Business Segment Review
Nesco IT Park
Nesco Realty has carved a benchmark with its premium Nesco IT Park. A self-sustained
facility, the Park is laid out over several million square feet. It accommodates the
worlds leading multinationals such as HSBC, KPMG, PWC, MSCI, BlackRock, Here
Solution, Framestore, Priceline, WeWork, Apollo Global and several others.
Developments
During the past year, our Company demonstrated consistent success in licensing and
managing our Towers, specifically Tower 03 and Tower 04, within Nesco IT Park. We are
pleased to report that Tower 03 witnessed an occupancy rate of 82% for its chargeable
space, while Tower 04 achieved an impressive occupancy rate of 97%. Presently, we are
proud to share that 90% of office space within the park are occupied, reflecting the high
demand and desirability of our facilities.
Throughout the year, we actively collaborated with major International Property
Consultants to facilitate the leasing of space at our Towers. This strategic coordination
played a vital role in attracting and securing reputed clients for our facilities. To
further enhance the amenities available at Nesco IT Park, we inaugurated a Food Court
during the year. We are delighted to have leased space to renowned brands such as Dominos,
Subway, Shivsagar, Tibbs Frankie, and others. Additionally, three new restaurants Social,
Smoke House Deli, and FOO were established and have already commenced operations at Nesco
Tower 04, offering a diverse culinary experience to our occupants.
In order to foster engagement among the employees of our IT park clients, we organized
a two-day Carnival. This event featured a range of activities including games, a quiz
show, drum beats, live performances, and stand-up comedy. By providing such entertaining
and interactive experiences, we aimed to create a vibrant and enjoyable atmosphere within
the IT Park.
Opportunities and Threats
The Mumbai Suburban area, with its concentration of MNCs and banks, offers a great
opportunity for landlords in the IT Park sector. However, there is a lack of high-quality
office spaces in the micro-market, making timely supply a key differentiator. Occupiers
are increasingly focused on ESG considerations and green buildings, which can influence
their choice of premises. Technology enhancement and flexible leasing options are also
important for long-term success. Nesco IT Park faces competition from nearby office space
providers and established business parks in the city. To stay competitive, Nesco should
continue improving its offerings, amenities, and service to attract tenants.
Concerns
Post-Covid, companies have faced the challenge of improving profitability and reducing
costs. As a result, they may consider downsizing their office spaces or relocating to
areas with lower rental rates. This shift in demand could create pressure for
renegotiating rent escalations that were due in the current year.
Additionally, many companies are re-evaluating their workforce footprints and
considering spreading their office locations across both the western and eastern suburbs
of Mumbai. This strategic move allows them to optimize their presence and cater to the
diverse needs of their employees in different locations.
Capital Expenditure and Expansion Plan
Nesco IT Park had completed the designing & finalization of plans for the new Tower
02 which will be located in place of legacy IT building 02 and the adjoining areas. The
designs were made by Singapore Based Architects Aedas and the total development size will
be about 4.6 million sq. ft. that includes office space, hotel, car parking and other
amenities. The outflow of entire estimated cost for Tower 02 will be spread across 5 years
and civil work expected to start shortly after approvals from various Governmental
Authorities.
Company commenced part of its various F&B and Retail areas in Tower 04 which
included 3 new Restaurants and a Food Court with an investment of Rs.666.03 lakhs. The
future expansion in Tower 04 includes a Gym, a Convenience Store, a Salon and a Coffee
Shop.
Company has completed upgrading of the landscaping of its Tower 03 at a total cost of
Rs.387.03 lakhs in financial year 2022-23 as a part of overall upgradation of the
facility.
Bombay Exhibition Center
Bombay Exhibition Center (BEC) embodies the essence of belief and opportunity. Serving
as a catalyst for countless ideas to come to life, this center has played a pivotal role
in bringing together individuals and businesses from around the World with a shared
purpose in Mumbai.
The exhibition industry sector enables trade/business transaction of over Rs. 3,00,000
crore, annually boosting and supporting the growth of various spectrum of industries while
also being a colossal employment provider with nearly 1,20,000 people employed in this
industry. Normally, during the year 745 events are conducted, average event size is of 9.8
thousand gross sq. meters. As a space of limitless possibility, Bombay Exhibition Center
is endlessly customizable. With robust infrastructure, the center paces itself to global
standards. The wide options of venues, the versatility packed within, are topped with
helpful services. With the continued expansion of Bombay Exhibition Center, there is now a
versatile solution for any trade fair. The BEC is already Indias largest exhibition venue
in the private sector, hosting exhibition for most of the large and reputed organisers
from India and across the Globe.
Bombay Exhibition Center has achieved a significant milestone in Mumbai, establishing
itself as the premier destination for exhibitions, MICE (Meetings, Incentives,
Conferences, and Exhibitions), trade shows, business displays, events, and entertainment.
Its historical status as an ideal location underscores its appeal and suitability for a
wide range of events and gatherings.
The introduction of Nesco Events into the event space has been met with tremendous
excitement. This venture has successfully created unique event properties that have
quickly gained widespread acclaim and popularity. This impressive start has further
strengthened the Groups capabilities in delivering high-quality entertainment to an
enthusiastic and growing audience of enthusiasts.
Nesco Events works closely with the government and industry stakeholders to organize
meticulously planned fairs and events that showcase the latest trends, innovations, and
industry-specific themes. The aim is to establish comprehensive B2B and B2C platforms
across various industries, positioning Nesco Events as a leading global event organizer.
Committed to presenting unparalleled cultural experiences that enrich and elevate life,
Nesco Events goes beyond traditional event management. With the creation and curation of a
diverse portfolio of successful event properties, the Company has expanded its offerings
to include tailored venues and innovative production capabilities. With each new event,
Nesco Events strives to create unexpected and unforgettable experiences, constantly
pushing the boundaries of what is possible.
Developments
Guest Exhibitions and Events
During the financial year 2022-23, a total of 83 exhibitions and 10 events were
scheduled and successfully held at Nesco. It is noteworthy that all the halls were fully
occupied, with the Municipal Corporation of Greater Mumbai (MCGM) releasing them for use
throughout the year. Additionally, 6 exhibitions that had been absent for several years
made a comeback and were held at our venue, adding to the overall event portfolio.
The year also witnessed the addition of several new clients, further diversifying our
customer base. Notable additions included Oceantrade Media, S.S Textile Media, Travel
India, Jet Skysports Gaming, All India Gem and Jewellery Domestic Council, and more. The
inclusion of these new clients contributed to an increase in our revenues, showcasing the
growing demand and trust in Nesco as a preferred venue for exhibitions and events.
Nesco Events
During the financial year 2022-23, Nesco successfully hosted 10 notable events,
showcasing its versatility as a preferred venue for a diverse range of gatherings.
One of the highlights was the 3rd edition of the India Auto Show, which took place in
May 2022. This automotive exhibition provided a platform for industry players to showcase
their latest offerings and innovations.
Another significant event was the grand celebration of Navaratri, called ‘Rangilo
Re..... Utsav Gujarat No. This nine-day festival attracted a large-scale participation,
featuring performances by five renowned artists. The event garnered immense popularity,
with over 1,50,000 people attending and immersing themselves in the festive spirit.
Kula Worldwide, a global gathering of arts, culture, street art, and music, was also
organized by Nesco. The event witnessed the participation of more than 150 talented tattoo
artists from various countries such as Australia, Germany, Indonesia, Japan, Malaysia,
Nepal, New Zealand, UK, US, Vietnam and India. This unique event celebrated artistic
expressions from around the World.
Nesco Events further collaborated with various organizers to present captivating live
concerts, including performances by Guru Randhawa, MC Stan and King held during the
festive season of Holi.
Through these diverse events, Nesco aims to establish itself as a preferred venue for
both local and global events and exhibitions. The goal is to create an atmosphere where
all types of gatherings, whether cultural, artistic, or entertainment-focused, can thrive
and leave a lasting impression on attendees.
Opportunities and Threats
Guest Exhibitions and Events
After the pandemic, the Municipal Corporation of Greater Mumbai (MCGM) cleared and
released the premises it occupied, allowing Nesco to resume operations. Since then, a
total of 83 exhibitions have been organized and held at the Bombay Exhibition Center,
attracting a significant number of exhibitors and stakeholders.
