NESCO (NESCO)

FairStock Score: 39/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Return on equity of 16.80% and ROCE of 21.12% indicate strong capital efficiency.
• Negligible debt with debt/equity of 0.04 provides financial stability.
• Promoter holding of 68.54% aligns management interests with minority shareholders.
• Sales growth of 20.03% shows the business is expanding its revenue base.
• Latest quarter net margin is strong at ₹105 crore profit on ₹248 crore sales.

Concerns

• Profit growth is negative at -4.82% despite 20.03% sales growth, implying margin pressure.
• Piotroski F-score of 4/9 signals weak fundamental and earnings-quality signals.
• P/E of 19.39 and P/B of 3.36 leave a limited margin of safety.
• Dividend yield of only 0.58% offers little income support.

AI Analysis

At ₹1,185.80, NESCO is not an obvious bargain. The market values the company at ₹7,917 crore against book value of ₹352.80 per share, so I am paying 3.36 times net worth. In Graham's framework, that leaves little margin of safety from assets; protection must come from future earnings. The balance sheet is sound: debt-to-equity is 0.04, and the company earns 21.12% on capital employed and 16.80% on equity. Those are good numbers, and sales growth of 20.03% shows the business is expanding. What troubles me is that profit fell 4.82% in the same period. A business with real pricing power should normally convert higher sales into higher profits. The latest quarter shows ₹248 crore of sales and ₹105 crore of net profit, a strong margin, but the annual trend suggests costs or competition are pressing. The Piotroski score of 4 out of 9 adds to my caution; the underlying financial signals are not confirming the headline strength. At a P/E of 19.39, I am paying nearly twenty times earnings for a business whose profits are declining. The dividend yield of 0.58% is too thin to compensate for this uncertainty. Promoter holding is high at 68.54%, and that is a positive because owners' interests are aligned with public shareholders. The PEG ratio of 0.97 only makes sense if the 20% sales growth starts flowing to the bottom line; this year it has not. This looks more like a cyclical commercial-services business than a predictable stalwart. I would keep it on my watchlist, not buy it here, until profit growth returns and the price offers a better margin of safety.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer