Nucleus Soft to maintain margins, bullish on growth

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ICICI Securities' brokerage has put out a price target of Rs 345 on Nucleus Software. That is a good 50% jump or thereabouts on the current price of Nuclear Software.

 

Vishnu R Dusad , MD of Nucleus Software said the pipeline for US looks robust and margins are good. He told CNBC-TV18 that they are bullish on the company's future growth rate.

 

Dusad stated that they have an advantage of their intellectual property-led business model and this will help them maintain margins at the level of 25%.

 

According to Dusad, Islamic banking is an arena that is going to grow substantially across the globe. Nucleus Software's lending solution is ready for being deployed in Islamic countries.

 

Excerpts from CNBC-TV18's exclusive interview with Vishnu R Dusad:

 

Q: How does the revenue pipeline look like? How have margins shaped up? Since you are operating in Japan, the margins are not under as much pressure as they are for companies operating in the US?

 

A: The pipeline for the US is very robust and the margins are also good. However, we continue to invest very substantially in new intellectual property development as well as our capabilities to handle multiple cultures, including Japanese culture and language. We are fairly bullish about our future growth rate.

 

Q: Will you be able to maintain 25% margins that you have been posting over the past several years?

 

A: Yes, because we have an advantage of our intellectual property-led business model. That is what would give us that leverage for maintaining margins to this level.

 

Q: You have received the deals for Islamic Retail Solutions and received a renewal of deals from at least two of your existing clients. How is the traction in that space? What is the outlook going ahead?

 

A: Islamic Banking is an arena, which is going to grow very substantially across the globe. We are preparing ourselves substantially in that direction. Our lending solution is now ready for getting deployed in Islamic countries. If someone wants to do it in India, as well or any other country, then they would be able to start using our solutions. From current levels of around USD 200 billion worth of assets on the Islamic side, we visualize over next 5-10 years the assets to go to trillions of dollars simply because a whole lot of money from all over the world is moving into Middle-East thanks to the increase in oil prices.

 

Q: What kind of revenue growth are you expecting for your entire business, thanks to this Islamic business? By what percentage will your revenues grow?

A: I don't think we can give guidance, but we do visualize substantial growth on the new Islamic banking offering in the Middle-East market. We have increased our strength in that market place, in terms of sale and support. We have hired an office in Dubai and we will be able to support all our customers not just in Middle East but in Northern Africa as well.

 

We have a customer in the name of Arab Bank in Jordan. All these customers want to offer Islamic Banking Solutions to their customers and that is where our product will help them.