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.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

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

<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.


<ul>
<li>IT Park occupancy has been steadily rising over the past few quarters. Q4FY22 IT Park revenue grew 3.3% QoQ.</li>
<li>Bombay Exhibition Center (BEC) business is on track to normalize as COVID restrictions have been removed completely.</li>
<li>With the BEC business normalizing, Nesco Foods business is also ripe to scale up.</li>
</ul>


IT Park occupancy has been steadily rising over the past few quarters. Q4FY22 IT Park revenue grew 3.3% QoQ.
Bombay Exhibition Center (BEC) business is on track to normalize as COVID restrictions have been removed completely.
With the BEC business normalizing, Nesco Foods business is also ripe to scale up.


Nesco: IT Park Occupancy Continues to Improve; BEC Recovery on Track

<ul>
<li>Nesco reported decent Q3FY22 earnings led by improvement in occupancy in the IT Park business as well pick up in the exhibition business. </li>
<li>With environment normalizing, exhibitions are likely to resume which should help Bombay Exhibition Center (BEC) revenues to come back.</li>
<li>The indabrator business also reported strong revenue growth of 30%+ QoQ and 55%+ YoY.</li>
</ul>


Nesco reported decent Q3FY22 earnings led by improvement in occupancy in the IT Park business as well pick up in the exhibition business. 
With environment normalizing, exhibitions are likely to resume which should help Bombay Exhibition Center (BEC) revenues to come back.
The indabrator business also reported strong revenue growth of 30%+ QoQ and 55%+ YoY.


Nesco: IT Park Sees Improved Occupancy; BEC Recovery In Sight

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: 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: 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

Nesco: IT Park Occupancy Continues to Improve; BEC Recovery on Track

Nesco's business is normalizing with opening up of the economy post COVID. IT Park occupancy has been on the steady rise. BEC revenues are on track...

Ankit Agrawal, CFA

Nesco: IT Park Sees Improved Occupancy; BEC Recovery In Sight

Given limited to no COVID constraints now, the exhibition business is on track for recovery over the next 1-2Y and should help the stock to re-rate.

Ankit Agrawal, CFA

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