Please refer to important disclosures at the end of this report
NESCO Limited is engaged in activities, including information technology (IT)
park, exhibition and convention centre, manufacture of machinery, equipment
and capital goods, and investments. NESCO has started construction of IT
building 4, having a built up area of approx. 17 lakh sq. ft. (Leasable 12 Lakh
sq. ft.) which is going on in full swing. IT buildings 1 and 2 can be rebuilt based
on new relaxed FSA norms and IT building 3 is yet to be seen in financial
performance. The company is now going ahead to set up a new world class
Exhibition & Convention Centre and have engaged services of an international
architect, in first phase of 15 lakh sq. ft. will be constructed in coming years. The
company recently started cafeterias in Bombay Exhibition Centre and NESCO IT
Park and is receiving good response from clients and is expected to generate
significant revenue and profits. The Company is taking steps to establish a large
world class kitchen of 24,000 sq. ft. which will help to produce 15,000 meals per
day. To add to this the business works on negative working capital and also with
low maintenance cost it has helped the segment generate sizeable free cash flow
every year. The management stated that the cost of expansion of IT park,
Bombay Exhibition Centre and NESCO Hospitality was about `1500cr which will
be met by companys own resources without any borrowings and company is
expected to remain debt free. The management expects that the asset heavy
annuity rental business piggy backing on niche exhibition business, having
negative working capital, makes it a better play in the realty space. The company
has reported a healthy profit growth of 18% CAGR and return on equity of 21%
for the last 5 years. Hence Buy.
CMP `2,659
Reuters Code
BSE Sensex
Face Value (`)
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Others | Miscellaneous
May 30, 2017
NESCO | Miscellaneous
May 30, 2017
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Disclosure of Interest Statement NESCO
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)