Buy Nucleus Software; target of Rs 290: Firstcall Research

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Firstcall Research's report on Nucleus Software

Nucleus Software Ltd is the leading provider of mission critical lending and transaction banking products to the global financial services industry. Its software powers the operations of more than 150 customers in 50 countries, supporting retail banking, corporate banking, cash management, internet banking, automotive finance and otherbusiness areas, has reported its financial results for the quarter ended 31st March, 2015.

The company’s Revenue increased by 15.07% to Rs. 1009.00 million in Q4 FY15 compared to Rs. 876.86 million in Q4 FY14. Whereas in the same 4th quarter of FY15, Net profit increased by 9.55% to Rs. 206.43 million from Rs. 188.43 million, when compared with the prior year period. EBIDTA has increased by 16.28% YOY from Rs. 322.15 million to Rs. 277.05 million in 4th quarter of previous year. Reported earnings per share of the company stood at Rs. 6.37 a share during the quarter as against Rs. 5.82 over previous year period.

OUTLOOK AND CONCLUSION

At the current market price of Rs.257.00, the stock P/E ratio is at 11.68 x FY15E and 10.79 x FY16E respectively.

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Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs. 22.01 and Rs.23.82 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 14% over 2014 to 2017E respectively.

On the basis of EV/EBITDA, the stock trades at 4.89 x for FY16E and 4.25 x for FY17E.

Price to Book Value of the stock is expected to be at 1.70 x and 1.53 x respectively for FY16E and FY17E.

"We recommend ‘BUY’ in this particular scrip with a target price of Rs 290 for Medium to Long term investment", says Firstcall Research Report.

For all recommendations, click here

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