@harsh.beria93 Could you help me with working capital days ?.
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AR23 notes
- 82% of Tower 03 (vs 80% in FY22) and 97% of Tower 04 (vs 92% in FY22) are occupied
- Completed upgrading of the landscaping Tower 03 for 3.87 cr.
- Renters: HSBC, KPMG, PWC, MSCI, BlackRock, Here Solutions, Framestore, Priceline, WeWork, Apollo Global, etc.
- Had 83 guest exhibitions (vs 12 in FY22) and 10 guest events in BEC (from July 2022 to March 2023)
- Exhibition Center income was 149.76 cr. (vs 16.18 cr. in FY22)
- Events: 10 events were held (5 by Nesco and 5 in strategic alliance with clients). Income from events was 6.07 cr.
- Exhibitions and Banquets section of Nesco Foods did revenues of 36.96 cr. (vs 11.35 cr. in FY22). They catered to 55 social events and 90 corporate events at various Halls located at Nesco premises and 70 events at IT Towers
- Restaurants and Outlets: 11.67 cr. Inaugurated 3 restaurants a) Foo, b) Smoke House Deli, c) Socials and a Food Court in Tower 04 of Nesco IT Park (6.66 cr. investment). Also launched two new in-house brands Dress Circle and Zuo
- Company’s liquid resources (fixed maturity plans, mutual funds, cash and bank balances) increased by 37.74% **to 1178.79 cr. (**vs 855.79 cr. in FY22)
- Expansion plans
o IT Park: Completed designing & finalization of plans for new Tower 02 which will be in place of legacy IT building 02 and adjoining areas. The designs are made by Singapore Based Architects – Aedas and the total development size will be about 4.6 million sq. ft. Costs will be spread over 5-years (same as last year)
o Bombay Exhibition Center had completed the designing and finalization of plans for the new Hall 06 (in place of legacy IT Building 01 or Hall 08). The net hall area will be approx. 1,50,000 sq. ft. and will have separate pre-function areas, organizer office, parking for approx. 500 cars, etc. The estimated cost is around 125 cr., with outflow spread across a year and civil work expected to start shortly after approvals from various Governmental Authorities. - Indabrator division: Sale of abrasives has shown consistent uptrend, started 3rd shift to achieve installed capacity of 6000 MT/annum. Commissioned high value Blast Cleaning Systems at Railway workshop, Liluah and Plate Preservation Line at Hooghly Cochin Shipyard. Appointed agents in Export region for sale of abrasives and machines. Will be taking big orders in FY24. Looking to outsource job work for casting and production like motors and pumps parts. Will focus on customized heavy fabrication work. Will spend 4 cr. for upgradation
- CSR spends: 4.41 cr. (vs 4.97 cr. in FY22)
- Auditor remuneration: 35.34 lakhs (vs 31.27 lakhs in FY22)
- Employees: 261 (excluding KMP) vs 118 in FY22, managerial remuneration increased by 61.02% (vs 34.75% reduction in FY22), for other employees remuneration increased by 9.5% (vs 2.74% in FY22)
- Shareholders: 37’631 (vs 36’630 in FY22), price (low): 501.1, price (high): 677.3
Here are the relevant business statistics since FY13.
| FY13 | FY14 | FY15 | FY16 | FY17 | FY18 | FY19 | FY20 | FY21 | FY22 | FY23 | FY19-23 growth | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Total Revenues | 162.74 | 181.42 | 223.07 | 297.08 | 357.20 | 358.00 | 392.60 | 474.28 | 355.70 | 382.41 | 609.26 | 11.61% |
| IT Park | 27.86 | 47.83 | 90.67 | 124.40 | 141.91 | 145.40 | 137.00 | 214.17 | 246.06 | 264.15 | 295.03 | 21.14% |
| Exhibition centre | 90.52 | 94.89 | 85.86 | 111.83 | 132.77 | 129.70 | 156.00 | 158.60 | 5.95 | 16.18 | 155.83 | -0.03% |
| Hospitality services | 5.60 | 20.40 | 34.10 | 35.68 | 13.00 | 11.35 | 48.63 | 9.28% | ||||
| Indabrator | 25.08 | 18.39 | 17.91 | 27.93 | 33.89 | 26.40 | 32.50 | 23.27 | 26.09 | 45.71 | 46.52 | 9.38% |
| Investments | 19.28 | 20.31 | 28.62 | 32.90 | 42.98 | 36.10 | 33.00 | 42.55 | 64.60 | 45.01 | 63.26 | 17.67% |
| KMP remuneration (cr.) | 3.60 | 3.75 | 5.11 | 6.06 | 7.06 | 7.58 | 8.02 | 21.49 | 13.54 | 9.06 | 8.97 | |
| Audit fees (lakhs) | 7.85 | 9.55 | 11.01 | 11.50 | 15.60 | 19.85 | 21.69 | 21.68 | 21.76 | 31.27 | 35.34 | |
| Employees | 121.00 | 135.00 | 166.00 | 131.00 | 159.00 | 155.00 | 130.00 | 118.00 | 261.00 |
Disclosure: Invested (position size here, no transactions in last-30 days)
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new Tower 02 which will be in place of legacy IT building 02 and adjoining areas. the total development size will be about 4.6 million sq. ft.