Organizers have been actively exploring new territories to host their exhibitions,
indicating a positive outlook for the industry. However, the war-like situation between
India and China has had an impact. Some exhibitions experienced a reduction in size or
were postponed due to restrictions imposed by the government on Chinese exhibitors visas.
This situation has posed challenges for certain exhibitions that relied on participation
from China.
Nesco Events
Nesco Events thrives on endless opportunities, as it can venture into various topics
and niches that are not currently being organized elsewhere. The Company has the potential
to tap into the international market and provide a platform for exhibitors, visitors, and
the government to come together at Indias leading privately owned venue.
There is also a promising opportunity for strategic tie-ups with third-party
exhibitions and events, which can bring benefits ranging from increased revenues and brand
building to higher footfall at the venue. Nesco Events can explore launching new
intellectual properties (IPs) in the B2C space, such as music festivals, food festivals,
and kids festivals, further expanding its reach and appeal.
Post-pandemic, Nesco Events has witnessed remarkable growth and development in its
sector. The Company successfully organized and scheduled numerous events at Nesco,
including live concerts, Holi festivals, tattoo conventions, and music festivals. This
diversification has allowed Nesco Exhibitions and Events to enter new sections of the
industry, catering to a broader audience and showcasing its versatility and adaptability.
Concerns
The biggest risk for Bombay Exhibition Center is competition mainly on the quality of
infrastructure vis-a-vis the other venue. Though Bombay Exhibition Center excels on
location, the demand is primarily for pillar-free, dust free and leakage free halls. To
meet the expectations of the organisers and exhibitors alike we now need to have spruced
infrastructure.
Capital Expenditure and Expansion Plan
Bombay Exhibition Center had completed the designing and finalization of plans for the
new Hall 06 (in place of legacy IT Building 01 or Hall 08). The net hall area will be
approx. 1,50,000 sq. ft. and will have separate pre-function areas, organiser office,
parking for approx. 500 cars and other amenities.
The estimated cost for Hall 06 is around Rs. 12,500 lakhs, with outflow spread across a
year and civil work expected to start shortly after approvals from various Governmental
Authorities.
Company has plans to further develop a world class integrated Exhibition Centre
comprising of Exhibition Centre, Convention Centre, Hotel and other amenities in the
coming years.
Nesco Events division now has started expanding its operations. During the year, they
organised 5 own exhibitions and events and 5 events were in strategic alliances with our
clients.
The division during the year successfully launched Kula Tattoo Festival and also
hosted annual editions of ‘Rangilo Re..... Utsav Gujarat No, India Auto Show and
World of Education. These would grow in the coming years and also more exhibitions and
events would be launched by the division.
Nesco Foods
Nesco Foods caters to all levels of social, business and luxury events. It is one of
Mumbais most preferred hospitality providers, well-recognized for their varied capability
and array of cuisines. The division operates the largest non-flight kitchen in the city.
Developments
Exhibitions and Banquets
Nesco Foods has brought on board experienced personnel to drive revenue growth. They
are focused on developing market awareness, particularly in the banquet segment for both
corporate and social events. Nesco Foods participated in industry forums to increase
recognition. During the pandemic, they provided packed meals to Dedicated Covid and Health
Centers. The division has also opened retail outlets named "Indic" and
"Daily Deli" and received awards for best customer experience in food courts.
The Exhibition and Banquets sub-division is prioritizing banquet and retail businesses.
The Grande Hall successfully serviced over 100 events and received recognition as the most
promising food venue with banquets.
Restaurants and outlets
A new sub-division named Restaurant and Outlets is started by the Company under which
the Company has inaugurated 3 new restaurants and a food court in Tower 04. The Company
has partnered with various reputed brands in their food courts in exhibitions which is
highly appreciated by organisers and visitors.
Opportunities and Threats
The pandemic-induced backlog of events presents an opportunity for Nesco Foods to cater
to the social and corporate segments in the banqueting business. Nesco Foods has also
introduced a new sub-division called Restaurant & Outlets to manage the restaurants,
food court, and lounge bar. This sub-division has formed valuable alliances with renowned
brands like Subway, Dominos, Shiv Sagar, Foo, and Socials, enhancing the offerings and
reputation of Nesco Foods.
In the current financial year, the division has experienced productivity and success,
particularly with the Grande venue. The availability of large space in a secure
environment with ample parking has positioned Grande and Nesco as a preferred location for
corporate events, leading to a strong reputation as a premium banquet venue for weddings
and other special occasions.
