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: Long Term Equities – Read entire story here.
