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Nirmal Bang
Nesco (Buy)
Target: ₹769
CMP: ₹553.25
We recently had an interaction with Dipesh Singhania, CFO of Nesco Ltd to discuss the current outlook for various segments and the future plans for the business.
Key takeaways from the meet:
The company has not agreed to any rental waiver or concessions for its IT Park tenants. However, it has extended credit periods to its existing tenants and extended fit out periods for its new tenants. The company has agreed to an extended credit period of 3-4 months for rent payments of Q1-FY21 for some tenants. Earlier, the payments were made by the tenants within 10 days of the end of month. However, for the 3 months of Q1-FY21, the company will be receiving rents in a staggered manner.
The management highlighted that in the initial months of the lockd-down, the tenants faced issues with regards to supply of labour and materials to complete their fit outs. The tenants were able to commence their fit out work in July 2020.
The management highlighted that WeWork internationally is currently facing issues with regards to keeping up the occupancy at its properties. This issue also persists in some small cities in India and even at some of its properties in Mumbai.
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