Nucleus Software Exports Limited (531209) Earnings Call Transcript & Summary

Good afternoon, everyone. This is [Karthikeyan]. A very warm welcome to all of you for this Nucleus Software earnings conference call for the quarter and year ended on March 31, 2025. For discussions, we have here from the management team, Mr. Vishnu R. Dusad, our Managing Director; Mr. Parag Bhise, CEO and Executive Director; Mr. Anurag Mantri, COO and Executive Director; Mr. Surya Prakash Kanodia, Chief Financial Officer; Mr. Ashwani Arora, Senior Vice President; Mr. Ashish Khanna, Chief of Staff and Chief Marketing Officer; Mr. Mukesh Bangia, Vice President; Mr. Abhishek Pallav, Vice President; Mr. Pradeep Malik, Vice President; Ms. Swati Patwardhan, Chief Human Resource Officer; and Mr. Tapan Jayaswal, Financial Controller. As you all are aware, Nucleus Software does not provide any specific revenue earnings guidance. Anything which is said during this call, which may reflect company's outlook for the future or which may be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. An audio and transcript of this call would be shortly available on the Investors section of the company's website, www.nucleussoftware.com. With this, we are now ready to begin with the opening comments on the performance of the company. And post that, we would be available for the question-and-answer session. With this, I now pass it over to Mr. Vishnu. Thank you, and over to you, sir.

Thank you. A warm welcome to the investor call for the quarter and year ending 31st March 2025. We are thankful to you for your interest in Nucleus Software. It has been a year of building strength and delivering sustained value to our customers. We have been making steady progress in aligning our resources for customer success and are confident of increasing the value that we deliver. With those words, I'm handing over to Parag.

Thank you, sir, and welcome, everyone, to this quarter's call. A warm welcome to you. This quarter, as Mr. Vishnu mentioned, has been good for us. We managed to add a few new logos in this quarter and also got some incremental support from our customers, existing customers. And we were able to complete some -- achieve some significant milestones, and that's what is reflecting in our numbers. We continue our focus on our investments in technology as well as our people. That is going to be a continued focus for the entire year. Our lean journey, what we have been talking about remains our focus, and we plan to take it to the next levels to derive maximum benefit. I'll close with these remarks. Thank you very much. And over to Tapan for giving the financial update.

