Nesco


(hazariwalapu) #121

Dear Shivkumar,

Very good update on AGM. As they have mentioned they have good order book for indabrator, as u can see their turnover of this division has increased in Q1Fy16 and they turn into profit. As if going forward if they increase their turn over of this division to 10Crs per qtr it will show significant jump in profit for this division and it is a very good positive.

Thanks

Prashant


(Shiv Kumar) #122

i guess so. management was bullish on indabrator. sumant patel kept insisting that indabrator was a good brand and enjoyed a good reputation in the market. he again reiterated that the company was looking at expanding this company and hence would not monetize the 20 acres of land it owns in Gujarat.

However Indabrator will only be the icing on the cake. Real estate is what counts for Nesco.


(Venkatesh) #123

Guys just read the IndiaNivesh update on company post meeting management. Here are some tit-bits

Excavation work for IT Building 4 is expected to commence in Q2FY16 with approvals in place. The total capital expenditure of Rs3bn over FY16-18E is planned. In FY15 the company invested Rs990mn and bought additional FSI of ~0.63 mn sq. ft. With this addition the total built]up area for IT Building 4 will be 1.76 mn sq. ft. The company also has
ambitious plans for IT Building1 & 2 but waits for the change of Development Plan for taking advantage of additional FSI for IT/ITES sector.

In FY15, the segments delivered 10% y/y revenue de-growth and contributed 38.5% to the overall revenue. The segment witnessed decrease in revenue in FY15 due to few cancellations and underutilization of space. However, BEC has witnessed a CAGR growth of ~28% in the past ten years on back of its location advantage [~0.45 mn sq. ft. of space combined with attractive offering]. As a result, BEC has been able to increase its monthly rental to Rs 159/per sq. ft (FY15) from Rs. 27/per sq. ft (in FY06).

With increasing utilization, Nesco initiated the process to expand the halls area from 0.45 mnsqft to 1.00 mnsqft However, management would wait for new development plan (DP), which will increase the FSI to 4 (v/s existing FSI of 2). In that case, the company will be able to make 1.5 mn sq. ft. of Exhibition Area (v/s 1.00 mn sq. ft. planned). The capex requirement of this project should be in the range of Rs 5.5-6.0 bn over next five years. However, this
assumption is completely based on the government approvals.

Indabrator(Capital Goods Division) is leading manufacturer, supplier and exporter of surface preparation equipment’s, providing services to various Indian industries; mainly Foundries, Forging plants, Automotive industries, Indian railways, Defence organizations, Heavy engineering industries, Ship building industries, Chemical & petrochemical industries etc. Although since past two years Indabrator was generating loss on account of economic slowdown. In Q1FY16, segment reported 141% y/y growth in revenues (to Rs 73 mn) & PBIT margin were 11% of segment revenue at Rs 8 mn (v/s loss of Rs3.2 mn in Q1FY15). The management expects 20% y/y revenue growth for industrial division in FY16.

Disclosure: Invested


(Shiv Kumar) #124

can you share the india nivesh report? my id is
journoshiv at gmail dot com


(Venkatesh) #125

Please the following link http://www.indianivesh.in/Downloads/635798102875790000_NiveshDaily_-_5_October_2015.pdf


(Venkatesh) #126

Strong 2Q. Sales +39% YoY, PAT + 41% YoY. This is on account of 100% occupancy level for IT Building 3 & rent free period expiry.

Disclosure: Invested


(Aman Goklani) #127

Smacking Q2 results! Half year performance has been decent too. Sales growth has been solid so far this year. Even the industrial segment is doing well.

Promoter holding is also up. Looking good overall.

Disc: Invested


(Shiv Kumar) #128

hereon upside will come only from the exhibition business till IT building 4 is completed. I don't have much expectation from the Indabrator business. when earnings are flattish there will be a lot of opportunities to buy. this happened when IT Building 3 was under construction.


(Sunil) #129

Hi,

I was going thru 2013-2014 annual report

In cash flow statement the increase in trade payable is 40.76Cr, however in balance sheet there is hardly any change in trade payable. Can someone please explain how is this accounted or I am missing anything here



(Sunil) #130

Can some one please help me clarify above?


(Amit Mantri) #131

Trade payables under Current Liabilities has stayed flat. However, Other long term liabilities under Non-current liabilities has increased. Some of the trade payables are probably long-term and hence got classified seperately under non-current. The increase/decrease in trade payables in the cash flow statement includes both the current and non-current payables which explains the difference. Also note that the cash flow statement does not have a change in provisions line item. So you should assume that all of these line items have been clubbed together in the trade payables line item.


(Shiv Kumar) #132

NESCO collects security deposits from tenants who lease their IT buildings. Most of the leases are for three year periods. The trade payables COULD BE the deposits.

Similarly deposits are collected from exhibitors as well. But these are paid back days after the exhibition concludes.

