Wouldn't Nesco be a better bet, considering that they too are in the process of setting up another IT tower. Plus they have plenty more land to pursue similar developments in the future. Although the management may not be as great as GIC Singapore. Look forward to your views.
Yes Nesco is a good bet in similar business. But they have recently started investing in other kind of assets like hotels, food courts wherein ROIC & cashflows are not as great as an IT park. But having said that, Nesco might get some synergy for its Hotel asset due to the exhibition business.
If they do not go for any new business plans like buying another land for development, then post repayment of debt, almost all of the profits should be distributed to shareholders in which case it becomes a dividend yield stock.
Very interesting analysis. Nirlon seems to be well poised to do better with its new leasing contract with JP Morgan. I think also Covid would not affect the business very much as it would be the break of contract. Basically, it is a contractual business and a sticky type one as the customer once establish their counters/office, they will not move easily. Now the question is if the contract is not renewed or any dispute of the land. I have very little knowledge of the present valuation and whether one should buy at this price or not. It would be better if you do a comparison between Nirlon, Nesco, and its competitors and come up with a fair valuation. Well researched and a very well-written topic. Thank you Ankush for doing such thorough research.
Have talked about Nirlon's valuations in the post itself. Comparison with Phoenix or Nesco would not be direct because Phoenix is largely retail assets and Nesco has substantial revenues coming from the exhibition business.
Wouldn't Nesco be a better bet, considering that they too are in the process of setting up another IT tower. Plus they have plenty more land to pursue similar developments in the future. Although the management may not be as great as GIC Singapore. Look forward to your views.
Yes Nesco is a good bet in similar business. But they have recently started investing in other kind of assets like hotels, food courts wherein ROIC & cashflows are not as great as an IT park. But having said that, Nesco might get some synergy for its Hotel asset due to the exhibition business.
Do you see 3 years down the line,Nirlon giving 50% of cash flow as dividend which would be in the range of 30 Rs.
If they do not go for any new business plans like buying another land for development, then post repayment of debt, almost all of the profits should be distributed to shareholders in which case it becomes a dividend yield stock.
Very interesting analysis. Nirlon seems to be well poised to do better with its new leasing contract with JP Morgan. I think also Covid would not affect the business very much as it would be the break of contract. Basically, it is a contractual business and a sticky type one as the customer once establish their counters/office, they will not move easily. Now the question is if the contract is not renewed or any dispute of the land. I have very little knowledge of the present valuation and whether one should buy at this price or not. It would be better if you do a comparison between Nirlon, Nesco, and its competitors and come up with a fair valuation. Well researched and a very well-written topic. Thank you Ankush for doing such thorough research.
Have talked about Nirlon's valuations in the post itself. Comparison with Phoenix or Nesco would not be direct because Phoenix is largely retail assets and Nesco has substantial revenues coming from the exhibition business.
Thanks, Ankush. Thus, Nirlon has created a MOAT, however, it would be great if they will expand to other great locations in the future.