Buy Nesco, target price Rs 800: ICICI Direct

ICICI Direct has hold call on Nesco with a target price of Rs 800. The current market price of Nesco Ltd. is Rs 620.35.

Nesco, incorporated in the year 1946, is a Mid Cap company (having a market cap of Rs 4359.36 Crore) operating in Real Estate sector.

Nesco key Products/Revenue Segments include Rentals & Service Charges, Machinery & Spare (Traded), Sale of services and Fees & Other Charges for the year ending 31-Mar-2022.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 158.50 Crore, up 42.99 % from last quarter Total Income of Rs 110.85 Crore and up 75.01 % from last year same quarter Total Income of Rs 90.57 Crore. Company has reported net profit after tax of Rs 81.90 Crore in latest quarter.

The company’s top management includes Mr.Sumant J Patel, Mr.Krishna S Patel, Mrs.Sudha S Patel, Mr.Mahendra K Chouhan, Mr.Jai S Diwanji, Mr.K S Srinivasa Murty, Mr.Manu M Parpia, Mrs.Amrita Verma Chowdhury. Company has Manubhai & Shah LLP as its auditors. As on 30-09-2022, the company has a total of 7 Crore shares outstanding.

Investment Rationale
The brokerage likes steady & planned expansion across verticals funded largely through internal accruals and niche profitable business model including foods/own events etc. Post a washout 2.5years for the exhibition business, we expect H2FY23 to witness full recovery to pre-Covid levels in the exhibition business. The IT Park business is also expected to be boosted as occupancies have improved and further improvement over next couple of quarters. The stock has a BUY on the stock with an SoTP target price of Rs 800/share.

Promoter/FII Holdings
Promoters held 68.54 per cent stake in the company as of 30-Sep-2022, while FIIs owned 1.98 per cent, DIIs 4.3 per cent.