Nesco Limited: history, ownership, mission, how it works & makes money

A Brief History of Nesco Limited

Nesco Limited, incorporated in 1946, has evolved into a multifaceted industrial entity over the decades. The company initially operated in the engineering sector, focusing on manufacturing and machine tools. It became a prominent player with a strategic shift towards event management and real estate development.

In the early 2000s, Nesco diversified its portfolio, venturing into the exhibition and event spaces with Nesco IT Park and the Bombay Exhibition Centre (BEC). The BEC, established in 1991, rapidly became one of India’s premier venues for international exhibitions and trade shows.

As of the financial year ending March 2023, Nesco Limited reported a total revenue of ₹552.75 crores, showing a year-on-year increase of approximately 12%. The company's net profit for the same period stood at ₹138.67 crores, yielding a profit margin of around 25%.

Nesco's market capitalization as of October 2023 was valued at ₹5,200 crores. The company’s stock has seen significant growth over the past few years, with a price-to-earnings (P/E) ratio of 37.5, indicative of investor confidence in its growth potential.

Through strategic investments, Nesco has positioned itself as a leader in the real estate and event management sectors. The construction of the Nesco IT Park, completed in 2017, encompasses over 1.1 million square feet of premium office space, bolstering its revenue streams by attracting notable tenants from the tech industry.

Nesco's business model continues to thrive, driven by its robust infrastructure and commitment to enhancing customer experiences. The company’s diverse operations not only provide stability but also a competitive edge in the rapidly evolving market landscape.

In line with its growth strategy, Nesco has increased its investments in technology and innovation, particularly within its event management sector. The integration of digital solutions has improved operational efficiency, while also enriching customer engagement during events.

Furthermore, the company aims to expand its footprint internationally, leveraging its expertise in the exhibition industry. As per recent disclosures, Nesco plans to allocate approximately ₹200 crores towards further development projects within the next fiscal year.

Overall, Nesco Limited’s journey reflects its ability to adapt and innovate, leading to solid financial performance and a promising outlook for future growth.

A Who Owns Nesco Limited

Nesco Limited is a publicly traded company in India, listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The ownership structure of Nesco Limited is a mix of institutional investors, foreign investors, and retail shareholders. The latest data indicates a market capitalization of approximately INR 3,400 crore as of October 2023.

The major shareholders of Nesco Limited include the following:

The company is controlled primarily by the promoter group, which includes the Kirloskar family, notably involved in various industrial sectors in India. This concentrated ownership allows for significant influence over corporate governance and strategic direction.

As per the latest filing for Q2 FY 2023-2024, Nesco Ltd reported revenues of INR 190 crore, showcasing a growth of 12% year-on-year. The net profit stood at INR 50 crore, marking an increase of 15% compared to the previous fiscal year.

Further, the company has shown a stable trajectory in its return on equity (ROE), maintaining levels around 15%, which is indicative of efficient management of shareholder equity. The dividend yield of Nesco Limited is reported at 1.2%.

In summary, Nesco Limited is characterized by a strong promoter holding, along with significant institutional investment, reflecting confidence in the company’s operational capabilities and market prospects. The diversified shareholder structure contributes to a well-balanced governance framework, supporting long-term growth strategies.

Nesco Limited Mission Statement

Nesco Limited aims to be a leader in the industrial and commercial sector by focusing on quality and innovation. The company operates across various segments including exhibitions, real estate, and food processing. Its mission is to create sustainable value for its stakeholders while adhering to best practices in corporate governance.

The core components of Nesco's mission include:

• Delivering superior customer service.
• Pursuing innovation through technology.
• Building long-term relationships with stakeholders.
• Contributing to the community and environment.

As of the financial year ending March 31, 2023, Nesco Limited reported the following key financial metrics:

In the exhibition segment, Nesco Limited continues to enhance its capabilities by investing in state-of-the-art infrastructure. The company's exhibition center, Bombay Exhibition Centre (BEC), has become a vital hub, hosting numerous national and international events. In FY 2022-2023, the number of events held increased to 95, up from 82 in the previous fiscal year, indicating a growth rate of 15.9%.

Nesco's real estate ventures, particularly the Nesco IT Park, have also contributed significantly to its revenue. The current occupancy rate stands at 87%, with rental income generating around ₹100.5 Crores in FY 2022-2023.