Sir, and good afternoon, everyone. Highlights from financials are. Our consolidated revenue for the quarter is at INR 228.9 crores, INR 205.7 crores quarter-on-quarter, INR 10.3 crores year-on-year. For the year, it is INR 832.3 crores against INR 826.5 crores for the previous year. Overall revenue in foreign currency, including India rupees revenue for the quarter is USD 26.5 million USD 24.4 million quarter-on-quarter and USD 25.3 million year-on-year. For the year, it is USD 98.5 million against, USD 100.6 million for the previous year. Product revenue for the quarter is at INR 199.6 crores against INR 174.8 crores quarter-on-quarter, INR 179.4 crores year-on-year. For the year, it is INR 713.8 crores against INR 711.4 crores for the previous year. Revenue from projects and services for the quarter is at INR 29.4 crores against INR 30.9 crores quarter-on-quarter against [Technical Difficulty] crores year-on-year. For the year, it is INR 118.5 crores against INR 115.1 crores for the previous [Technical Difficulty]. For expenses, cost of delivery, including cost of product development for the quarter is 57.3% of revenue, 70.7% of revenue quarter-on-quarter and 63.5% of revenue year-on-year. In absolute terms, this is INR 131.3 crores against INR 145.5 crores quarter-on-quarter, INR [Technical Difficulty] crores year-on-year. For the year is INR 568.7 crores, INR 511 crores for the previous year. For marketing and sales expenses for the quarter is 4.9% of revenue against [8.6%] of revenue quarter-on-quarter and 3.3% year-on-year. [Technical Difficulty] terms this is INR 11.2 crores against INR 11.6 crores quarter-on-quarter and INR 6.9 crores year-on-year. For the year, at INR 36.1 crores, INR 6.6 crores the previous year. [Technical Difficulty] expenses for the quarter is 5.3% of revenue, 1.6% of revenue quarter-on-quarter and 5.7% year-on-year. [In absolute] terms, this is INR 12.1 crores against INR 15.6 crores quarter-on-quarter and INR 11.9 crores year-on-year. For the year [Audio Gap] for the previous year. EBITDA for the quarter is at INR 74.3 crores against INR 33 crores quarter-on-quarter, [Technical Difficulty] crores year-on-year. For the year, EBITDA is at INR 167.6 crores against INR 219.5 crores in the previous year. Other income from investment and deposit is at INR 16.7 crores against INR 14.8 crores quarter-on-quarter and INR 14 crores year-on-year. Total other income for the quarter is INR 16.6 crores against INR 15.6 crores quarter-on-quarter and [INR 13.2]crores year-on-year. For the year, other income from investments and deposit is at INR 64.8 crores against INR 48.1 crores for the previous year. Other income for the year is INR 66.3 crores against INR 50.9 crores for the previous year. Total taxes are at INR 22.8 crores against INR 10 crores quarter-on-quarter and INR 16.3 crores year-on-year. For the year, taxes are INR 56.1 crore against INR 64.2 crores in the previous year. Net profit is at INR 64.8 crores for the quarter against INR 35 crores for the [Q-on-Q] and INR 52.1 crores year-on-year. For the year, [Technical Difficulty] INR [163 crores], INR 6 crores in the previous year. The comprehensive income is at negative INR 0.2 crores for the quarter against negative INR 1.7 crores quarter-on-quarter [Technical Difficulty]. For the year at negative [Technical Difficulty] crores against positive INR [indiscernible] crores in the previous year. Total comprehensive income, which includes net profit and other comprehensive income is at [INR 4.6 crores] against INR 33.3 crore quarter-on-quarter and INR 46.1 crores year-on-year. The year, it is at INR 159.4 crores [Technical Difficulty] 93.6 crores in the previous year. For the quarter is at INR 24.6 as against INR 13.3 quarter-on-quarter and INR 19.5 year-on-year. For the year, it is at INR 61.4 against INR 71.6 in the previous year. In terms of foreign currency hedges on 31st March 2025, we had USD [indiscernible] Million of forward contracts at an average rate of [ 86.24]. There is a mark-to-market gain of INR 0.06 crores, which is taken to the hedging reserve in the balance sheet. Revenue contribution from the top 5 clients for the quarter is 7.8% against 28.1% in the previous quarter. Total cash and cash equivalent as on 31st March 2025 are INR 877.3 crores against INR 877.9 crores as on 31st December 2024. This includes balance in current accounts of INR 50.5 crores, various schemes of mutual fund INR 597.4 crores, fixed deposits of INR 196.1 crores, investments in tax-free bonds of INR 33.3 crores [Technical Difficulty] with regards to receivables, we are at INR 137.4 crores against INR [Technical Difficulty] during the quarter, there is a gross addition of fixed assets of INR 8.50 crores, consisting of [Technical Difficulty] machinery [Technical Difficulty] fixtures [Audio Gap] call over to Poonam.

Tapan sir, sorry, sir, your voice is not audible.

[Technical Difficulty] Sir, my update is complete. Tell me?

[Operator Instructions] We have first question from Rushab Shah from [BugleRock] [indiscernible]

Sir, one of the questions I have that in one of the key things in your company are the employees. So what has been the attrition rate over the years? And what kind of incentives do you provide so that they stick with us for a long period of time?

So our attrition for last couple of years is our average is less than the industry average, substantially less than the industry average. Our voluntary plus involuntary attrition would be at around 11% and lesser. That's on attrition. And the second question was?

Measure we are taking to retain?

In terms of measures that we are taking to retain, I think we have two focus areas. One is continuous engagement with our people. So our engagement pillars when it comes to career growth and development are very, very robust. And there is a lot of focus on continuous improvement in development. And the second part is on the experience. So the internal voice of customer is something that we keep channeling our -- energies and insights into. So arresting any early discontent and tackling it before it reaches the resignation stage, that's something that we do proactively for retention. And then from an incentive perspective, our compensation structure has a component of variable bonus, which is linked to not just the individual performance, but also linked to organizational performance, which is paid out at the end of the year. So we encourage everybody to stay back so that they can have their fair share of earnings as well.

Okay. My second question is in general terms, when a customer is in our pipeline, how long does it take to convert that customer into sales? And what could be the possible reasons -- from the customers' end to delay the process?

