)  in hand, which makes me feel its a bargain. That said, I may give the company up to 4 quarters to perform or out.
Disclosure: Invested.



Source link

By admin