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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Regulatory Disclosure: 
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>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

<ul>
<li>Nesco's Bombay Exhibition Center (BEC) business where revenues declined to almost negligible during the last couple of years due to COVID, is now recovering as COVID restrictions have receded.</li>
<li>During Q1FY23, BEC business did INR 16.8cr in revenues (annualized INR 65cr+) and is on track to normalize to pre-COVID levels of INR 150cr+.</li>
<li>Nesco's IT Park business continues to remain strong with 90%+ occupancy in Tower 4 and 80% occupancy in Tower 3.</li>
</ul>


Nesco's Bombay Exhibition Center (BEC) business where revenues declined to almost negligible during the last couple of years due to COVID, is now recovering as COVID restrictions have receded.
During Q1FY23, BEC business did INR 16.8cr in revenues (annualized INR 65cr+) and is on track to normalize to pre-COVID levels of INR 150cr+.
Nesco's IT Park business continues to remain strong with 90%+ occupancy in Tower 4 and 80% occupancy in Tower 3.


India

Binny Ltd. manufactures and markets a wide range of textile products. The Company's products include cotton, silk, man-made fibre, blended fabrics, and woollen blended fabrics like cotswool. The Company also manufactures Angola for Defence Services and provides travel services as well as markets engineering products.

J. Kumar Infraprojects Limited operates as a civil engineering and infrastructure development company. The Company focuses on the development of roads, flyovers, bridges, railway buildings, sports complexes and airport runways. J. Kumar also undertakes foundation work using hydraulic piling for major projects.

Transport Corporation of India Limited provides integrated cargo transportation and logistics services. The Company provides handling of heavy-duty cargo through surface movement, door-to-door distribution for time committed cargo, and coastal shipping. The Company moves a variety of products, including raw materials, industrial products, pharmaceuticals, and agricultural products.

Man Infraconstruction Limited is a construction company. The Company's services include port infrastructure, residential, industrial, and commercial construction services.

Technocraft Industries India Ltd. manufactures construction equipment and apparel.  The Company produces drum closures, pipe, scaffolding, fence panels, yarns, and men's T-shirts.

Ashoka Buildcon Ltd. is a construction company. The Company builds and operates roads and bridges in India on a build, operate and transfer (BOT) basis. Ashoka also engineers and designs, procures the raw materials and equipment for and constructs roads, bridges, commercial buildings, industrial buildings and institutional buildings, and collects tolls on roads and bridges.

Kennametal India Ltd. manufactures hard metal and hard metal products, including tungsten carbide products.  The Company also manufactures mining tools, special purpose machines and accessories, and jigs and fixtures.

Sterlite Technologies Limited, created via a spin-off of the telecom business of Sterlite Industries, provides optical fiber, cable and jelly filled telecom cable products.

Allcargo Logistics Limited is a full service logistics company. The Company offers specialized logistics services across multimodal transport operations, container freight station operations and project and engineering solutions.

Ion Exchange (India) Ltd manufactures and distributes water treatment equipment and products, which are used for a variety of treatment and conservation applications.  The Group's products include water treatment chemicals, exchange resins, ultra filtration and nano-filtration membranes. Ion also supplies bottled water, eco-friendly horticulture and total water management services.

Ningbo Fuda Co., Ltd. manufactures vacuum cleaners, vapor exhaust fans, and other small home appliances.  The Company also produces and sells cement, invests in the real estate, and supplies tap water and electricity.

Kinh Bac City Development Share Holding Corporation operates in the construction and development 
industry. The Company constructs and trades in infrastructure of urban, commercial, and industrial 
areas. Kinh Bac also invests in real estate and manages the maintenance of infrastructure and 
construction of properties.

Kinh Bac City Development Share Holding (KBC VN)

Hainan Expressway Co., Ltd. constructs and maintains expressways in Hainan Province.  The Company also trades a variety of general merchandise, provides passenger and cargo transportation service, and invests in real estate business.

Everbright Jiabao Co., Ltd. is an investment holding company.  Through its subsidiaries, the Company manufactures capacitors, electricity generators, and light bulb products, operates in commercial trading, as well as develops residential real estate.

Metro Land Corp Ltd operates department stores. Through its subsidiaries,  the Company also operates in import/export and property leasing businesses.

CityChamp Dartong Co., Ltd. manufactures and sells a wide range of wire products, including enameled wires and aluminum strand wires.

Shanghai Ya Tong Co., Ltd., through its subsidiaries, provides inland water and coastal transportation for freight and passengers.  The Company also provides taxi and advertising services as well as operates agricultural businesses.

HCK Capital Group Berhad is an investment holding company. The Company, through its subsidiaries designs and constructs plant equipment for food manufacturing and related industrial products, HCK also provides engineering consultancy, project management, and related maintenance.

Ecofirst Consolidated Berhad is an investment holding company.  The company, through its subsidiaries, cultivates oil palm, provides agricultural advisory service and operates timber concessions. Ecofirst Consolidated also develops and invests in properties.

Magna Prima Berhad, through its subsidiaries, provides services in civil engineering, infrastructures, building works, rock crushing, earthworks, and drainage works.  The Company subcontracts quarrying operations and renders professional turnkey services.  Magna Prima also operates in property development and building construction.

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: 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

Nesco: BEC Business Is Now Recovering

Nesco provides an interesting investment opportunity to play the post-COVID normalization theme. At current valuation, it offers 70%+ upside over...

Ankit Agrawal, CFA

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