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Nucleus Software plans to continue investing in building leadership team outside India : Avnish Datt

May 12, 2015 | India Infoline
Source : http://www.indiainfoline.com/article/news-top-story/nucleus-software-plans-to-continue-investing-in-building-leadership-team-outside-india-avnish-datt-115051200268_1.html

Nucleus Software, the leading provider of mission critical lending and transaction banking products to the global financial services industry, on Friday, reported its consolidated results for the financial year ended March 31, 2015. Consolidated revenue for the fourth quarter of FY 2015 is at  Rs. 100.9 crore in comparison to Rs. 87.7 crore in the corresponding quarter previous year. Revenue for FY 2015 is at Rs. 353.1 crore, against Rs. 346.2 crore in FY 2014.


In an interview with CNBC TV18, Avnish Datt, Global head-Strategy and Development, Nucleus Software, said that the long term bets which the company started working on around 18-24 months back, have started dripping off returns now, which has led to 17 percent sequential jump in the revenues.

Moreover, operationally, the company has seen a 60 percent plus jump in the EBITDA margins which has now gone above the 24 percent odd mark. Datt feels that they could achieve that due to heavy investment in building leadership teams in the international market. They have opened up new offices and recruited senior leadership talent outside the country.

Though the company is in full swing to invest in building team, the cash on books is close to Rs. 350 crore. Talking about their plan to deploy the cash, he said, "We continue to be conservative when it comes to inorganic growth. However, the cash on the books allows us to make longer term bets to not worry too much about long-term strategic investments. We have started opening up in the US market so we opened up an office and got a very senior person to look after the US market. We continue to plough the cash into developing new markets".

Last year the company opened new offices in Australia, US and they area also exploring their presence in Europe. They are looking to ramp-up go-to market in Japan. Further, they have moved some of the teams and deployed senior leadership resources in sub Saharan African market.

The company feels that the shareholder rewards would be in the long-term growth of the organisation. Presently, they are not looking at using the cash per se but in future they might plan to use to maximise the potential.

When asked Datt about what percentage of the revenues is the sales and marketing expenses and how much sales and expense the company wants to go up as a percentage of revenues, considering the investments, he said, "Given the mode we are in right now, we are not minding the limits on sales and marketing expenses as much. So, we don’t have an upper limit. We are looking at what is it that is required for us to grow to our potential and what is it that is required for us to leverage the new product launches, the best in some of the high yield markets. Directionally, you will see us continuing to invest in sales and marketing. The current spend is 13 percent. So, the sales and marketing expenses were 13 percent".

Stock Price:

At 10:27 AM, the stock of the company is trading at Rs. 254. The stock is trading down 4.7% from its previous close which was at Rs. 265.90. It hit a high at Rs. 269 and low at Rs. 255.60. The total traded quantity is 44,000 and two-week average quantity is 1.12 lakh.