Some of these are low-margin businesses, and NESCO has no experience operating. If it is only food and rest stations, then I think Nesco is better placed. I guess they will sublease other facilities.
However, even in terms of revenue, let’s say that, in FY-28, they can do 550 (lower side) with 30 crores of lease costs. Current revenue is 700 crores. So this is a meaningful addition, and they have zero debt and 1500 crores of current investments. There is also the possibility of more such deals.
Priced at 18.6 PE, this is reasonable for good growth prospects in an otherwise expensive market.
Disclosure: First looked at it last month. Now thinking to look at it indepth
Is there a way to figure the economics of this business, their scope of work etc? If anyone knows companies who have run such lounges, please do share.
Lease cost for most such retail operations are low double digit % of sales, v/s Nesco is going to pay ~5% points so I would expect ~10-15% margins at least.
Wayside amenities is a low margin business with major revenue contribution from fuel stations. Roe depends heavily on traffic. As these are new highways so traffic build up takes time and NHAI has given estimates in tender documents . With NHAI estimates roe is not high ( less than 12-13%) . Nesco has very high margin and profitable business of BEC and IT towers, need to understand this diversification.
Disclosure : invested
Nesco Limited Plans Massive IT Park & Hotel in Mumbai!
Mumbai, 29 March 2025 – Nesco Limited, known for its business in real estate and other sectors, is set to build a new landmark in Mumbai! The company has received approval from the Brihanmumbai Municipal Corporation (BMC) to construct Tower 2 at Nesco Center in Goregaon (East).
What’s Coming?
A Huge IT Park
Spread across 1.65 million sqft, this high-tech office space will be designed for top companies.
It will have modern workspaces, eco-friendly design, and top-notch amenities.
Expected to create 24,500 jobs!
India’s Largest Hotel?
A grand hotel with 732 rooms & suites, plus 172 serviced apartments.
Perfect for business travelers visiting the IT Park or Bombay Exhibition Center.
Which brand will they tie up with for Hotels and Serviced Apartments? Seven hundred fifty rooms is huge. Even at 6500 ARR and 70% occupancy, they can do -100 crores annually easily.
Concern is project timetable and when we get to see revenues.
good observation but hotel business will have huge running cost staff and other stuff my guess is they are building 5 million square feet for probably maximum 5000 per square feet which is 2500 crores a reasonable rate of return should be 15 to 20% which will be about 500 crores in profits
Generally, the construction cost for a 5-star hotel room in India can range from ₹ one crore to ₹ two crore per room. So let’s put it at 1200-1300 crores at the top of the line. But since it also includes 4 star rooms it will come to 1000 crores max.
So, ya, reasonable return even at ballpark low estimates I have chosen. Also, keep in mind that 6500 ARR is easy. Brands like Fern and Ginger are doing 10k in Goregaon, and Taj & Marriott do 15k ARR easily.
Why earnings from BEC is down? Was it partially closed?
Also the impact from bec though major but is not the only one… Expenses, other income etc also impacted. Is it all because of new constructions?
Trying to figure out the same, results from other segments look stable if not promising. BEC’s huge drop needs to be stemming from some material external impact.
One thought regarding the BEC division. Any estimate of the impact of Jio Convention center on their revenues? I see that the more premium exhibitions, conventions and trade fairs are now held at Jio Convention Center which is obviously swankier and more upmarket. So, I’m sure it has had a substantial impact on the revenues and margins, both present and future. Not sure how much has/would be the impact.
Yes, Precisely. It indicates that they have utilised only 15-20% of the available capacity, and over the years, they have the potential to grow sixfold under the current FSI norms, along with rental growth driven by inflation.
Even Nesco is upgrading its BEC halls with larger, column-free spaces and premium facilities to cater to high-end exhibitions. For a major city like Mumbai, options remain limited even after the launch of Jio World Centre.
A Huge IT Park 
India’s Largest Hotel? 