Concerns
Despite the city returning to a state of normalcy, the fear of a potential next wave of
the pandemic had created temporary uncertainty and concern in the industry. This
unpredictable situation can impact the planning and execution of events and exhibitions.
Furthermore, the launch of new convention centers and premium banquet venues in Mumbai
introduces notable competition in the market. To stay competitive, Nesco must employ
aggressive marketing strategies and maintain high service standards to attract and retain
clients. Adapting to evolving customer demands and delivering exceptional experiences will
be crucial in facing this competition effectively.
Capital Expenditure and Expansion Plan
Nesco Foods expanded its presence during financial year 2022-23. The legacy business
organised under the sub-division Exhibition and Banquets refurbished its flagship venue
The Grande was able to reach pre-covid levels and was also able to establish itself as a
preferred destination for hosting events, ceremonies, functions, marriages and corporate
programs for those in the vicinity. The sub-division named Restaurant & Outlets in
alliance with some reputed brands of the city have already started 3 new restaurants and a
food court in Tower 04 and have also brought several new options for food courts in
exhibitions which is being highly appreciated by organisers, exhibitors and visitors. The
sub-division invested 666.03 lakhs for commencing this business stream.
For the financial year 2023-24, division is planning to further increase its revenue
stream by adding more restaurants and outlets within Nesco Center and by further expanding
its footprints into outdoor catering and B2B contracts outside the Nesco Center.
Indabrator
Indabrator, our engineering division is a pioneer in the surface-preparation category.
Backed by best-in-class technology, Indabrator boasts one of the largest manufacturing
units. Today, it remains a Company with impressive market share and multiple innovations
in the pipeline and only manufacturer in India for equipments, spares and abrasives all in
one location.
Developments
Indabrator has effectively capitalized on opportunities presented by firms seeking to
establish or expand greenfield and brownfield projects. The sales of abrasives have shown
a consistent upward trend.
Indabrator has started 3 Shift to increase abrasive production at Karamsad to reach
installed capacity of 500 MT/Month. It has rd successfully commissioned high value Blast
Cleaning Systems at Railway workshop, Liluah and Plate Preservation Line at Hooghly Cochin
Shipyard.
Further, we have appointed agents in Export region for sale of abrasives and machines.
Opportunities and Threats
The biggest opportunity for Indabrator is the longevity in the business, strong and
wide client base, its capability and capacity of handling large projects. Division has
integrated manufacturing set-up under one roof. Export of Equipment, Spares and Abrasives
can be a good opportunity for the Company. However, Compliance to international standards,
their requirements and local and international competition from established suppliers is a
challenge for the Company.
Since, last two years we were taking small orders with respect to designing and
supplying of complete painting or powder coating or phosphating. Next year onwards, we
will be taking big orders for the said work which would help us to provide full facility
under one roof. Further, we are looking to outsource our job work for casting and
production like motors and pumps parts which will allow us to focus on completing our
orders within the prescribed timelines and focus on other things. We will also be focusing
on customized heavy fabrication work.
Concerns
For Indabrator, currently the biggest risk is the shift in customer demands,
competitions and changes in Technology. Workplace health and safety and environmental
regulations is a challenge. International Companies are setting up its sales &
manufacturing infrastructure and are offering cost effective solutions which can be the
biggest challenge for us in near future. The growth of Indabrator depends on may factors
like adoption of new design, technology and automation, satisfying International customers
demands with respect to quality, delivery, performance or service support is a task and
well planned approach is required for the same.
Capital Expenditure and Expansion Plan
Indabrator division is undertaking further upgradation of its process as well as
infrastructure. The infrastructure enhancement includes renovation of portions of the
existing structures and is estimated at approximately Rs.399.54 lakhs.
Investment
Our Companys investment portfolio primarily consists of holdings in mutual funds,
corporate deposits, non-convertible debentures, bonds, and preference shares. Its
important to note that market volatility can potentially lead to Mark to Market losses,
which may have an adverse impact on the Companys financial position.
To mitigate this risk, the management regularly reviews the investments and assesses
their returns. This evaluation is presented to the Board for consideration on a quarterly
basis. By closely monitoring the investments and their performance, the Company aims to
make informed decisions and minimize the potential negative effects of market fluctuations
on its investment portfolio.
