Nucleus Software Q2 Revenue Rises 6.7% as Profit Declines

Nucleus Software Exports Limited reported consolidated Q2 FY27 revenue of Rs 227.70 crore, up 6.7% year-on-year, but profit after tax declined to Rs 21.25 crore from Rs 26.29 crore in the corresponding quarter. The results show continued revenue growth alongside lower profitability and a decline in operating margin.

What did Nucleus Software report for Q2 FY27?

Nucleus Software reported consolidated revenue of Rs 227.70 crore for the quarter ended September 30, 2026. Revenue was 8.2% higher quarter-on-quarter and 6.7% higher than Rs 213.51 crore reported in Q2 FY26, according to the company’s earnings call and results announcement.

Consolidated EBITDA stood at Rs 15.41 crore, while profit after tax was Rs 21.25 crore. Earnings per share was Rs 8.08, compared with Rs 9.99 in the year-earlier quarter. The company announced the results on October 31, 2026, and held its earnings conference call on November 2, 2026.

How did revenue growth develop during the quarter?

Nucleus Software’s quarterly revenue growth was supported by activity across India, Asia-Pacific and the Middle East. Managing Director Vishnu R. Dusad said projects were running in parallel across these markets, with each project at a different stage of conversion.

In dollar terms, quarterly revenue was $24 million, up 6.9% sequentially and 10% year-on-year. For the first half of FY27, consolidated revenue stood at Rs 438.10 crore, a 1.6% year-on-year increase. Half-year revenue in dollar terms was $46.5 million, down 6.9% year-on-year.

The quarter’s Rs 227.70 crore revenue was described as one of the company’s highest revenue levels in the past six quarters. The difference between rupee and dollar growth rates indicates that currency translation also affected the reported rupee performance over the comparison periods.

Why did profitability decline despite higher revenue?

Profitability declined because Nucleus Software’s EBITDA margin fell to 6.8% in Q2 FY27 from 10.8% in Q2 FY26. The company did not provide a detailed cost-line explanation in the supplied results material, but the margin movement shows that operating profit did not rise in line with revenue.

The pressure was also visible in the first half. H1 FY27 EBITDA margin was 5.3%, compared with 13.2% in H1 FY26. This was followed by a reduction in quarterly profit after tax to Rs 21.25 crore, even as quarterly revenue rose by Rs 14.19 crore from the previous year.

For investors, the results separate topline execution from earnings conversion. Revenue expansion demonstrates ongoing demand and project activity, while lower margins and profit indicate that the financial benefit from that growth was more limited during the quarter.

Which geographies contributed to Nucleus Software’s revenue?

India remained Nucleus Software’s largest revenue market, accounting for 57.3% of quarterly revenue. The Middle East contributed 12.4%, South Asia accounted for 11%, and Europe represented 5.7%, with the remaining revenue coming from other regions.

The regional mix was broadly comparable with the previous financial year’s period, when India accounted for 57.8% of revenue. South Asia then represented 11.9%, the Middle East 11.5%, and Europe 4.8%. The latest mix therefore shows a small increase in the Middle East and Europe shares, while India remained the central market.

What did management say about operations and order activity?

Management said its projects were progressing simultaneously across India, APAC and the Middle East, though they were at different stages of conversion. This indicates that the company’s delivery and sales activity spans multiple markets rather than relying on a single regional programme.

During the earnings call, participants asked management about the geographical split of orders won over the previous three quarters. The supplied transcript material does not provide a management response with a quantified India-versus-overseas order split, so no verified breakdown can be drawn from the available information.

The company also disclosed that India segment profit before tax was Rs 62.64 crore for the quarter ended September 30, 2026. This figure reflects the importance of the domestic business within the company’s regional operations, although it should not be directly compared with consolidated profit after tax because the measures are reported at different levels.

Conclusion

Nucleus Software delivered higher Q2 FY27 revenue, supported by business across India and overseas markets, but its operating margin, profit after tax and earnings per share were lower than a year earlier. The main financial issue in the quarter was the gap between revenue growth and profitability, with EBITDA margin falling to 6.8% from 10.8%.

Investors will watch whether ongoing projects in India, APAC and the Middle East convert into further revenue and whether margins recover from the 5.3% level reported for the first half of FY27. A clearer disclosed split between domestic and overseas order wins would also help assess the composition of future business.