Nesco Limited: Sky is the Limit

NESCO Ltd. is a diversified Indian company headquartered in Mumbai. The company is primarily engaged in the business of real estate, exhibition centre operations, and IT services.

Stock Data
Ticker	NESCO
Exchange	NSE
Industry	DIVERSIFIED

Price Performance
Last 5 Days	-0.97%
YTD	-12.46%
Last 12 Months	-8.14%

*As of 13.04.2023

Growth Prospects:

NESCO Ltd. has several growth opportunities in its core businesses. The real estate segment is expected to grow due to the increasing demand for office space in Mumbai. The company has plans to develop a new IT park in the western suburbs of Mumbai, which will provide further growth opportunities.

In the exhibition centre operations segment, the company has plans to expand the Bombay Exhibition Center by adding new halls and improving the infrastructure. The expansion is expected to increase the centre’s capacity and attract more trade shows and exhibitions.

In the IT services segment, the company is focusing on expanding its client base and offering new services such as cybersecurity and digital transformation. The increasing adoption of digital technologies in various industries provides a significant growth opportunity for the company.

Key Strengths:

• Diversified business portfolio: NESCO Ltd. has a diversified business portfolio, including real estate, exhibition centre operations, and IT services. This diversification reduces the company’s dependence on any one business segment and provides a stable revenue stream.

• Strong market position: The company has a strong market position in the real estate and exhibition centre operations segments. The Nesco IT Park and the Bombay Exhibition Center are well-established facilities that attract leading companies and trade shows, respectively.

• Strong financial performance: NESCO Ltd. has demonstrated consistent financial performance over the years, with revenue and net profit growing at a steady pace. This reflects the company’s strong business model and efficient operations.

• Focus on innovation: The company has a strong focus on innovation, both in terms of its business operations and the services it offers. This focus enables the company to stay ahead of the competition and meet the changing needs of its customers.

• Experienced management team: The company’s management team has extensive experience in their respective fields, providing strong leadership and strategic direction to the company.

• Strong customer relationships: NESCO Ltd. has built strong relationships with its customers in all business segments, which has helped the company retain existing clients and attract new ones. This customer-centric approach has contributed to the company’s growth and success.

Key Opportunities:

• Expansion of the IT Park Business: NESCO Ltd. had decided to expand the IT Park business to cater to the growing demand for office space in Mumbai. This will provide additional revenue streams and attract more leading companies to the park.
  
  Currently, the firm is in the approval stage for a commercial skyscraper with 2.6 million square feet of leasable space and 350 rooms of four-star accommodation. By H1FY24, building on the project is anticipated to start, and it will likely take 4.5 years to complete.

• Expansion of the Bombay Exhibition Center: NESCO Ltd. has decided to expand the Bombay Exhibition Center by adding new halls and improving the infrastructure. This will increase the centre’s capacity and attract more trade shows and exhibitions, providing additional revenue streams.
  
  For a capex of between 125 and 130 crore (about 10 months would be needed for completion), the business plans to demolish one of the industrial sheds and extend it for the BEC (hall 6 with 450 vehicle spaces in the basement), adding 1.5 lakh square feet of additional net leasable space. It is  anticipated that this extra capacity will start bringing in revenues in FY25. 

• Hospitality plans (NESCO Foods): The firm has constructed a 25,000 square foot kitchen that can produce 40,000 meals due to the high demand for food and beverage items caused by the exposition and the presence of IT park personnel. The same is required for every show in BEC, creating a significant potential.
  
  The business has currently constructed four restaurants, of which two are open for business, and a food court. With more people visiting exhibits and fairs, income is expected to grow. The business has launched a) outdoors catering services for weddings, business parties, and conferences. Over the next three to four years, the firm aims to generate annual revenues of ₹ 100 crore with the goal of becoming a centre for social gatherings. 

• Focus on digital transformation: NESCO Ltd. can focus on offering digital transformation services to its clients in the IT services segment. This will help the company stay ahead of the competition and meet the changing needs of its clients.

• Expansion into new markets: NESCO Ltd. can expand its business operations into new markets, both in India and overseas. This will provide the company with new growth opportunities and increase its market position.

• Acquisition of complementary businesses: NESCO Ltd. can acquire complementary businesses in its core segments to further diversify its business portfolio and increase its market share. This will also provide the company with new capabilities and expertise.