Nucleus Software profit falls 19% as costs outpace revenue

Nucleus Software Exports Limited reported consolidated profit of Rs 21.25 crore for the quarter ended 30 September 2026, down 19% from Rs 26.29 crore a year earlier. Nucleus Software’s software products and services revenue rose 7% to Rs 227.70 crore, but total expenses increased 12% to Rs 217.52 crore, reducing profit before tax to Rs 26.20 crore.

Why did Nucleus Software’s September-quarter profit fall?

Nucleus Software’s quarterly profit fell because employee benefits and operating expenses increased faster than revenue. Total income rose 6% year on year to Rs 243.72 crore in the quarter ended 30 September 2026, while total expenses rose 12% to Rs 217.52 crore from Rs 194.26 crore in the September 2025 quarter.

Employee benefits expense, the largest cost line, increased by Rs 16.71 crore to Rs 164.24 crore from Rs 147.53 crore. Operating and other expenses rose by Rs 5.07 crore to Rs 47.64 crore, while depreciation, amortisation and impairment expense increased by Rs 1.40 crore to Rs 5.23 crore. Finance cost rose to Rs 41 lakh from Rs 33 lakh.

As a result, profit before exceptional items and tax declined 26% to Rs 26.20 crore from Rs 35.41 crore. Other income was largely unchanged at Rs 16.02 crore against Rs 16.16 crore a year earlier, while net tax expense fell to Rs 4.95 crore from Rs 9.12 crore. The lower tax charge partly offset the operating-profit decline, but profit for the period still decreased by Rs 5.04 crore.

How did Nucleus Software perform versus the June quarter?

Nucleus Software’s September-quarter software revenue increased sequentially, but reported profit was lower than in the June quarter. Revenue from software products and services rose to Rs 227.70 crore from Rs 210.43 crore in the quarter ended 30 June 2026, while profit for the period declined to Rs 21.25 crore from Rs 23.87 crore.

The sequential profit comparison includes the effect of an exceptional item reported in June. Profit before exceptional items and tax was Rs 26.20 crore in September, above Rs 20.28 crore in June, but the June quarter included an exceptional item of Rs (9.82 crore), resulting in reported profit before tax of Rs 30.10 crore. No exceptional item was reported for September.

Employee benefits expense rose by Rs 7.06 crore sequentially to Rs 164.24 crore, and operating and other expenses increased by Rs 2.35 crore to Rs 47.64 crore. Total expenses were Rs 217.52 crore against Rs 207.98 crore in June, while other income declined to Rs 16.02 crore from Rs 17.83 crore. Basic and diluted earnings per share were Rs 8.08, not annualised, compared with Rs 9.07 in June.

September total comprehensive income was Rs 27.66 crore, compared with Rs 23.79 crore in June. The September result included Rs 6.41 crore of other comprehensive income, whereas June recorded an other comprehensive loss of Rs 8 lakh. Paid-up equity share capital stood at Rs 26.33 crore, with a face value of Rs 10 per share.

Which markets contributed to Nucleus Software’s quarterly revenue?

Nucleus Software’s India segment remained its largest revenue contributor, generating Rs 130.47 crore in the September 2026 quarter. India revenue rose from Rs 122.56 crore a year earlier and Rs 118.06 crore in June, accounting for more than half of consolidated software products and services revenue of Rs 227.70 crore.

The Middle East generated Rs 28.23 crore, up from Rs 26.49 crore a year earlier, while Europe revenue increased to Rs 13.01 crore from Rs 9.84 crore. Far East revenue rose to Rs 8.59 crore from Rs 7.77 crore. South East Asia was nearly unchanged at Rs 24.98 crore, compared with Rs 25.00 crore in the prior-year quarter.

Africa revenue declined to Rs 2.15 crore from Rs 2.45 crore, whereas Australia revenue rose to Rs 4.42 crore from Rs 3.72 crore. The category labelled Others generated Rs 15.85 crore, compared with Rs 15.68 crore. The geographical segments totalled Rs 227.70 crore, and the filing reported no inter-segment revenue.

India also delivered the largest segment profit before tax, at Rs 62.64 crore, although this was below Rs 68.11 crore a year earlier. Europe’s segment profit before tax rose to Rs 6.92 crore from Rs 3.72 crore, while South East Asia remained loss-making at Rs 4.42 crore, compared with a Rs 6.63 crore loss a year earlier. Total segment profit before tax was Rs 74.00 crore before unallocable corporate expenditure of Rs 63.82 crore.

What do Nucleus Software’s half-year results show?

Nucleus Software’s six-month profit declined despite a modest increase in revenue. Consolidated profit for the six months ended 30 September 2026 was Rs 45.12 crore, down from Rs 61.49 crore a year earlier, while software products and services revenue increased 2% to Rs 438.13 crore from Rs 431.23 crore.

Total income increased to Rs 471.98 crore from Rs 465.35 crore, but total expenses rose 12% to Rs 425.50 crore from Rs 381.64 crore. Employee benefits expense increased by Rs 28.34 crore to Rs 321.42 crore, operating and other expenses rose by Rs 12.17 crore to Rs 92.93 crore, and depreciation, amortisation and impairment expense increased by Rs 3.14 crore to Rs 10.37 crore.

Profit before exceptional items and tax fell to Rs 46.48 crore from Rs 83.71 crore. The six-month result included the Rs (9.82 crore) exceptional item recorded in the June quarter, which resulted in reported profit before tax of Rs 56.30 crore, compared with Rs 83.71 crore in the prior-year period. Net tax expense declined to Rs 11.18 crore from Rs 22.22 crore, and basic and diluted earnings per share were Rs 17.15 against Rs 23.36, both not annualised.

India’s six-month revenue was Rs 248.53 crore, marginally below Rs 249.26 crore in the corresponding prior-year period. Europe revenue increased to Rs 24.48 crore from Rs 20.57 crore and Middle East revenue rose to Rs 53.71 crore from Rs 49.71 crore, while South East Asia revenue declined to Rs 47.79 crore from Rs 51.18 crore.

Conclusion

Nucleus Software recorded higher September-quarter revenue, but the increase did not keep pace with employee benefits and operating costs. The company added Rs 14.19 crore in quarterly software revenue year on year, while employee benefits expense rose by Rs 16.71 crore and operating and other expenses increased by Rs 5.07 crore, contributing to the 19% decline in consolidated profit.

The next results will show whether the September quarter’s Rs 26.20 crore profit before exceptional items and tax can be maintained as costs change. The filing also leaves South East Asia as a disclosed area to watch: its quarterly segment loss narrowed to Rs 4.42 crore from Rs 6.63 crore, but the segment remained loss-making.