Thanks for the question. This is Ashish Khanna. So the typical sales cycle in the enterprise softwares is a little longer now. So it's typically vary from 8 months to 1.5 years, 18 months. And it really depends upon the complexity and nature of the line of business they want to enable, right? So what typically we are seeing now is that the real reason for delay is that IT has become -- your technology has become so important that it become a point of discussion at a Board level, right? So it's not just limited to the CDO or CIO. Now the technology conversation and discussion is going up to the Board level. So there are a lot of iterations, a lot of conversation at that level also. So this is positive also, that's how we look at it, because it become a very strategic subject, how to enable and have that technology empowerment at all level. So at the organization, the financial institution can grow steadily and serve the masses. So to answer your question, typically, the cycles are longer now. And the real reason is primarily because the conversation goes up to the Board level now.

Okay. Sir, my last question is in one of the calls, you mentioned that you have very strong basis for selecting the customer. Sir, could you...

That's right.

Could you let us know what are those basis and why those bases are so important for you?

So I mean, typically, for any customer or any organization to select a customer, right, and vice versa, there are certain guidelines, parameters, governance framework, which are built up at an organization level. So I'll give you a very vague example, right? Anybody doing a business in financial space and if we are not very clear about the business model, we don't want to give our software for that particular institution or for that particular business, right? So clarity has to be there. So I think there is a robust framework for us to evaluate a specific prospect, right, including the governance, including the way the kind of a business they are doing, what's the regulatory view on that business. So keeping all these lenses enabled, we take a decision whether to continue with that particular prospect or not. So it's a robust framework at an org level, which we use to evaluate a particular prospect while considering that -- while investing our time and energy to onboard the customer.

Next question comes from Mr. Rahul Jain from Dolat Capital.

Yes. So firstly, just to begin with some bookkeeping question. Actually, I missed and as usual, the voice was pretty low when those numbers were shared by Tapan. So it would be great if you could give the order book data. I could not hear that at all and the top 5 contribution, which also was mentioned.

Order book.

Tapan, could you repeat the numbers please, and be little loud on...

So sir, which number I have to repeat?

Tapan, order booking number.

And top 5 revenue percentage. Top 5 customers revenue percentage.

I will take it.

So yes, Rahul, thanks for the question. So the order book, which is like pending as on today or at the end of the quarter I would say, is INR 600-plus crores. So that is the order book on which we are sitting. In terms of the revenue from the top 5 customers, it is around 27.5%.

Did you mean to say INR 600 crores was only for the product or this is the overall business?

This is overall. This includes product and services.

And this number, if I'm right, was INR 700 crores in the previous quarter.

Yes. I mean the way it happens is like we have an order book and then as the quarter goes, so you would have seen that we have exhausted almost like INR 228 crores in this quarter. So yes, I mean, that is how it has happened.

Right. And what would be the services part of this INR [ 6,000 ] crores or INR 600 crores?

So I would not be having the exact number, but roughly around 14% to 15% of our revenue comes from services. So this is an indicative. But yes, you can take a clue from there.

Right. Now there are a few observations in the current result. I think one important one was the mention of the 3 key imperatives for FY '26 around platform expansion, AI product innovation and global customer insight. So if you could double click on that, Parag or Vishnu ji, if anyone could take that.

Yes, if you could repeat the question -- what roughly...

Yes. So I'm just referring to our press release where we have said that wait for the FY '26, we would be unlocking our potential to 3 key imperatives, which were: platform expansion, power product innovation, global customer impact. So if you could throw more light on this aspect.

Okay. So in fact, we have our Engineering Head also, but I'll first give some prelim inputs. And if required, he can talk more about it. Essentially, you all know it's time of AI enabled now. So we -- I think, took our time to decide our AI strategy, but we are now clear in our -- both our products, whether it is retail lending, transaction banking, we now have a list of use cases, a long list of use cases, which we want to build. In fact, we have started building them with every release. Some use cases are getting rolled out. And that's what was meant by that portion of the release that. That's going to be the focus this year in addition to building our functionality and focus on robustness, AI enablement is going to be the focus in a nutshell.

Sure, sure. And just to understand your geographical dimensions of growth, what we saw is that India saw a good growth on a Q-o-Q basis. And you mentioned that there were 3 new logo wins. So some of these came in India geography and -- what part of the revenue are led by milestone hit? Or is it largely led by new logo win that has helped the growth in India?

So Rahul, this is Surya here. So, a, the new logos that we got is a combination. We got in India, we got outside India as well. So it's a combination. B, of the total revenue, the revenue which is related to milestone or, let's say, product and implementation would be in the range of 12% to 14% in this quarter. The rest is related to our services and the usual AMCs and ACS that you know.

Understood. And another geography that has been seeing some consistent improvement is Australia, and we used to talk about the large potential here a couple of years back. So any color you could share in terms of how this geography is shaping up? Is it coming from AMC repricing on the existing customer? Or there are most probably expansion or new [Technical Difficulty] in this region?

Yes. Thanks, Rahul. This is, Ashish. So definitely, we talked about Australia, we talked about North America. So all these geographies are very strategic and important for us. So Australia primarily getting strengthened from multiple lenses. We are working closely with some of the strong players there from -- one from more than a decade and one from almost 5 years now. And some others who we are in touch with to innovate in that geography. So a lot of traction is coming from that geography. And similarly for North America, the last 1.5 years, we were building -- we are doing a lot of -- you must have seen our LinkedIn and all, we were doing a lot of industry events. We are connecting with a lot of stakeholders there. So we are, again, getting good traction because we see the kind of an IP we have built, it has a strong potential to disrupt and to bring right value to the end customer in that geography. So both geographies are looking potentially important and strategic for us.

Right. So Ashish, if I got you right, you are saying the current growth in the Australian account would have come from our decade-old relationships. But yes, there is a large potential pipeline. And if you could clarify that part. And secondly, on the North America, we are participating more. So is there a strategy because it's a very, very large market in terms of number of unique customers, a lot of community banks, midsized bank. So is there an area that we have identified as our sweet spot in terms of the asset size or book size or any other cut that we are filling right now?

Yes. So Rahul, the first point on Australia, you are right. Your understanding is right that we have obviously 2 very happy customers and then we have a strong pipeline in Australia as a region. On the North America side, we do have a strong strategy, a very focused strategy on a very specific line of business with a clear focus on and a specific focus on the lending platform. So yes, I mean, that's what I can share at least at this stage. So we have a very specific focus approach for a line of business in North America as a region.

Actually I was more focused in trying to understand what within North America because, a, geographically a large market. There are a lot of 2,000 banks, which could be a potential customer for our product offering. So is it cut by geography or size of the bank or it's all over the place right now?

So Rahul, we -- as I mentioned, we are -- we have a very strong strategy about a very specific line of business and specific industry in that geography, right? I won't be able to share that specific right now. But we'll make a beginning wherever there is a strong possibility and opportunity, and we are seeing that traction already while we are engaging with some of the prospective customers. But you are right, it's a very, very vast and wide market, right? It's very complex also from every aspect, including regulatory. So we are very clear where we want to go as an organization with all our strength, which matches with that opportunity, which we foresee right now. So we do have a very strong strategy in place. But yes, time will tell because the government -- the geopolitical dynamics are such that it will be difficult for us to comment anything beyond this.

Yes. I appreciate that color. And just one more element if Vishnu ji could add on it because as you said, you've been around for a fairly long period of time. We have seen all these Indian vendors also trying big time, including names like Oracle, which is now a U.S. company, but we have seen very limited success by most of your competition, big and small alike. So is this right now at a marketing stage for us and it's like we are building for a long-term potential here? Or do you think it could be monetized on a 1- to 2-year basis as well? Any color on that will be great.

So Rahul, maybe I'll address it on behalf of the entire organization. So the experience really -- so the world we are into is very dynamic, right? As Parag also talked about the way AI is changing things, the way things are unfolding not just on the technology front, but also on the geopolitical front. So a lot of things are changing very dynamically and very fast nowadays, right? So past experience definitely help, right? But I think how do we see and prioritize our things as we go along and you're very fast in that process. So I think that is going to set the game for us. So that's all we can share at this stage. We are definitely leveraging our past experience. But at the same time, we are bringing a lot of change internally to be more agile, more focused and more stronger as an organization with all our strength in place. So that's what we can share at this stage.

Entire eye is on value delivery.

Yes. Maybe Abhishek, you want to add few more things.

Just to add to it. As an organization, our entire focus remains on the customer centricity and value that we can create for the prospect. And during this journey, of course, as you rightly mentioned, the world of -- this is the world of [indiscernible]. And we have to be extremely cautious. At the same time, we know our strength. And we also know during our journey to the prospect that how we can create value. We go step by step with the right fundamentals in place and hopefully expect this to get into the results.

Right. And just lastly from my side before I allow others to ask the question is on the employee cost. This has seen some downtick. Is it some kind of a provision reversal that would have happened or any other aspect that you could talk about and closing headcount on SG&A basis versus Y-o-Y...

So if I understood it right, you are talking about the employee count as well as the employee cost reduction that we are seeing, right? So in terms of employees, we have added employees in the last quarter. We are seeing opportunities. We are seeing space for the investment in our technology, and that is the reason we are adding employees. In terms of the reduced cost that you see, this is on account of the true-up or true-down of our various costs and provisions that we do towards the end of the year, primarily being on the employee side because for employee, what we have done at the beginning of the year, we have linked a part of the employees' compensation or variable pay, as Swati was also mentioning to the organizational performance. Towards the end of the year, on the basis of the actual performance that we have seen, there is a true-down that has happened in our employee cost. That is the reduction that you are seeing as part of the employee cost...

Right. And I think this is a comment which some other people also suggested in the past. Given that the kind of a stock movement that you observe in this cost trend, it would be better if we could give a clarity on this in the ensuing quarter so that we would know that this -- otherwise, if you look at the Q4 performance, it looks starkingly different than the previous quarters in terms of cost as well as growth. So growth, I can understand you can't time it, but cost because we know there is a good probability that it would get unutilized on the provision side, some clarity on that aspect could be a great help going forward.

Good recommendation. We have taken a note of it. We will look at it how we can handle this.

Generally, we have not observed this kind of a big delta. Maybe it depends upon the size of that provision versus the total cost. But this kind of acceleration, we don't see in any other companies.

Okay. We can move to the next participant.

Next question comes from Mr. Mihir Manohar from Carnelian Asset Management.

Congratulations on good set of numbers. Sir, I wanted to understand the operating profit that has gone up from INR 33 crores to INR 74 crores in the last quarter. So I mean this increase which has happened, I mean -- so how much portion is coming from the reversal? And how much portion is coming from license -- large license if you can quantify that, that will be really helpful.

Sorry, I think you have to repeat the question -- initial part of the question because I think we lose some connection in between. So sorry for that.

Sure. Sure, sir. Am I audible?

Yes. You are audible now. Go ahead.

Yes. Sure. So basically, the operating profit has gone up from INR 33 crores to INR 74 crores quarter-on-quarter basis. How much of it is coming from the provision reversal, which you just talked about? And second thing, I mean, how much is coming from the license part of the piece? Generally, what happens is that license directly flows to bottom line. So I wanted to understand these 2 things.

Yes. So on account of provision reversal, the benefit is of INR 8.5 crores. See, most of the growth in the operating profit that you see is because of the growth in revenue that has happened. So we being a product company, we don't see a proportionate rise in cost when we get our revenue up. So that is the reason you would have seen that most of the revenue increase that you are -- we have experienced in this quarter is hitting as part of the profitability. In terms of -- as I said, in terms of cost, INR 8.5 crores is on account of what I said. The remaining is the efficiency that we've been able to bring into the organization.

Understood, sure, sir. Sure. So of INR 229 crores of revenue, which is there, how much was license and this INR 229 crores and last quarter, INR 206 crores, how much was license over there?

So license revenue, including implementation, it counted together, contributes around 10% to 12% of our total revenue. So you can count around 10% to 12% is contributed by license. The remaining is on account of the other factors.

Sure. Understood. Sir, if you could just break up this INR 830 crores. I mean how much would be license, implementation, how much would be AMC, that would be really helpful, sir.

Yes. That kind of detail, I fear we don't share. I mean I have given you a rough breakup. But beyond that, it will be not possible for me to provide that breakup to you.

Okay. Sure, sir. Understood. The second thing I wanted to understand in Europe and Middle East. So basically Europe and Middle East, what are our top customers in that particular geography? I mean is it Tier 1? How to understand that?

We have -- if I talk about Middle East, primarily, we have top 7 out of top 10 customers, 10 banks with us. So Tier 1 banks, both Tier 1, Tier 2, they work with us. They leverage our enterprise software solutions to run their asset side of the business.

Sure. Understood. And Europe?

Europe, we have a limited presence as of now. So we have a specific set of customers who are using it. They are again, Tier 1, but not -- we don't have too many customers there as of now.

