- 11 Nov 2022
- ICICIdirect Research
EXHIBITION BUSINESS RECOVERY DRIVES STRONG NESCO PERFORMANCE
NESCO - 998 Change: -11.40 (-1.13 %)News:
Nesco Q2 performance was strong, driven by improvement in exhibition business. Reported revenues were up 76.9% YoY at Rs 142.9 crore. The exhibition revenues at Rs 53.1 crore was up by ~25x YoY on depressed base. We highlight that exhibition revenues recovery was robust and is now back to ~3% above the pre Covid levels. The IT park revenues were up 11.9% YoY at Rs 73.1 crore, possibly owing to reduced vacancies YoY. EBITDA at Rs 100.1 crore, was up ~101% YoY driven by operating leverage, with margins at 70.7%, up 840 bps YoY and PAT at Rs 81.9 crore was up 86% YoY, aided by strong operating performance.
View:
We expect exhibition recovery to drive the earnings growth ahead. With strong balance sheet (net cash of Rs 1000 crore, ~22% of market cap), healthy return ratio and recovery in exhibition business on the anvil, Nesco is in sweet spot for robust growth ahead
Impact:
Positive