Nucleus Software Exports Limited

Technology — Software - Application · NSE

₹681.00+₹1.70 (+0.25%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Nucleus Software Exports Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Nucleus Software Exports Limited provides lending and transaction banking products to the financial services industry in India, the Far East, South East Asia, Europe, the Middle East, Africa, Australia, and internationally.

IndustrySoftware - Application

SectorTechnology

Employees1,954

Annual revenue₹876 Cr

How does it make money?

Turns over ₹876 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 1,954 employees supports ₹44.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹44.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 15.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 11.7% and earnings to grow about 10.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.7%

Est. earnings growth+10.1%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +38% while net margin moved -34% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+38%

Margin effect-34%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 11.4% is steady
✗ Profit has declined at 3.0% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Latest-year revenue growth of -3.3% is below the longer-term trend — momentum is fading
✗ Profit fell 32.2% in the latest year

Quality vs. Valuation

Company Quality

59/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

59/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

17.0x

3Y Median

16.5x

40 monthly readings · mean 18.7x · range 11.2x–33.5x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 16.5x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 16.5x.

vs. its own history

Fair

16.5x median over 40 months · +3%

vs. sector peers

Fair

16.5x median of 4 peers · +3%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 93% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 20.9% to 12.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 26.8% to 15.3% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 8.0 points, from 26.5% to 18.5%.
🟡Debt is increasingFinancial
Total debt is up 37% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 26.5% to 18.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 20.9% to 12.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 9% a year✓ 11.4% CAGR
Latest reported year was -3.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 18.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹89 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹1,793 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.0x

Fair

Fairly valued against the generic band

P/B Ratio

1.98x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹40.04

Profitable

Profitable on a per-share basis

ROE

12.9%

Moderate

Moderate capital efficiency

ROCE

15.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.94x

Moderate

Moderate leverage

Revenue Growth (YoY)

-3.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-32.2%

Falling

Profits are shrinking

Dividend Yield

1.84%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹89 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

11.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

1.3%

Weak

Thin margins leave little room for error

Net Margin

12.1%

Good

Strong bottom-line conversion

Current Ratio

2.09

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.02

Defensive

Steadier than the market

52W Range Position

16%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

659.7 / 694.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

49.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹634 Cr	₹826 Cr	₹832 Cr	₹876 Cr	+11.4%
EBITDA	₹168 Cr	₹238 Cr	₹195 Cr	₹162 Cr	-1.3%
EBITDA Margin	26.5%	28.8%	23.4%	18.5%	—
PAT (Net Profit)	₹128 Cr	₹192 Cr	₹163 Cr	₹117 Cr	-3.0%
EPS	₹47.73	₹71.56	₹61.4	₹44.35	-2.4%
ROE	20.9%	24.6%	20.0%	12.9%	—
ROCE	26.8%	31.3%	25.2%	15.3%	—
Total Debt	₹6 Cr	₹5 Cr	₹2 Cr	₹9 Cr	+11.0%
Free Cash Flow	₹46 Cr	₹193 Cr	₹136 Cr	₹89 Cr	+24.5%

🟢 Revenue has grown at 11.4% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-1.3% a year).

🔴 EBITDA Margin has fallen from 26.5% to 18.5% over 3 years (-8.0 pts).

🔴 PAT (Net Profit) has shrunk at 3.0% a year over 3 years.

🔴 EPS has shrunk at 2.4% a year over 3 years.

🔴 ROE has fallen from 20.9% to 12.9% over 3 years (-8.1 pts).

🔴 ROCE has fallen from 26.8% to 15.3% over 3 years (-11.5 pts).

🔴 Total Debt has grown at 11.0% a year over 3 years.

🟢 Free Cash Flow has grown at 24.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,266 Cr

Total Liabilities

₹359 Cr

Cash & Equivalents

₹80 Cr

Operating Cash Flow

₹117 Cr

Capex

-₹28 Cr

Shareholding (proxy)

Institutional Holding

2.3%

Insider Holding

74.1%

Corporate Actions

Dividend Rate

₹12.5

Ex-Dividend Date

10 Jul 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,000

+46.8% vs CMP

Target Range

₹1,000 – ₹1,000

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

2 mixed4 general

Nucleus Software Exports (NSEI:NUCLEUS) Stock Forecast & Analyst Predictions

Simply Wall Street, 02 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Nucleus Software Exports Ltd. 52 Week Low Streak Analysis

Univest, 08 Oct

Nucleus Software shares rally 18% to hit 52-week high as firm enters into partnership with Azentra Solusi Digital

Upstox, 10 JunPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Compare Nucleus Software with

Equitymaster, 16 Oct

Nucleus Software proposes buying 1.14 lakh shares for employee RSU scheme

scanx.trade, 17 Aug

Nucleus Software Exports Ltd is Rated Sell

MarketsMojo, 02 Oct

Watch Items

Revenue growth is negative (-3.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Profitability · Valuation · Risk

WeakGrowth

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