Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>As projected, Nesco's BEC business has completely normalized and clocked INR 45cr+ revenues in Q4FY23. With this, Nesco clocked FY23 PAT of INR 290cr+, well above our INR 250cr+ estimate.</li>
<li>Alongside the BEC business, Nesco's foods business has also seen significant recovery led by footfalls from the BEC. Independent of BEC also, Nesco Foods is growing significantly on its own.</li>
<li>Nesco is on track to earn PAT of INR 320cr+ for FY24, suggesting that at the current market cap of INR 4250cr, it is valued attractively at 13x P/E.</li>
</ul>


As projected, Nesco's BEC business has completely normalized and clocked INR 45cr+ revenues in Q4FY23. With this, Nesco clocked FY23 PAT of INR 290cr+, well above our INR 250cr+ estimate.
Alongside the BEC business, Nesco's foods business has also seen significant recovery led by footfalls from the BEC. Independent of BEC also, Nesco Foods is growing significantly on its own.
Nesco is on track to earn PAT of INR 320cr+ for FY24, suggesting that at the current market cap of INR 4250cr, it is valued attractively at 13x P/E.


Nesco: BEC Business Is Now Beyond Pre-COVID Level | Foods Business Is Expanding Into New Horizons

<ul>
<li>BEC revenues continue to match the pre-COVID level suggesting that the business has now normalized fully post-COVID. COVID led shift in working habits has had no structural impact.</li>
<li>IT Office Leasing revenues grew 6%+ QoQ, led by the improvement in occupancy rates. Profitability also improved led by operating efficiencies. </li>
<li>BEC's EBIT margin came in significantly lower than expected due to one-off expense of INR 15cr for demolition of a factory shed to build a new exhibition hall.</li>
</ul>


BEC revenues continue to match the pre-COVID level suggesting that the business has now normalized fully post-COVID. COVID led shift in working habits has had no structural impact.
IT Office Leasing revenues grew 6%+ QoQ, led by the improvement in occupancy rates. Profitability also improved led by operating efficiencies. 
BEC's EBIT margin came in significantly lower than expected due to one-off expense of INR 15cr for demolition of a factory shed to build a new exhibition hall.


Nesco: Business Is Now As Usual Similar to Pre-COVID Level

External broker reports(aggregated public sources), ICICI Securities Ltd

ICICI Securities Limited

External broker reports(aggregated public sources)

ICICI Securities Ltd

ICICI Securities Limited provides investment services. The Company provides corporate and investment banking, securities, wealth management, retail brokerage, initial public offerings, and advisory services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Nesco Ltd (Nesco) is in the business of development and management of commercial / IT-ITES Real Estate, Exhibition centre and foods business.</li><li>It manages two commercial with leasable area of 1.75 msf (mn sq ft) and BEC spread over 0.6 msf.</li><li>As part of its future plans, the company has outlined a capex plan of ~Rs 2400 crore to (i) build ~2.6 msf sq leasable area commercial Tower along with a 350 keys 4-star Hotel and ii) refurbish and expand the BEC.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Nesco Ltd (Nesco) is in the business of development and management of commercial / IT-ITES Real Estate, Exhibition centre and foods business.It manages two commercial with leasable area of 1.75 msf (mn sq ft) and BEC spread over 0.6 msf.As part of its future plans, the company has outlined a capex plan of ~Rs 2400 crore to (i) build ~2.6 msf sq leasable area commercial Tower along with a 350 keys 4-star Hotel and ii) refurbish and expand the BEC.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nesco Ltd (Nesco) - Exhibition Business Finally Gets Going! …

Nesco Ltd (Nesco) - Exhibition Business Finally Gets Going!

<ul>
<li>Bombay Exhibition Center (BEC) business has recovered sooner than expected and is now back to pre-COVID level with INR 50cr+ revenues in Q2FY23.</li>
<li>Demand for exhibitions could grow structurally post-COVID, suggesting that the BEC business is now likely to be even stronger than pre-COVID.</li>
<li>Office Leasing (IT Parks) business showed QoQ growth suggesting that the occupancy level showed marginal improvement.</li>
</ul>


Bombay Exhibition Center (BEC) business has recovered sooner than expected and is now back to pre-COVID level with INR 50cr+ revenues in Q2FY23.
Demand for exhibitions could grow structurally post-COVID, suggesting that the BEC business is now likely to be even stronger than pre-COVID.
Office Leasing (IT Parks) business showed QoQ growth suggesting that the occupancy level showed marginal improvement.


Nesco: BEC Business Is Back to Pre-COVID Level

India

Nesco Ltd. is a diversified company involved in manufacturing and engineering products for railways and forging,  realty development, and runs an exhibition center.

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Nesco Ltd (NSE IN)

Nesco: BEC Business Is Now Beyond Pre-COVID Level | Foods Business Is Expanding Into New Horizons

An investment in Nesco has potential to more than double over the next couple of years. BEC business is now doing better than the pre-COVID level....

Ankit Agrawal, CFA

Nesco: Business Is Now As Usual Similar to Pre-COVID Level

Nesco is an attractive post-COVID normalization play and presents an attractive IRR of 50%+ by the end of FY24. There seems to have been no...

Ankit Agrawal, CFA

Nesco Ltd (Nesco) - Exhibition Business Finally Gets Going! …

Nesco Ltd (Nesco) is in the business of development and management of commercial / IT-ITES Real Estate, Exhibition centre and foods business. It...

ICICI Securities Limited

Nesco Ltd (Nesco) - Exhibition Business Finally Gets Going!

Nesco Ltd (Nesco) is in the business of development and management of commercial / IT-ITES Real Estate, Exhibition centre and foods business.

ICICI Securities Limited

Nesco: BEC Business Is Back to Pre-COVID Level

With the BEC business normalizing, Nesco is on track to post FY24 PAT of INR 250cr+ from its core operations. Our estimates suggest that at the...

Ankit Agrawal, CFA

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