The company emphasizes sustainability as a pillar of its mission. In 2023, Nesco implemented energy-efficient measures in its operations, resulting in a reduction of energy consumption by 20% compared to the previous year. This commitment aligns with Nesco's objective of contributing positively to environmental sustainability.

Nesco's mission statement reflects its commitment to growth, innovation, and community responsibility, positioning it favorably within the competitive landscape of its sectors.

How Nesco Limited Works

Nesco Limited, established in 1946, is primarily engaged in leasing equipment and providing services to various industries, including exhibitions and trade events. The company's operations are divided into several segments, with significant contributions from the exhibition and event management, as well as the manufacturing and leasing of heavy equipment. As of the latest financial report, Nesco operates in segments like the 'Exhibition' and 'Manufacturing' which are critical to its revenue generation.

Financial Overview

For the fiscal year ending March 31, 2023, Nesco Limited reported a total revenue of ₹395.61 crores, a growth of approximately 45% compared to the previous year. The operating profit margin stood at 60%, reflecting efficient cost management within its operational segments.

Segment Breakdown

• Exhibition Services: This segment constituted around 75% of the total revenue, driven by increasing demand for trade shows and exhibitions. The segment reported revenues of ₹296.71 crores.
• Equipment Leasing: This division contributed approximately 25% to total revenue, amounting to ₹98.90 crores.

Key Financial Metrics

Operational Insights

Nesco's Exhibition Center, located in Mumbai, spans over 50 acres and has hosted more than 300 events, attracting over 1 million visitors annually. The center features modern infrastructure and facilities, which enhance the experience for exhibitors and participants alike.

In addition, Nesco has invested in expanding its fleet of heavy equipment, with over 500 units leased out to various sectors including construction and infrastructure development. This diversification not only stabilizes revenue streams but also positions the company favorably for future growth in a recovering market.

Market Position

Nesco Limited is listed on the Bombay Stock Exchange (BSE) under the symbol NESCO. As of October 2023, the stock price is approximately ₹520, reflecting a market capitalization of around ₹1,400 crores. The company has provided consistent returns to investors, with a 5-year CAGR of over 35%.

Overall, Nesco's business model, characterized by its dual focus on event management and equipment leasing, has allowed it to capitalize on growth opportunities in a recovering economy, while maintaining solid profitability metrics and operational efficiency.

How Nesco Limited Makes Money

Nesco Limited operates primarily in two business segments: the leasing of industrial and commercial properties and the manufacturing of engineering products. This dual approach allows the company to diversify its revenue streams effectively.

In the real estate sector, Nesco Limited generates significant income through the rental of its properties, particularly in Mumbai. They lease out facilities to various companies, supporting a range of industries including IT, manufacturing, and retail.

In FY 2022, Nesco Limited reported a total revenue of ₹ 368 crores, reflecting a rise of approximately 17% from the previous financial year. The strong performance in the real estate segment can be attributed to higher demand for commercial spaces as companies expanded their operations post-pandemic.

The engineering segment produces products for various sectors including defense, aerospace, and automotive. This part of the business has witnessed growth due to increased investments in infrastructure and manufacturing. Notably, Nesco’s engineering products division contributed to about 39% of the company’s total revenue, generating ₹ 145 crores in FY 2022.

Additionally, the company engages in hosting exhibitions and fairs, which provides another revenue stream. Nesco’s exhibition business operates at the Bombay Exhibition Centre, generating substantial income through event hosting. In FY 2022, the exhibition segment accounted for around 8% of total revenues with ₹ 24 crores.

Nesco Limited also benefits from strategic partnerships and joint ventures, which enhance its market presence and operational capabilities. For instance, collaborating with technology firms has allowed them to innovate in the engineering products segment.

Cost management plays a crucial role in the profitability of Nesco. The gross profit margin for the company stood at approximately 71% for FY 2022, reflecting efficient operations in both property leasing and manufacturing. Operating expenses were tightly controlled, contributing to a net profit margin of around 38%.

The company's earnings before interest, tax, depreciation, and amortization (EBITDA) for FY 2022 reached ₹ 137 crores, with an EBITDA margin of 37%.

Overall, Nesco Limited's business model leverages its property portfolio and manufacturing capabilities to generate income, while maintaining strong operational efficiency in cost management and revenue growth.