October 30, 2006 | Press Release

INDIA, New Delhi, October 30, 2006 -- Nucleus Software Exports Limited (NSE: NUCLEUS), a leading global provider of next generation software products for banking and financial sector, today announced its Q2 results. Nucleus Software's consolidated revenue for the quarter ending 30th September 2006 increased by 54.22% to Rs.55.09 crore as compared to Rs.35.72 crore for the corresponding quarter of the previous year. Net Profit after Tax (PAT) increased by 57.86% to Rs 13.86 crore as compared to Rs. 8.78 crore for the corresponding quarter of the previous year. For the half year ending September 30, 2006, consolidated revenue has increased by 52.93% to Rs. 104.85 crore as compared to Rs. 68.56 crore for the corresponding half-year period in the previous year. Net Profit after tax (PAT) increased by 57.03% to Rs. 27.26 crore as compared to Rs. 17.36 crore for the corresponding half-year period in the previous year.

Major Highlights:

Quarter ended 30th September 2006

- Consolidated revenue from software products and software services increased by 54.22% as compared to corresponding quarter of the previous year.

- Net Profit after Tax (PAT) increased by 57.86% as compared to corresponding quarter of the previous year.

- Earning Per Share for the quarter increased to Rs 8.60 from Rs. 5.45 for the corresponding quarter of the previous year.

Half Year ended 30th September 2006

- Consolidated revenue from software products and software services increased by 52.93 % as compared to corresponding half-year of the previous year.

- Net Profit after Tax (PAT) increased by 57.03% as compared to corresponding half year of the previous year.

- Earning Per Share for the half year increased to Rs 16.92 from Rs 10.79 for the corresponding half year of the previous year

Other Key Information

- Dataquest recently recognized Nucleus Software among the Top 20 Employers in the IT industry – DQ-IDC Survey 2006

- Nucleus Software added 10 more customers this quarter taking the total number to 134.

- 6 new product orders of US$ 6.25 million booked

- Total headcount at the end of the quarter is 1397.

- Consolidated leadership in Africa and the Middle East regions with multiple product orders

Commenting on the Company’s results, Vishnu R Dusad, Managing Director, Nucleus Software Exports Limited said “We are immensely proud of our performance this quarter. Our healthy results showcase our long standing commitment of being a trusted & leading player in the area of banking and financial services. Our robust organic growth with large wins in alternate markets such as Africa and the Middle East has further strengthened our position in a competitive environment.”

Business Expansion:

– FinnOneTM lending today covering almost 70% of the incremental Retail Business in India is being adopted by leading global financial institutions for their retail banking solutions too.

– Nucleus Software will be providing technology solutions for 10 new customers added during the quarter.

- Nucleus Software reiterated its position for providing world-class products with 6 orders for its Products.

- Nucleus Software, during the quarter, also consolidated its leadership position with significant wins in Africa and the Middle East regions

- Nucleus Software concluded this quarter with a multi-country order win with one of the most prominent international Bank, to implement Nucleus cash@will product.

New Client Orders:
During the quarter, the group added 10 new clients to its current portfolio, taking the total number to 134.

Nucleus reinforced its leadership position in the retail banking space with a significant order win one of the largest retail banks in UAE. Other product wins include orders from a leading bank in Africa and two client acquisitions in the Middle East region in the lending and loan management solution space. Nucleus has also made fresh inroad in the SAARC region with two client wins, for Nucleus Software’s flagship product, FinnOneTM.

“We are witnessing an increased demand for our loan management and collections solutions by various financial institutions across the world. Being a specialist provider in these solutions, we are in a position to leverage our rich experience and deliver consistent customer experience and in turn scale up operations”, added Mr. Dusad.

Growth Strategy:
Our overall strategy will be to aggressively target unconventional markets like Middle East, SAARC, South East Asia and Africa to not only consolidate our relationship, but also penetrate deeper into these markets. Banks in these markets are revamping their technology infrastructure rapidly, and Nucleus is strongly positioned to help them revamp their operations to be at par with global conglomerates. Our broad objective this financial year is to position ourselves to meet future challenges and at the same time address our customer needs.

Primary objective in coming fiscal:
Nucleus Software will focus and strive to gain increase in market share in retail banking markets and lending business globally along with continued focus on alternate markets by introducing newer technologies with a view to providing the best experience to their customers.