Buy Nucleus Software Exports; target of Rs 450: Dolat Capital
Dolat Capital is bullish on Nucleus Software Exports has recommended buy rating on the stock with a target price of Rs 450 in its research report dated August 10, 2020.
August 12, 2020 / 04:06 PM IST
Dolat Capital's research report on Nucleus Software Exports
Nucleus revenues stood at Rs 1.28bn down 7% QoQ in line with our estimates. Performance was far better than the caution it shared in Q4 commentary. Order book in Product segment stood at Rs 4.04bn, (flat QoQ, as well as YoY basis). Profitability surprised significantly as it improved 600bps QoQ at 26% (best ever) versus our estimate at 15%. PAT beat was extended (reported Rs363mn, vs DE Rs210mn) led by 30% QoQ jump in Other Income and lower ETR of 21.8% (FY20: 23.8%). Management commentary improved materially as it witnessed better bookings and have healthy pipeline across product offering. However, management refrained to call it as New Normal and expect a potential risk of trend reversing again.
However, we are enthused by sustained demand momentum and tighter cost management which has helped in revival our estimates largely back to pre-Covid levels. We maintain Buy rating on the stock with TP of Rs450 (implies 11x on FY22e earnings).
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