Understood, sir. Sir, my last question was on the AI investment, sir. If you can quantify what is the -- I mean, what amount -- how much amount are you spending on a per year basis? And what kind of products or what kind of solutions are we developing over here? Some use cases, if you can provide clarity, that would be really helpful, sir.

Surya, maybe if you can address.

As AI initiative is part of our product R&D and as mentioned in the start of the call, we are -- it comes as a strategic part of the initiative and being taken care like that. So it is not like a specific quota or sort of budget is there, but a large part of R&D that is there. Good part, we are investing into AI and our strategy is to bring as many as AI use cases into implementations in next couple of months -- next couple of months and quarters, year after. As mentioned by Parag sir, that we have already created a backlog. We have started burning it. Some of capabilities are already rolled out. Some are in the pipeline and going to come in the next quarter. So it is like that. So in a nutshell, there is a sharp -- very, very sharp focus on that. And so is the investment.

So additionally, just to kind of add one more point. So it's cutting across all the product lines. So it's like embedded in the day-to-day work of all the engineers. So it's not something we are building out of box and then bridging it across. So AI is now -- everything is getting reskilled to AI, and we are enabling AI across all the product lines urgently.

Sure. Understood. I mean what would be the total R&D spend for us, INR 60 crores?

Total R&D spend. So I mean, we don't define as such. Surya, maybe you want to take this.

I'm sorry, I think there was some disturbance in the background...

No. So see, R&D cost of the total cost that we incur, R&D cost would be approximately 15% to 18% of the total cost that we incur in a quarter.

Next question comes from [Mahak Singhvi] an individual investor.

My question is, are we using transaction-based pricing for our products? Or is it user based?

So we are using both. I mean we are using transaction-based pricing as well as user-based pricing. So I think is [Technical Difficulty] Can you hear us?

No.

Am I audible now?

Yes. Yes.

So yes, I'm saying just to answer your question, our pricing model consists of both transaction-based as well as user-based pricing. And there are other variants of this model. So yes, it is a mix of some 2, 3 models which are prevalent in the industry.

Okay. And with AI adoption, you don't think that we will go fully based on transaction-based model?

So again, as I mentioned, our AI capability is going to cut across all the product lines. So it's going to add another layer of value to our customers and customers and customers, right? So I mean, we don't see that we are going to work on a very specific kind of a commercial model for AI. It is going to cut across and then it could be, again, a variant of mix. It could be transaction, it could be some license-based pricing. It could be a mix of things.

And since AI part of the AI use cases is expected to enhance product capability for a given domain. So in that case, AI-assisted capability will, of course, add the pricing tier, pricing quotient of it. So in a way, what you expect, the answer is, yes.

Okay. And I have another question. Price revision is being negotiated with how many clients? I need the number.

So we don't -- generally, as a practice, we don't give very specific numbers. But as we mentioned in our last quarterly investor call, we have done pricing rebaselining for most of our customers, right? So I think that exercise is already done by now. So anything further if you want, I can support you with.

The next question comes from Pratap Maliwal from Mount Infra Finance.

Am I audible?

Yes. You are.

Just wanted a clarification. You said that Q4, we got some milestone-based revenues. I think you pointed out the quantum of the milestone-based revenues as well, 12% to 14% of our revenues this quarter. Is that correct?

12% to 14%. Yes.

So ex of the milestone revenue, so our revenue would have been somewhere around in the INR 200 crores?

Yes, approximately that number. Correct.

Okay. And milestone-based revenue, this is a onetime thing or this is kind of something that happens every Q4, every year? Is that -- is it of that nature?

This is a continuous flow. This is a continuous flow. We get long-term projects. Milestone basis is basically on the percentage of the project, which has been completed in a year or in a quarter and therefore, what is the revenue related to that. So it is not onetime in nature, it is something which is a continuous flow.

Okay. So it can happen on a quarterly basis going forward as well, any quarter?

Yes.

Okay. And just on your employee cost, as you said that we had some provision pulldowns regarding the variable pay. So can you just help me understand what would be our normalized kind of employee cost level going forward?

So I mean, see, the reversal that you see in our numbers is to the tune of around INR 8.5 crores. So ex that, whatever number that you see is the DAU number for us.

Okay. So then it comes to about INR 130 crores. That's still, I think, a INR 7 crore reduction from the previous quarter, and you said that we are adding employees. So just wanted a clarification on that part.

