NESCO LTD INCORPORATED ON 15TH APRIL 1946

THE CHAIRMAN OF NESCO LTD-

S. J. PATEL

The company is one of the oldest in India .The company is famously known for the Exhibition centre & IT park building.Its a small company listed on NSE AND BSE.

High promoter holding of 68% approx.

The company have Business units:

Bombay Convention & Exhibition centre
Realty division (namely IT Park building)
Indabrator
Nesco foods
Investments

The major portion revenue comes from the exhibition centre and the realty division.The company is cash rich with liquid resources of 658 cr .The growth of the company is pretty good over the past decade ; which is reflected the share price of the company.The company is debt free

The information on Business unit

Bombay exhibition centre:

The exhibition centre is spread across 6 exhibition halls,

Having a present area of approx. of 620000 sq ft .Planning to build more halls in future years (approx. 10 lacs sq ft).The company have ventured into new business Nesco events and Nesco exhibition in order to increase occupancy in the exhibition halls.The location of the exhibition centre provide a unique moat to the business i.e. Being in close proximity from the Airport.The entry on new exhibition halls in mumbai can affect the profitability of the business.

IT PARK BUILDING :

The company has a bunch of IT building.IT Building 1 & 2 have an approx. 3 lacs sq ft leasable area ;IT Building 3 have an approx. 660000 lacs sq ft area leasable area (incurred cost of approx. 113crs).IT Building 4 was completed in FY 18-19 costing approx. 570 crs;Having a leasable area of 12 lacs sq ft which is already 75% occupied. The company is planning to expand the IT building 2, planning to build 40 lacs sq ft area in coming year.

3.NESCO FOODS

The company build a huge kitchen which serves approx. 20000 meals per day on the days of exhibitions to the visitors;its a good diversification for the business.

4.Investment income

Company invest the surplus funds in debt and liquid funds for a period of time; which is used later for expansion plans

THE INFORMATION IS FOR THE YEAR ENDED FY2020

THE INDABRATOR WAS NOT PROFITABLE IN THE CURRENT YEAR

VALUATION:

THE company has total leasable area of approx. 21.6 lacs sq ft area if we consider the price of one sq ft as rupees 12000 (being conservative otherwise the price bands is of approx(20000 to 16000 sq ft))(INFORMATION AVAILABLE ON MAGIC BRICKS AND 99 ACRES PROVIDED PICS AT THE END) ;that translate into approx. rupees 2592 cr.It has a rental income of rupees 177 crs (the IT building 4 is 75% occupied rest yet to be rented).

The current COVID-19 situation may affect the business in short term but the long term prospectus of the business is still intacted has the lease agreement with company are for long term.

Plus with growing GDP of the country and increasing number of business and entry of foriegn business in India compared with availability of land mass in such important part of the country that is Mumbai ; its difficult to break its moat.

The exhibition centre business is in stress for short term but in long term it will survive as well as thrive because growing economy .

Company have given the exhibition centre halls to COVID-19 ISOLATION CENTRE TO BMC.

The company have good liquidy position of approx. 658 cr .Company also dont have any debt on the books.All the expansion plan are planned to be done from internal accruals.

The company is regular dividend paying company even though is less in comparison of the profit.The most important thing is this company is good hedge against Inflation because of the value of land and will increase in long term

The free cash flow for the year ended FY 20 is 209crs. The landbank 70 acres of land it self is worth atleast 3000 crs and much more.