- 10 Aug 2022
- ICICIdirect Research
NESCO EXHIBITION BUSINESS SHOWS FIRST SIGNS OF RECOVERY
NESCO - 1051 Change: 10.60 (1.02 %)News: Nesco Q1 performance was healthy with partial improvement in exhibition business. Reported revenues were up 41.8% YoY at Rs 103.1 crore. The IT park revenues were up 18.6% YoY at Rs 70.5 crore, possibly owing to reduced vacancies YoY. The exhibition revenues at Rs 16.8 crore was up by 8.8x YoY on depressed base. We highlight that this is first quarter of exhibition revenues recovery but it is still ~39% below pre covid. EBITDA at Rs 66.5 crore, was up ~45% YoY, with margins at 64.5%, up 150 bps YoY and PAT at Rs 53.7 crore was up 26.8% YoY, aided by strong operating performance.
View: We expect exhibition recovery to accelerate from here on. With strong balance sheet (net cash of Rs 856 crore, ~21% of market cap), healthy return ratio and possible recovery in exhibition business on the anvil, Nesco is in sweet spot for robust growth ahead.
Impact: Positive.