Nesco Delivers Stellar Q1 FY26 Performance with Nearly 50% Net Margin

Image Source: Dr Vijay Malik

Nesco Ltd. has kicked off FY26 with a robust financial performance, reporting consolidated revenue from operations of 1.93 billion rupees and a net profit of 961.4 million rupees for the quarter ended June 2025. The results reflect a strong operational grip and efficient cost management, positioning the company as a resilient mid-cap player in the capital goods and realty segments.

Key Financial Highlights

Revenue from operations stood at 1.93 billion rupees, up 36.5% year-on-year from 1.41 billion rupees in Q1 FY25
Net profit surged to 961.4 million rupees, marking a 37.8% increase from 697.9 million rupees in the same quarter last year
Net profit margin reached an impressive 49.8%, indicating strong bottom-line efficiency
Earnings per share (EPS) rose to 13.6 rupees, compared to 9.9 rupees in Q1 FY25

Segment-Wise Performance

Nesco Realty – IT Park

Continued to be the largest revenue contributor, driven by stable leasing and occupancy
Revenue grew 28% year-on-year, supported by new tenant additions and rental escalations

Bombay Exhibition Centre

Rebounded strongly post-election-related disruptions in Q4 FY25
Revenue jumped 42%, aided by a packed event calendar and higher footfall

Indabrator (Engineering Division)

Delivered steady growth with a 19% rise in revenue
Order book remains healthy, with demand from railways and infrastructure sectors

Nesco Foods

Recorded a 33% increase in revenue, driven by higher catering volumes and new institutional clients

Operational Efficiency and Cost Control

Total expenses rose moderately to 1.01 billion rupees, maintaining a lean cost structure
Employee benefit expenses and depreciation remained stable as a percentage of revenue
Finance costs were negligible, reflecting Nesco’s debt-free status

Strategic Developments

Nesco received operational clearance for IT Park Buildings 3 and 4, expected to boost leasing revenue in H2 FY2
The company continues to explore expansion opportunities in highway infrastructure, with potential long-term revenue streams from wayside amenities

Investor Takeaways

Nesco’s PE ratio stands at 17.9, below the sector average of 28.9, suggesting reasonable valuation
ROE remains healthy at 15.8%, supported by strong asset utilization and capital efficiency
Promoter holding is stable at 68.54%, indicating long-term confidence
Dividend yield of 1.31% adds to shareholder value, with consistent payouts over the past three years

Market Reaction

Nesco shares rose 7.8% on the BSE post-results, closing at 1,293.45 rupees
Trading volumes spiked, reflecting renewed investor interest in the stock

Outlook

With a strong start to FY26, Nesco is well-positioned to capitalize on its diversified business model. The company’s focus on realty, engineering, and hospitality continues to deliver consistent returns, while its infrastructure bids could unlock new growth avenues. Investors seeking a stable mid-cap with high margins and low debt may find Nesco an attractive long-term bet.

Source: Moneycontrol