NUCLEUS SOFTWARE 2020-21 Annual Report Analysis

Wed, 31 Mar

NUCLEUS SOFTWARE has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

NUCLEUS SOFTWARE Income Statement Analysis

• Operating income during the year fell 1.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 37.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 25.2% in FY21 as against 18.1% in FY20.
• Depreciation charges increased by 2.4% and finance costs increased by 8.9% YoY, respectively.
• Other income grew by 6.4% YoY.
• Net profit for the year grew by 32.5% YoY.
• Net profit margins during the year grew from 17.1% in FY20 to 23.0% in FY21.

NUCLEUS SOFTWARE Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	5,208	5,135	-1.4%
Other income	Rs m	372	396	6.4%
Total Revenues	Rs m	5,581	5,531	-0.9%
Gross profit	Rs m	942	1,293	37.2%
Depreciation	Rs m	136	139	2.4%
Interest	Rs m	11	12	8.9%
Profit before tax	Rs m	1,168	1,538	31.7%
Tax	Rs m	278	359	29.0%
Profit after tax	Rs m	890	1,180	32.5%
Gross profit margin	%	18.1	25.2
Effective tax rate	%	23.8	23.3
Net profit margin	%	17.1	23.0

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NUCLEUS SOFTWARE Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 2 billion as compared to Rs 2 billion in FY20, thereby witnessing an increase of 4.8%.
• Current assets rose 38% and stood at Rs 6 billion, while fixed assets fell 14% and stood at Rs 3 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 9 billion as against Rs 8 billion during FY20, thereby witnessing a growth of 17%.

NUCLEUS SOFTWARE Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	5,609	6,720	19.8
Current Liabilities	Rs m	1,890	1,980	4.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,579	8,847	16.7
Current assets	Rs m	4,455	6,151	38.1
Fixed Assets	Rs m	3,124	2,696	-13.7
Total Assets	Rs m	7,579	8,847	16.7

NUCLEUS SOFTWARE Cash Flow Statement Analysis

• NUCLEUS SOFTWARE's cash flow from operating activities (CFO) during FY21 stood at Rs 1 billion, an improvement of 53.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion, an improvement of 331.8% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -133 million, an improvement of 61% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -245 million from the Rs 123 million net cash flows seen during FY20.

NUCLEUS SOFTWARE Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	747	1,149	53.8%
Cash Flow from Investing Activities	Rs m	-291	-1,257	-
Cash Flow from Financing Activities	Rs m	-341	-133	-
Net Cash Flow	Rs m	123	-245	-

Current Valuations for NUCLEUS SOFTWARE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 40.6, an improvement from the EPS of Rs 30.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 481.6, stands at 10.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 1.9 times, while the price to sales ratio stands at 2.7 times.
• The company's price to cash flow (P/CF) ratio stood at 10.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	179.3	176.8
TTM Earnings per share	Rs	30.6	40.6
Diluted earnings per share	Rs	33.2	44.1
Price to Cash Flow	x	4.6	10.2
TTM P/E ratio	x	5.3	10.9
Price / Book Value ratio	x	1.5	2.0
Market Cap	Rs m	8,245	13,465
Dividends per share (Unadj.)	Rs	9.0	9.0

Ratio Analysis for NUCLEUS SOFTWARE

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.1x during FY21, from 2.4x during FY20. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 127.1x during FY21, from 105.3x during FY20. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 17.6% during FY21, from 15.9% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 23.1% during FY21, from 21.0% during FY20. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 13.5% during FY21, from 11.9% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	2.4	3.1
Debtors’ Days	Days	632	609
Interest coverage	x	105.3	127.1
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.9	13.5
Return on equity	%	15.9	17.6
Return on capital employed	%	21.0	23.1

To see how NUCLEUS SOFTWARE has performed over the last 5 years, please visit here.

NUCLEUS SOFTWARE Share Price Performance

Over the last one year, NUCLEUS SOFTWARE share price has moved up from Rs 177.1 to Rs 481.6, registering a gain of Rs 304.6 or around 172.0%.

Meanwhile, the S&P BSE IT Index is trading at Rs 26,543.2 (down 0.7%). Over the last one year it has moved up from 12,842.7 to 26,543.2, a gain of 13,701 points (up 106.7%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

(To know more, check out historical annual results for NUCLEUS SOFTWARE and quarterly results for NUCLEUS SOFTWARE)

Read: Latest Annual Report Analysis of NUCLEUS SOFTWARE