Nucleus Software to adopt pay-per-use model this fiscal

Like its bigger peers in the IT industry, Nucleus Software, a supplier of retail banking software to banks, plans to go the pay-per-use way.

The firm plans offer its banking products such as FinnOne Suite, a web-based banking solution for lead, loan, cash management, Cash@Will, a payment solution and other products on a pay-per-use mode starting this fiscal, managing director Vishnu Dusad told DNA. He declined to say which quarter the shift would occur.

“We have seen an 11% decline in topline in the last fiscal… We were expecting some prospective customers from the Middle East, Europe and other foreign banks to come out with orders, but that did not happen. But we grew bottomline for this fiscal a little over 20% through cost cutting measures,” said Dusad.

Nucleus reported a 4.3% decline in net profit to Rs 9.18 crore and 15.8% fall in revenue to Rs 72.2 crore for the fourth quarter of the financial year ended March 31. Operating margins improved to 19.15% for the quarter from 13.76% in the year-ago period on massive cost cuts. The company cut costs 14% during FY10, against a target of 10%.

Meanwhile, the company’s board has approved plans to acquire new products to service existing clients.

“For instance, banks are now focusing on engaging their customers in a big way. We are looking to provide them solutions to leverage various social networks and get to know customer preferences and trends. So we would look to acquire capability in such areas,” said Dusad.

The company has free cash of Rs 162 crore as on March 31. It plans to ramp up revenues from Europe, the US, and Latin America, which have been “negligible” in FY10.

Nucleus earns half of its revenue from Japan, while the Southeast Asia and the Middle East regions contribute about 20% and 15%, respectively. The domestic market accounts for 10% of revenues. The firm earns 70% of its revenue from its top five clients.

Nucleus has set a capital expenditure plan of Rs 5 crore for FY11, which would be used to set up a 250-seater development centre at Jaipur SEZ. Its order book at March-end stood at Rs 164 crore, down from Rs 179 crore as on December-end.