During Friday’s trading session, the shares of a company engaged in the businesses of licencing premises in IT park buildings, exhibitions and related services jumped 3.8 percent to Rs. 1,053.8 on BSE, after winning Rs. 200 crores contract from National Highways Logistics Management Limited.
With a market cap of Rs. 7,230 crores, at 12:03 p.m., the shares of NESCO Limited were trading in the green at Rs. 1,026.1, up by 1.05 percent, as against its previous closing price of Rs. 1,015.45.
What’s the news:
According to the latest regulatory filings with the stock exchanges, NESCO Limited has emerged as the highest bidder for a project awarded by the National Highways Logistics Management Limited (a wholly-owned SPV of NHAI, under the Ministry of Road Transport and Highways).
The contract involves developing, operating and maintaining Wayside Amenities on the Hyderabad-Visakhapatnam Expressway in the Khammam-Devarapalle section across 4 sites on a lease basis.
The lease period is 30 years, with the company holding the first right of refusal to extend the agreement for an additional 30 years. The project is to be completed within 10 months from the Appointed Date.
The estimated development cost for the Wayside Amenities is approximately Rs. 50 crores per site, totalling Rs. 200 crores for all four sites.
From the fourth year of operations, the expected annualized revenue from the four sites is around Rs. 300 crores. The annual lease rent for the four sites is Rs. 4.29 crores, subject to fixed annual revisions based on increases in WPI and CPI.
Financials:
NESCO reported a marginal growth in revenue from operations, experiencing a year-on-year rise of nearly 9.7 percent, from Rs. 175 crores in Q2 FY24 to Rs. 192 crores in Q2 FY25.
Similarly, its net profit increased during the same period from Rs. 88 crores to Rs. 107 crores, representing a rise of nearly 21.6 percent YoY.
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Key Financial Ratios:
In terms of key financial metrics, NESCO has a Return on Equity (RoE) of 17 percent and a return on capital employed (RoCE) of 22.4 percent. Additionally, the company’s PEG ratio stands at 1.28.
Stock Performance:
The stock has delivered positive returns of nearly 24.7 percent in one year, as well as around 4.5 percent returns in the last six months. So far in 2024, the shares of NESCO have given positive returns of about 15.4 percent.
About the company:
Incorporated in 1946, NESCO Limited operates primarily in the following areas: licencing premises in IT park buildings and providing related services, licencing premises for exhibitions and providing services to the organisers, manufacturing machines and capital equipment, and providing hospitality and catering services.
Written by Shivani Singh
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