Outlook
The impressive growth across our business divisions is a testament to our strategic
focus, resilient operations, and commitment to delivering exceptional value to our
customers. We are particularly encouraged by the continued demand in the IT Park sector
and the confidence shown by our customers in the BEC division. With a solid balance sheet,
healthy cash flow, and a diversified pipeline of businesses, we are well-positioned to
capitalize on the current market upcycle and achieve our business goals. Nesco Limiteds
strong financial performance post-pandemic is a testament to the Companys business growth
across verticals.
Enterprise Risk Management
Common and General risk or concern which may impact the Companys business are
statutory permissions, market conditions, natural concerns, riots, uprisings, religious
holidays, acceptance of the exhibitions and events concept by the targeted audience and
potential sponsors.
The Company has a Risk Management Policy, which provides overall framework of Risk
Management appropriate to it and to the business environment under which it operates.
Risks are being identified at regular intervals by the Companys Board of Directors and
key management personnel and their mitigations plans are discussed at the Risk Management
Committee meetings.
Internal Control Systems and their adequacy he Company has proper and adequate system
of internal controls which ensure that all the assets are safeguarded against loss from
unauthorized use or disposition and that all transactions are authorised, recorded and
reported correctly.
Our internal financial control framework is commensurate with the size and operations
of the business and is in line with requirements of the regulations. We have laid down
adequate procedures and policies to guide the operations of our business. Divisional Heads
are responsible for ensuring compliance with the policies and procedures laid down by the
management. Our internal control systems are routinely tested by the Management, Statutory
Auditors and Internal Auditors. All major findings and suggestions arising out of internal
audit are reported to and reviewed by the Audit Committee. The management ensures
implementation of these suggestions and reviews them periodically. The Company
continuously strives to evolve, improve and implement the best practices for each of its
major functional areas with a view to strengthen its internal control systems.
Internal Audit
The internal audit of our Company is conducted by an independent audit firm consisting
of chartered accountants. The internal auditor follows a quarterly or calendar plan to
carry out audits. The internal audit process involves a risk-based approach, focusing on
areas and processes identified as high-risk. In addition, transaction audits are conducted
for specific areas and processes to ensure compliance and identify any irregularities or
areas for improvement. This comprehensive internal audit framework helps to enhance
transparency, mitigate risks, and improve the overall effectiveness of our Companys
operations.
Development in Human Resources and Industrial Relations
Companys vision is to create a cohesive work environment that encourages the employees
to pursue their professional and self-development goals in addition to building
operational excellence and a sense of belonging. Company believes that human resources are
a critical factor for its growth. The emphasis is on grooming inhouse talent enabling them
to take on larger responsibilities. The relations with the employees and workers remained
cordial and harmonious throughout the year. Company has made efforts to improve the
employees safety and security. Company has standardized the Policy for Recruitment,
Training and Development and Employee Benefit. The Company has initiated providing
Employee Flexi Benefits and training programs for employees.
Financial Review
During the year under review, all businesses performed well resulting in revenue and
profits. The Standalone and Consolidated financial highlights for financial year 2022-23
are as follows: ( in lakhs)
|
Consolidated |
Standalone |
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Revenue from Operations and Other Income |
60,925.69 |
38,241.21 |
60,911.81 |
38,216.37 |
| EBIDTA |
41,196.97 |
26,398.49 |
41,195.23 |
26,401.82 |
| Profit Before Tax |
36,697.02 |
22,646.00 |
36,697.03 |
22,651.18 |
| Profit After Tax |
29,063.63 |
18,917.12 |
29,063.64 |
18,922.24 |
|
Consolidated |
Standalone |
Particulars |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
| Debtors Turnover Ratio |
26.47 |
13.99 |
26.47 |
13.99 |
| Inventory Turnover Ratio |
9.88 |
7.65 |
9.88 |
7.67 |
| Current Ratio |
4.70 |
8.04 |
4.70 |
8.02 |
| Operating Profit Margin |
69.45% |
69.85% |
69.45% |
69.87% |
| Net Profit Margin |
47.70% |
49.47% |
47.71% |
49.51% |
| Return on Net worth |
14.79% |
11.17% |
14.79% |
11.19% |
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