considering this is Gona come up in existing legacy building how much income is generated from legacy building how much square feet is it?
completed the designing and finalization of plans for the new Hall 06 (in place of legacy IT Building 01 or Hall 08) how much revenue is generated currently from it (hall 8 and the legacy building)?
how much free space is available there now for future buildings?
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Legacy IT building 2 is not generating any revenues. It was leased out to TCS which left long back so there will not be cannibalisation of any existing revenues.
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Legacy building 1 is also not generating any revenue currently.
Total land area is 65 acres. Future development potential and free ares have been mentioned in earlier investor presentations.
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Legacy IT Building 1 is a small structure which was originally leased out to TCS. Building is rather dilapidated and needs to be demolished. IT Building 2 is also quie old. There will be around ten per cent reduction in revenue after the two buildings are demolished. But part of it will be covered in incremental increases from existing business. Post-construction of the new buildings, both top and bottom line will see a huge jump.
In the past when NESCO’s IT Buildings 3 and 4 under construction we experienced this. But the jump can be huge after a gap of three four years. The new tower will be constructed in two parts, So one should see a big jump by 2026-7 when the first part of the construction is completed.
NESCO, as a stock, is meant only for the patient investor!
dis: holding in long-term portfolio
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please look into this why has the ED went to nescos office
3 rd paragraph 2nd line
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That is where the KPMG office is located, that my reading.
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26 July 2023
BSE Limited National Stock Exchange of India Limited
Department of Corporate Services 5th Floor, Exchange Plaza,
25th Floor, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex,
Dalal Street, Bandra (East),
Mumbai - 400 001. Mumbai - 400 051.
Ref : 505355 Ref : NESCO
Sub: Intimation pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015
Dear Sir / Madam,
Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
and Public Notice published in the newspapers, Business Standard and Mumbai Lakshadweep dated 26 July
2023, we hereby inform you that, State Environment Impact Assessment Authority of Maharashtra, has
accorded Environmental Clearance to our Company for our proposed expansion and development of
Exhibition cum Convention Centre at Plot. No 223A/1A, 223/1, 225, 239A, 240, 241, 241/1 to 6, 242B,
243A and 248A, Goregaon (East), Mumbai - 400063.
This is for your information and records.
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Completed annual analysis of Nesco from AR numbers. Good and stable growth.
- There is some variability in the industrial segment. Op. profits in last 5 years have ranged from -3.5 million to 36 and to 19 this year. Wish this was a little more predictable.
- Stable margins: EBITDA at 68%, PBT at 60%
- No increase in dividends despite strong growth in PBT from 226 cr to 366 cr. Wish this was reviewed.
- % Op Assets financed by Float at stable 17% (Refer to prof. Bakshi’s original article on the co)
- decent growth in BV/share at 16%. In the long run, price should catch up with increases in BV.
- promoter salary flat at 8.7 cr.
All in all, stable and reliable growth - the kind of thing one expects from owning Nesco. It would have been nice if there were some fresh growth drivers though.
One confusion:
Current investments in FY22 BS as per FY22 AR: Rs. 196.9 cr
Current investments in FY22 as per FY23 AR: Rs. 525 cr.
Perhaps someone can throw light on this.
Disclosure: Invested
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Some ground info based on my current job with an AV-IT company:
InfoComm India is a major exhibition in the Audio-Visual solution space that happens every year. In 2022, it was hosted in NESCO BEC. Source
In 2023, it will be hosted in Jio Convention Center. Source
It appears that for large exhibitions (high value), Jio Conevntion Center is a competitor to NESCO BEC and may take away some market share. The BEC revenue should be closely monitored for stagnation or de-growth as it contributes ~30% of revenue.
