NESCO may test Rs 900: Bhavin Desai

Bhavin Shah of Equirus Securities told CNBC-TV18, "There are two main business lines of NESCO. One is the Mumbai Exhibition Center, which is very stable and consistent growth business and we think that low teens kind of growth is possible but the one that drive stronger upside in the earnings is their commercial building where they have now been able to lease 8 out of 11 floors and that is going to generate strong earnings growth."

"It has been very consistent in terms of its earnings growth over the years and it has been seeing slow but steady rerating in the valuations. If someone does a conservative discounted cash flow (DCF) valuation on this company, it may end up with fair value in the range of Rs 1,100 but even if it doesn't achieve that kind of a valuation, something like Rs 900 or thereabouts is possible over next 12 months basis based on the quality of earnings, 50 percent return on capital on core business and very strong RoE and at the same time comfortable valuation around two times price to book," he said. Disclosure: He covers the stock but he does not have any personal holding in it.