NUCLEUS SOFTWARE 2022-23 Annual Report Analysis

Thu, 22 Jun

NUCLEUS SOFTWARE has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

NUCLEUS SOFTWARE Income Statement Analysis

• Operating income during the year rose 27.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 323.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 24.7% in FY23 as against 7.4% in FY22.
• Depreciation charges increased by 21.8% and finance costs increased by 25.9% YoY, respectively.
• Other income declined by 1.7% YoY.
• Net profit for the year grew by 212.4% YoY.
• Net profit margins during the year grew from 8.2% in FY22 to 20.1% in FY23.

NUCLEUS SOFTWARE Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,972	6,345	27.6%
Other income	Rs m	347	341	-1.7%
Total Revenues	Rs m	5,319	6,685	25.7%
Gross profit	Rs m	370	1,568	323.4%
Depreciation	Rs m	154	187	21.8%
Interest	Rs m	8	10	25.9%
Profit before tax	Rs m	555	1,711	208.3%
Tax	Rs m	146	433	196.7%
Profit after tax	Rs m	409	1,278	212.4%
Gross profit margin	%	7.4	24.7
Effective tax rate	%	26.3	25.3
Net profit margin	%	8.2	20.1

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NUCLEUS SOFTWARE Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2 billion as compared to Rs 2 billion in FY22, thereby witnessing an increase of 7.1%.
• Current assets rose 6% and stood at Rs 5 billion, while fixed assets rose 39% and stood at Rs 4 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 9 billion as against Rs 7 billion during FY22, thereby witnessing a growth of 19%.

NUCLEUS SOFTWARE Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	4,936	6,107	23.7
Current Liabilities	Rs m	2,176	2,330	7.1
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	7,368	8,742	18.6
Current assets	Rs m	4,553	4,834	6.2
Fixed Assets	Rs m	2,815	3,908	38.8
Total Assets	Rs m	7,368	8,742	18.6

NUCLEUS SOFTWARE Cash Flow Statement Analysis

• NUCLEUS SOFTWARE's cash flow from operating activities (CFO) during FY23 stood at Rs 498 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -127 million on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -227 million, an improvement of 89% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs 147 million from the Rs 35 million net cash flows seen during FY22.

NUCLEUS SOFTWARE Cash Flow Statement 2022-23

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-22	Mar-23
Cash Flow from Operating Activities	Rs m	577	498	-13.6%
Cash Flow from Investing Activities	Rs m	1,585	-127	-
Cash Flow from Financing Activities	Rs m	-2,129	-227	-
Net Cash Flow	Rs m	35	147	323.6%

Current Valuations for NUCLEUS SOFTWARE

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 47.7, an improvement from the EPS of Rs 15.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,045.0, stands at 21.9 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 4.6 times, while the price to sales ratio stands at 4.4 times.
• The company's price to cash flow (P/CF) ratio stood at 9.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Sales per share (Unadj.)	Rs	185.7	237.0
TTM Earnings per share	Rs	15.3	47.7
Diluted earnings per share	Rs	15.3	47.7
Price to Cash Flow	x	19.7	9.3
TTM P/E ratio	x	27.1	21.9
Price / Book Value ratio	x	3.2	2.2
Market Cap	Rs m	15,648	13,698
Dividends per share (Unadj.)	Rs	7.0	10.0

Ratio Analysis for NUCLEUS SOFTWARE

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 2.1x during FY23, from 2.1x during FY22. 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 168.7x during FY23, from 69.5x during FY22. 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 20.9% during FY23, from 8.3% during FY23. 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 28.2% during FY23, from 11.4% during FY22. 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 14.7% during FY23, from 5.7% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Current ratio	x	2.1	2.1
Debtors’ Days	Days	611	1,005
Interest coverage	x	69.5	168.7
Debt to equity ratio	x	0.0	0.0
Return on assets	%	5.7	14.7
Return on equity	%	8.3	20.9
Return on capital employed	%	11.4	28.2

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 371.1 to Rs 1,045.0, registering a gain of Rs 673.9 or around 181.6%.

Meanwhile, the S&P BSE IT Index is trading at Rs 29,142.2 (down 0.9%). Over the last one year it has moved up from 27,796.2 to 29,142.2, a gain of 1,346 points (up 4.8%).

Overall, the S&P BSE SENSEX is up 22.6% over the year.

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