Nesco


(abhimakk) #367

I believe the actual increase in revenues will kick in starting Q2 2018 when the new building is ready, this quarter there were less bookings resulting in average results.

Construction work for IT building no. 4 admeasuring
about 17 |akh sq. ft. is in full swing, and is expected to be completed by 30 April 2018. The
MEP and facade works have now commenced.


(hamed) #368

Bombay Exhibition Centre revenue were less QOQ and YOY as well. Not sure why ? less bookings? But stock is technically holding up beautifully. One company where you are assured of revenue is this one; and yes Q2 2019 with new IT park will re-baseline the revenue to higher level.


(Venkatesh) #369


(barathmukhi) #370

Too premature to say but drop in exhibition center performance is probably related to the restrictions imposed on nesco by traffic police…

Disclosure: Invested from lower levels


(Sunil) #371

Then can we expect this trend further? Or once the metro starts business should be as usual?


(barathmukhi) #372

The next few quarters should give an insight into how exhibition revenues get impacted by this development.


(barathmukhi) #373

Nesco_Limited_Postal_Ballot_Notice_2018.pdf (464.6 KB)
Some changes to the company’s articles of association


(Shiv Kumar) #374

latest investor presentation on nesco uploaded on the BSE website has
update on development plans for the complex.

here’s the slide

shiv kumar

nesco-plot1.pdf (326 KB)


(Mridul) #375

Hi @vivek_mashrani

Thanks for the excel. Couple of points which we may need to take into account for more accuracy of the model.

  1. Building 1/2 is planned to be demolished and rebuilt. Current revenue contribution ins’t much (close to 35 cr). Has management guided about the construction costs and prospective revenues from these two buildings once rebuilt? Timelines? I do not see much information on this. Also, we need to adjust the model based on these revenues going offline for a couple of years before new buildings come online. The logic behind doing this is obvious (correct me if i am wrong) i.e. better buildings with more floor space on the lines of Building 3 and 4. Currently Building 1 and 2 are occupying large ground coverage but contributing very little to the revenue. In comparison, look at building 3/4…smaller ground coverage but contributing much more meaningfully. What will be the game plan for Building 1 and 2 occupants? Will they be shifted to Building 4? Also, where are the funds for redevelopment going to come from? They have not mentioned this in the original capex plan of 1500 cr. Just said this would be done.

  2. While new exhibition center will be constructed, what will happen to the revenues from the existing exhibition center? Basically the existing buildings of BEC will have to be demolished as per the two maps (old/new) enclosed in the recent presentation. For instance, BEC Hall 1 is where IT Building 5 is proposed. Whereas, the whole BEC and hospitality wing will be on the left hand side of the map. I am not sure how they will manage to do it on an ongoing basis. New BEC is coming at the same place where the existing BEC sits. So won’t it result in a revenue hit? I read somewhere that mgmt denied revenue hit but i seriously doubt.

  3. Other income - Mgmt has said that internal accruals will be used for capex. With the proposed 1500 cr for building 4, BEC and hospitality wing, their investments of close to 450-500 cr will be utilized in the new construction. Moreover, any new cash generated in next 3-4 years will be utilized in capex. So other income will reduce drastically in next 5 years. Other income last year was close to 42 cr. So, we need to adjust the model accordingly.

  4. Do we have any clarity on Reliance center’s business model? Will the market expand or will the incumbent get hurt?

  5. Q3FY18 revenue from BEC has lowered quite a bit, while those from IT has improved. Reg BEC, mgmt said some macros. Will traffic woes and related orders count as macros? Or there is something else which escapes the eyes? Don’t think it is seasonality as Dec has usually been the best qtr in last few years. Also, why has IT revenue increased? Probably renegotiated some leases?

Disclaimer: Exited Nesco in Q1 FY18. Started tracking again and would buy it back at some point.