Since IT building segment is a steady 6-7% growth business (till new IT buildings come in), any re-rating in valuations from here would require BEC revenues to grow and not stagnate/de-grow.
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It is also possible that both players will benefit because overall exhibition market will expand, especially due to strong economic growth in India over the next several years, and improved infra and flight connectivity of Mumbai.
The Indian event and exhibition market size is expected to grow from USD 4.75 billion in 2023 to USD 8.71 billion by 2028, at a CAGR of 12.90% during the forecast period (2023-2028).
Nesco’s exhibition revenues in FY23: Rs. 1496 M or $ 18M
Reliance’s Hospitality and Entertainment division generated revenues of ₹1,323 crore (US$170 million) (exhibition revenues would only be a part of this, as they also have many hotels).
(Source: Google Bard).
We should compare these revenues to the above market size potential.
Discl.: Invested
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Nesco has shown strong and consistent business performance across various key indicators. Here are the key financial highlights:
For the First Half (H1) of FY '24:
- Total revenue reached Rs. 358.82 crores, marking a 33% increase from the same period in the previous year when it was Rs. 269.35 crores.
- The total profit after tax amounted to Rs. 163.87 crores, which is a 21% increase from the previous year’s figure of Rs. 135.60 crores.
- The IT Park division’s revenue was Rs. 156.33 crores, up from Rs. 145.05 crores in the corresponding previous period.
- The Bombay Exhibition Center division achieved revenue of Rs. 87.00 crores, a 24.43% increase from the previous year’s figure of Rs. 69.92 crores.
- The Foods division demonstrated substantial growth, generating revenue of Rs. 43.74 crores, a remarkable increase of 207.59% compared to the corresponding previous period.
- The Indabrator division saw revenue of Rs. 24.38 crores, marking a 45.64% increase from the corresponding previous period.
For the Second Quarter (Q2) of FY '24:
- The company reported a revenue of Rs. 197.62 crores for the quarter, which represents a 24.68% increase from the same quarter of the previous year when it was Rs. 158.50 crores.
- The profit after tax for the quarter reached Rs. 87.80 crores, compared to Rs. 81.90 crores in the corresponding quarter of the previous year.
- The IT Park division’s revenue was Rs. 83.24 crores, up from Rs. 73.06 crores in the corresponding quarter of the previous year.
- The Bombay Exhibition Center division earned revenue of Rs. 57.25 crores, compared to Rs. 53.07 crores in the corresponding quarter of the previous year.
- The Foods division and Indabrator division generated revenues of Rs. 21.74 crores and Rs. 12.62 crores, respectively.
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Good numbers rewarded with a fresh break out and into unchartered territory. Chart shows that smart investors seems to have started accumulating from May 2023 near 515 levels.
AJ
Disclosure: Bought into NESCO after results. Views are biased.
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NESCO is like a tortoise that gets a dose of steroids every time an IT building is completed and then overtakes the hare in front. But the second generation is making the tortoise move steadily thanks to the exhibition, events and the food businesses. The next IT building/convention centre/hotel to be completed after 5-6 years will be like a shot of viagra. I feel in 10-12 years’ time, the entire complex would be completely built up and NESCO will be a dividend yield story.
disclosure: have been accumulating for more than a decade and biased.
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If I calculated correctly, based on these numbers, not only has BEC revenue gone up YoY, but Avg Rs/sqft/month has jumped from Rs. 277 to Rs. 322 YoY.
That’s strong pricing power, and no sign of any market share loss that was expressed as a concern here earlier.
Discl.: Invested
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The total market is expanding which could give runway for both premises. That being said Nesco’s BEC got some modernization to do in order to make their premise more appealing.
Mumbai Comic Con used to happen in BEC, moved to Jio World Center since 2023.
Disc: Invested. Exited 50% during current rally.
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Hi was going through the company financials and wanted input from members who are more closely following the company -
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Are tower 1 and 2 currently completely unusable?
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Has CAPEX of Tower 2 or BEC Hall 6 started?
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In Q2 the revenue for BEC has grown marginally however profits have fallen sharply. Why has this happened? I’m not able to figure out why the expenses should have risen significantly for this vertical?
guess new rules on sez would have positive impact on this counter. any expert opinion?