Yes, there were some other provisions also which were like additional provisions. So I would say the provisions were made in excess of what this would have been actually incurred. And that is one true-up that we did towards the end of the quarter as well. So the reduction that you see, the one related to the variable pay is something, which obviously is onetime. The remaining is something which is kind of bringing the cost in line with reality.

The next question comes from Mr. Rahul Singh from Aide Search Business Solutions LLP.

I had a question about this cash and cash equivalent balance sheet. So we can see the buyback or a special dividend in the near future? Sir, am I audible?

Yes. You are audible.

Yes. What was plan with the cash and cash equivalents on the balance sheet? So we can see any buybacks or special dividends in the near future? We can see that?

So buyback is something which we are not thinking now. I mean we are not thinking for both buyback and special dividend, at least in this quarter. I mean we had our Board meeting. So we haven't discussed any of these 2 at least in this meeting. I mean in future, what we do is something which will decide.

Sir, I have one question. Did we lose any customer this quarter? Sir, did we lose any customer this quarter, latest?

Yes. I mean as we talked about the dynamic nature of things which are changing and the way things are unwrapping, so at least -- so in the last quarter or maybe 5, 6 months, we have lost 2 customers. Yes. we have lost 2 customers.

[Operator Instructions] We have a question from Vinay Nadkarni from Hathway Investments Private Limited.

Just wanted to -- because this quarter has been a really amazing quarter. Just wanted a clarification on the efficiencies that have come in. You have said that your employee cost of around INR 8-odd crores has been reduced, but the reduction is almost INR 15-odd crores from last quarter to this quarter. So I assume that the balance is on account of efficiencies. Now what kind of efficiency could you attribute them to reduce your employee cost?

Okay. So in my response -- Surya here, in my response to the previous question actually I mentioned that what has happened is like we were making provisions related to some kind of employee distribution that we do. That is something which we have kind of trued up towards the end of the quarter or at the end of the year. So it is not like -- I mean, obviously, there are efficiencies that we are driving in the form that we are able to extract almost like 11% more revenue without kind of increasing our headcount much. So in that respect, we are driving efficiency. However, when you see rupee to rupee drop in the cost, it is primarily on account of true up or true down of the revenue, the main being one that you spoke about related to the employee cost. And then there are some others also where we were carrying some provision, which we have kind of trued to the actual cost that we see we will be incurring.

So would it be right to say that going forward, say, around INR 122 crores would be a rough cut quarterly employee cost?

Okay. I mean, obviously, I don't want to get into a position of being predicting or talking about a number, which is related to quarter 1 number. But having said that, please remember, we spoke that we are in the spree of investing in our people as well as our employees. So therefore, on the factor of that, they could change. So I mean, I'm giving you probably a vague answer, but yes, these are factors. I cannot give you the exact numbers. That is the issue.

I appreciate. The only other last question is, when I look at your revenues, they were consistently around INR 205 crores. And suddenly, this quarter, it has gone up to INR 229 crores, and that is primarily because of new business, I presume, that you would have got. Anything that you can share with us on what made this jump come from INR 206 crores to INR 229 crores quarter-to-quarter?

Yes. So see, it is a combination of many factors which has came into play and that makes us happy about this quarter because, a, the revenue has been spread across different customers as well as across different line of businesses that we operate, okay? So the addition in revenue, obviously, as you spoke, has came from addition of new business from new customers, but even more importantly, the trust that has been shown by our existing customers and they have given additional business, which we have kind of delivered and therefore, converted into revenue in this quarter. And then the last one is the efficiency that we were able to bring in, in the sense that in the last quarter, the entire organization joined the hands together that delivered the project to the customers in the most efficient manner because of which we were able to deliver the right quality in the right time, which helped us to bring in more revenue as well. So it's a combination of all these factors which played their role to bring the revenue up.

Yes. And lastly -- there's one question, can I ask?

Yes, yes, please.

You said you lost around 2 customers in the last 6 months. How many new logos have we added in the last quarter and last half year maybe?

Yes. So in the last 2 quarters, we have added 4 logos.

There are no further questions. I will pass it over to Mr. Vishnu for his closing comments.

Hello. I take this opportunity to thank you all for your sustained interest in Nucleus Software. And I would like to reiterate, on behalf of all my colleagues, our commitment to continue delivering value to all our stakeholders. Thank you very much.

Thank you, sir. That concludes our conference for today. Thank you for your participating. You may all disconnect now.