Analyst Report : NESCO Ltd. (BUY; Estimated Price: Rs. 1842)

Introduction:

NESCO was established in 1939 as a manufacturer of tools and surface preparation machines which are supplied to various industries in India. It started as an engineering firm but slowly diversified into two other segments, namely incubator (exhibition hall) and real estate (renting and leasing of offices). As its core operation was engineering products, the company had plants at multiple locations in Mumbai but soon it consolidated all the plants in a single 70 acre land brought in Goregaon on the Mumbai-Goregaon Express Highway.

Figure 1: The sectors in which NESCO operates

Quarter-I (FY 2015-16) Analysis Report: Atul Auto Limited (BUY; Estimated Price: Rs. 495)

Atul Auto Limited, which began its operations in 1992 at Rajkot, Gujarat, manufactures 3 wheeler auto rickshaws and their spare parts. It gets major competition from Bajaj Auto and Piaggio. The company recently expanded its production capacity from 48,000 units to 60,000 units at its Rajkot plant in July 2015. In the meanwhile, it has also been working on its Greenfield expansion in Ahmedabad. The company expects to be able to set up this facility by FY2016-17 or early FY2017-18. The capacity would be 60,000, which is likely to come up in two stages; 30,000 plus 30,000. The capacity utilized in FY 2014-15 was 86.6% with 41,598 units sold.