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.