Index investing does have its merits, and it is becoming hard for managers to beat indices, particularly in the large cap space, but there are times when index returns lag active funds’ returns, they don’t outperform every single period. For large cap, it is almost true, except for intermediate terms. And when they fall, they will fall they will be in a free fall, as there is no intervention, there is no damage control.

And, we have equal weighted indices too, which have their own advantages. One can choose these so as to not tie the returns to a handful of stocks. Rebalancing is also done relatively late.

And by active investors, if you mean direct equity investors, there are all kinds of investors. Some may not beat the indices, some can beat but the effort is not worth the alpha, and some will beat consistently as individual stocks possess the quality of becoming multibaggers. And retail participants have started to build their own systems and models, these while come with bigger drawdowns also have the potential to deliver returns that are beyond the scope of indices.

Index investing does suit people who value their time more than the return, who have time on their side, who can sit through underperformance without comparing their return with active funds, who believe in the growth of the overall market, not just some pockets etc.

Most of the people in my society use milk basket, bb daily, fresh to home. Very few go out in the cold mornings for milk. (I’m in Bangalore and global warming missed us).

Yesterday I bought an item at 250 in kirana store. The same was available at 235 in swiggy instamart. Now Flipkart is also joined this quick commerce race. Kirana shop may not do delivery in 10 minutes. They have resource crunch. But blinkit, zepto, swiggy insta all do guaranteed delivery in 10 to 20 minutes even if it’s raining.

When the management itself is indicating that the next quarter will also be lean, we should look for better opportunities.

Poor Performance Continues in Nucleus Software
Hopefully recovers soon

Con-call Highlights –

Nucleus Software Q1 FY 2024-25 Earnings Call Key Takeaways

Financial Performance:

• Consolidated revenue: Rs. 195.4 crore
• Consolidated EBIDTA: Rs. 28.8 crore
• Consolidated PAT: Rs. 30.2 crore
• Consolidated EPS: Rs. 11.3
• Standalone revenue: Rs. 181.7 crore
• Standalone PAT: Rs. 31.2 crore
• Standalone EPS: Rs. 11.6
• Order book: Rs. 813.4 crore
• Cash and cash equivalent as of June 30, 2024: Rs. 920.8 crore

Operational Performance:

• Added 62 employees during the quarter
• Revenue mix: 58% domestic, 42% international
• No customer losses due to repricing initiatives
• Repricing progress slower than anticipated
• New customer acquisition yielded no revenue in the last quarter
• Long lead times for new implementations due to pricing complexity

Future Outlook:

• Management expressed confidence in bouncing back financially in coming quarters – Continued focus on product licensing and cloud-based services
• Plans to onboard sales leaders in different regions

Concerns:

• Decline in topline and bottom line performance
• Stagnant revenue growth
• Repricing initiative facing challenges

Other Important Points:

• Long-term focus over short-term fluctuations
• Committed to retaining top industry talent
• Exploring dividend payout and buyback options
• New product developments include an Islamic version of FinnOne Neo for the Middle East and Malaysia