Nucleus Software Exports (531209) Q4 02/03 earnings summary

Executive summary

• FY03 consolidated revenue rose 44.57% to Rs.8,979.04 lacs; PAT declined to Rs.841.01 lacs from Rs.1,084.01 lacs.

• Product revenues reached Rs.28.32 crore, 32% of turnover, up from 20%; 16 new clients brought the active base to 71.

• Profitability absorbed doubtful-debt provisions/write-offs and additional depreciation; Q4 operating margin improved sequentially to 23% from 16%.

Financial highlights

• Consolidated total revenue Rs.8,979.04 lacs vs Rs.6,210.90 lacs YoY; operating profit (PBIDT) Rs.1,678.51 lacs vs Rs.1,599.55 lacs.

• Consolidated PAT Rs.841.01 lacs, down from Rs.1,084.01 lacs; EPS Rs.10.63 vs Rs.14.48.

• Parent revenue from operations grew 51% to Rs.6,072.17 lacs; export income rose 57% to Rs.4,945.37 lacs and was 81% of turnover.

• Consolidated operating cash flow increased to Rs.1,225.16 lacs from Rs.668.00 lacs; days of sales receivable fell to 95 from 122.

Outlook and guidance

• Outlook remained cautiously optimistic for FY04, with continued investment planned in products, market development and human resources.

• Management expected higher future operating margins after doubtful-debt charges and the useful-life depreciation revision, described as unlikely to recur.

• Near-term priorities included expense controls, improved forecasting and process efficiency, with Six Sigma-level efficiencies targeted in the medium term.