I am only guessing on the item in the accounts. I haven't verified with management.


(Venkatesh) #133

Decent results. 15% YoY PAT growth. Disclosures have increased. Company now disclosing Bombay Exhibition Centre and IT Park numbers separately on quarterly basis. Company should do Rs100/share EPS for full year.


(sandeep17) #134

With the new CIDCO centre almost ready and the Reliance centre progressing well, I think its time for NESCO to acknowledge these as serious threats and provide an update on the same. Anyone has any further insights on these new exhibition centres and how soon will they start hurting NESCO?


(Shiv Kumar) #135

Good results. The company has cash reserves of more than Rs 400 crore which will be deployed in constructing further buildings - IT buildings and exhibition centres. Exhibition Centre is still operating on Negative working capital.


(Venkatesh) #136

Very decent results

Stock trades at 16.6x FY16 so is not expensive

400crs cash after investing Rs143crs in IT building 4. The next trigger is this building coming online.


(Abhishek) #137

I thing I could not understand from the segment results is how it is possible to have more than 100% EBITDA margins in the exhibition business? Does anyone have an answer?

Regards,

Abhishek.

Disc. Invested.


(Kranthi Kumar) #138

FY16 AR is out.

http://nescolimited.tcmail15.in/tr/r/2/394031/174387/cGtyYW50aGlrdW1hckBnbWFpbC5jb20%3D/2/W10%3D

Below is the extract of management discussion and analysis.

i) Nesco IT Park:
Income for the year was 12,046.02 lakhs (previous year 9,067.36 lakhs), an increase of
32.85%.
Your Company has started construction of IT building 4, having built up area of approx. 17,00,000
sq. ft. The building is pre-certified Platinum rated under the LEED India for Core & Shell rating
system from the Indian Green Building Council. IT buildings 1, 2 and 3 are fully occupied by well
renowned companies. Hall 3 provides Incubation Centre and Child Care Centre for children of employees working in Nesco IT Park.

ii) Bombay Exhibition Centre:
Income for the year was 11,183.36 lakhs compared to 8,586.27 lakhs in the previous year, an
increase of 30.25%.
During the year 156 exhibitions and conventions were held in our Centre, out of which 33 were new
organizers. Some of the new clients include Infinity Exhibitions & Conferences Pvt. Ltd., JP Morgan
Services India Pvt. Ltd., V-Rock Entertainment Agency, Dalit Indian Chambers of Commerce &
Industry (DICCI), New Media Communication Pvt. Ltd. and Artisians & Weavers Welfare Association.
The Maritime Exhibition organized by Ministry of Shipping held in April 2016 in Bombay Exhibition
Centre was inaugurated by Indian Prime Minister Mr. Narendra Modi when Chief Ministers of
Maharashtra, Gujarat, other states and several foreign and national dignitaries were present. This
exhibition has attracted large investments.
Our Centre continues to bring large number of visitors and tourists from out of City, State and
Country.
iii) Nesco Hospitality Private Limited:
Nesco Hospitality Private Limited, wholly owned subsidiary of your Company, has earned revenue
of 222.75 lakhs as compared to 6.10 lakhs during the previous period.
The Company has started food court services within our Nesco Complex with leading international
and national food brands and is targeting to cater the growing demand of quality food services
from the exhibition organizers, exhibitors, visitors and employees working in Nesco IT Park. Your
Company is taking steps to establish a large world class kitchen, construction is expected to start
in later part of this year.
iv) Indabrator:
In the year under review, Indabrator income was 2,501.74 lakhs (previous year 1,790.92
lakhs), an increase of 39.69%
2015-16 showed some progress in the capital goods industry. A number of projects which were
deferred in the previous year were completed in the current year. Your Company has recently won
several large contracts. Company has decided to expand its machine building division at its Visholi
Complex, Gujarat, construction for which is expected to start in Q4 of this year.
v) Investments:
Income from investments and other income was 1,605.27 lakhs (previous year 2,827.33 lakhs).
5. Finance:
Your Company had no debt as on 31 March 2016. Company’s liquid resources (fixed maturity plans,
mutual funds, cash & bank balances) increased by 6.59% to 41,439.01 lakhs from 38,878.07
lakhs.
Your Company has neither accepted any deposits from the public during the year nor are any
deposits outstanding for repayment.

Disclosure: invested


(Kranthi Kumar) #139

Given that the IT building 3 is fully occupied, I see a flat or little growth for some time until the next leg of growth kicks in which include,

Completion of IT building 4
Ramping up in hospitality business
Expansion of exbition business.


(Abhishek) #140

Dear Kranthi,

Thats not entirely true. NESCO has been able to increase per sq ft rentals in the exhibition business almost every year in the past decade. Similarly rental rates in IT park building 1 2 and 3 should increase. To that extent the revenues and profitability of NESCO should increase even until the time NESCO building 4 comes into play.