BSE Code: 505355 | NSE Code: NESCO
We recommended Nesco recently after going through the wonderful analysis by Prof. Bakshiji. The stock has got good coverage by fellow value investors and business channels. Do go through the detailed post by Rohit along with links to posts by Neeraj & Ninad.
Our viewpoint and thoughts in brief:
The Bombay Exhibition Center covering area of about 4.5 Lac sq. ft., is a sort of monopoly in Mumbai with a lot of bargaining power. The growth in rentals can be observed from the table below:
| Year | Annual BEC Revenues (Million in Rs.) | Space (sq. ft.) | Monthly Rate (per sq. ft.) |
| 2011 | 656.20 | 450000 | 122 |
| 2010 | 540.40 | 450000 | 100 |
| 2009 | 349.60 | 450000 | 65 |
| 2008 | 496.30 | 450000 | 92 |
| 2007 | 329.10 | 450000 | 61 |
| 2006 | 144.10 | 450000 | 27 |
| 2005 | 109.70 | 450000 | 20 |
| 2004 | 54.40 | 450000 | 10 |
Today most of the biggest trade events held in Mumbai are held here. Such kind of business is tough to find at reasonable valuations and I think most of us would agree that current valuations are reasonably cheap.
The trigger is: the company has already constructed IT Building – 3 which has a leasable area of close to 8 Lac sq ft. At a conservative rental of Rs.100 / sq ft, the company should be able to get a Net Profit of 70 Cr+ (post tax). This might happen over next 1 year.
Nesco made a Net Profit of about 68 Crores last year so if the profits are to double over next 1-2 years, the stock can also double out without any PE re-rating. Plus going forward, the company plans to build another IT Building and double the leasable at its Bombay Exhibition. Hence being a debt free company with about 180 Crore cash on Balance sheet, it seems to be a very safe pick at these levels.
Change of views now after Q3 numbers?
The long term story very much remains intact. I think the Q3 nos are decent and in-line. The Q4 needs to be watched for additional revenues from the new IT Building
Up another 8% today … Take a bow dude !!
since last 6 months i am tracking this company. plus have been reading a couple of analysis done here . in fact before i started buying this company @ayushmit:disqus 350 levels. and volumes were pathetically low. but bec of good fundamnetals and good promoters. i started accumulating. NOW the run up is too fast. dalal street has become a good forum for people like us to share good info, make good study-analysis, and let all like minded people join in and profit from it. instaed of getting glued to TV channels like CNBC and lose money……..mindless speculations kills and only CNBC and brokers benefit. for building longterm wealth i stronlgy feel that u r doing a splendid job…and i hope more and more internet users benefit. I WOULD LIKE TO RECOMMEND CENTURY TEXTILES. FOR OUR SUBSCRIBERS….AND HOPE OTHER ALSO JOIN IN AND GIVE THEIR ANALYSIS. this compnay is now doing well…cement turnaround…etc.etc.an invesment at every fall….keep adding….next 2-3 years is very good for this company….brand value, land, rental income, cement etc.etc…
CENTURY TEXTILES: CMP : 315
It operates in 3 segments –
textiles, cement and paper. Its textile mill mfgs cotton products like elite
shirtings, suitings , dress materials bed linen, all branded products under
baneer of CENTURY .
For FY11 the profitability fell
due to unfavourable market conditions especially in the cement segment.
FV:10 / Eq: 93 cr. Promoter
Hold: 40 % / Sales : 4376 cr. OP margins 14.30 % / 52 weeks H/L 552/268
Last bonus in 1997 1:1 /
The company is looking to hive
off the cement division to ULTRATECH , another Birla company. Expected to fetch
good valuations and the cash received will be utilized to develop commercial
land in Lower Parel (Mumbai ) area.This space commands premium in the market
and it will fetch superb revenue for the company. The other property in
Prabhadevi is already near completion and soon will start fetching rental
income.The future is promising and those who accumulate the stock at present
levels will get a confident return of more than 100% in next 1-2 years time.
Kumaramangalam Birla is now actively managing this company and just like
Piramals, Godrejs , Raymonds , Bombay Dye, etc.
…Birla also wants to capitalize on the booming commercial space in
Mumbai.
Hi Jatinder,
Thanks a lot for your kind words and encouragement. Its because of the collabrative work and feedbacks from wellwishers like you that our ideas are doing well.
Will read more into this co.
Thanks & Regards,
Ayush