IndiaNivesh research

Nesco (Buy)

CMP: Rs 786.85

Target: Rs 1,046

Nesco reported good set of top-line and bottom-line numbers. The reported top-line numbers were at Rs 43.51 crore, ahead of our expectations of Rs 41.04 crore. The current top-line numbers reflect 26.8 per cent y-o-y and 15.5 per cent sequential increase. Strong 38.5 per cent increase in Exhibitions and IT Park segment (90.4 per cent of Q3FY13 revenues) lead to the top-line growth.

At the CMP, Nesco is trading at FY13E and FY14E, P/E multiple of 11.6x and 7.6x, respectively. After adjusting for the value of liquid investments of Rs 170/ share, the adjusted FY14E P/E stands at 5.9x thereby the stock looks to be highly attractive at current valuations.

With IT Building Phase-III getting operational in Q4FY13E and growth prospects of Exhibitions industry to be in mid-teens, the growth prospects of Nesco look promising. As of now we are not changing our FY13E and FY14E estimates, despite Q3 numbers ahead of our expectations.

(This article was published on February 7, 2013)
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