The shares of the prominent satellite Communication service provider plummeted up to 8 percent in the day’s trade after it turned net loss in the fourth quarter, citing weak demand.
Price movement
With a market capitalization of Rs 1,863.46 crore, the shares of Nelco Ltd were trading at Rs 816.65 per share, decreasing around 7 percent as compared to the previous closing price of Rs 878.15 apiece.
Reason for Fall
The shares of Nelco Ltd have seen bearish movement after reporting muted results in Q4FY25, with Revenue plummeting by 16 percent on a quarter-on-quarter basis from Rs. 80.72 crore in Q3FY25 to Rs. 67.52 crore in Q4FY25. Further, revenue shrank by 18 percent year on year, from Rs 81.61 crore in Q4FY24 to Rs 67.52 crore in Q4FY25.
The company’s net profit turned into a loss on a quarter-on-quarter basis, from a profit of Rs. 4.95 crore in Q3FY25 to a loss of Rs. 4.08 crore in Q4FY25. Similarly, net profit turned into a loss on a year-on-year basis from a profit of Rs 6.10 crore in Q4FY24 to a loss of Rs 4.08 crore in Q4FY25.
The company posted a strong FY24- 25 performance, with revenue decreased by 5 percent from Rs 320 crore to Rs 305 crore. Net profit decreased by 58 percent from Rs 24 crore to Rs 10 crore, reflecting a decline in profitability over the previous financial year. The Board of Directors has recommended a final dividend of Rs. 1 per share (10%) (face value of Rs. 10 each) for the financial year ended 31st March 2025.
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Business Model
The company operates two revenue streams: VSAT hardware sales—one-time installations reliant on proprietary technologies sourced from global third-party providers like Viasat, iDirect, and Gilat, and bandwidth and service usage, which constitutes 75–80% of revenue, delivered under long-term one- to three-year contracts with repeat customers and a low 3–5% churn rate.
Company Profile
Nelco Limited is engaged in the business of providing systems and solutions in the areas of very small aperture terminal (VSAT) connectivity and integrated security and surveillance. The Company operates in one reportable segment, which is network systems consisting of SatCom Services.
Written by Abhishek Singh
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