Buy Nesco Ltd - Motilal Oswal

Nesco Limited ( NSE IN; Mkt Cap USD 169mn , CMP Rs 543, Buy)

Nesco's result for 2Q FY11 were in line with expectations at overall levels. Revenues were at Rs.29.3 crs ( down 4% YoY) while PAT was at Rs.19.9 crs. ( down 7% YoY).

Income from Exibitions business was up by 43% at Rs.17 cr, while the rental income was flat.

Capital Goods revenues declined by 46% in 2QFY11 to Rs. 3.9 crs. However, management feels that it will be able to maintain the revenues at larevenue at last year's level.

We expect revenues of Capital Goods vertical at Rs.19 Crs (vs.Rs. 26 crores projected earlier). The construction schedule of IT Park III is expected to be completed by March 2011 and we expect revenues to start from July 2011 onwards. We maintain BUY on Nesco with target price of Rs.750.

Source : Equity Bulls

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