Nelco is an B /T+1 group, Computers Hardware & Equipments company with having Face value of Rs. 10. Nelco started in 1940 as a revolutionary electronics company is a part of US $ 116 Bn Tata group and a frontrunner in telecom communication. It offers a range of innovative and customized solutions for businesses and government institution and helps its enterprise & government customers to unlock potential by offering solutions in the areas of VSAT connectivity, Satcom Projects and Integrated Security & Surveillance Solutions. It offers services and solutions to different sectors such as Banks ATMs and Bank branches, Renewable energy, Enterprise solutions, Oil, Energy, Gas, Maritime, aero and even Industrial Plants, Power Stations, Broadcasting Stations, Telecommunications Stations, Airports, Railways, Seaports and Borders through its subsidiary Nelco Network Products Limited (NNPL).

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was Rs 81.98 crore in March 2023 up 14.35%, Quarterly Net Profit at Rs. 5.66 crore in March 2023 up 86.8% and EBITDA stands at Rs. 17.67 crore in March 2023 up 24.17% as compared to December 2021. Its EPS has increased to Rs. 2.48 in March 2023 from Rs. 1.33 in March 2022.

Key Points:

1. Nelco has successfully provided solutions for Covert Intrusion Detection across Indian Borders and has installed Comprehensive Electronic Security and Surveillance solutions for the security of critical defence facilities such as Ammunition Depots and Naval Bases.
2. Nelco has implemented largest turnkey project in Asia for Ministry of Defence which included 25 HUBs and 500+ remotes. It was Asia’s Largest and most complex hybrid network with Satcom connectivity for 179 MoD user establishments for backup to terrestrial MPLS.
3. It has also provided Pan-Africa satellite network across 53 countries which includes services such as Tele-medicine, Tele-education and other services over VSAT network along with VVIP connectivity (VoIP and Video Conferencing) among the Heads of States and LinkStar / LinkWay Hub at Senegal.
4. It has successfully provided an Integrated Security system for passenger safety at 29 of the large stations across the railway network covering the Southern, South-Central, Central and North Western Railway Divisions.
5. It has successfully deployed a multi-layer security system including Deployed electronic perimeter security, high security intrusion detection, access control, alarm and surveillance systems for most critical military installations across the country including Military Ammunition Depots, Defence Research Labs, critical Naval Installations along the eastern and western costs of our country.
6. The company also supplied and successfully installed border intrusion detection solutions for monitoring of pedestrian and vehicle movement to the Indian Armed forces.
7. Nelco has provided IOCL a State-of-the-art Integrated Security and monitoring system, which Includes Electronic Perimeter Security, CCTV based Surveillance, Access Control Systems and Specialised Process monitoring solutions for use in inflammable environment. Analytic based safety solutions are also provided for early detection of fire and smoke.
8. It has also deployed CCTV systems in Damodar Valley Corporation's (DVC) Koderma and Durgapur plants. Company has supplied a fully integrated analog system, wherein the feed from each of these cameras can be individually controlled and monitored from their respective sections, plus from the common plant areas.
9. The company has also supplied and installed a state-of-the-art IP CCTV-based video surveillance system for the Tata Motors plant at Rudrapur to protect the plant and its assets from pilferage and theft.
10. The company also bagged a contract from from Oil and Natural Gas Corporation (ONGC) worth more than Rs 40 crore which includes supply, commissioning, and maintenance of ONGC's captive very small aperture terminal (VSAT) based network. This network will be used to enhance the communication infrastructure of ONGC's Western India offshore sites.
11. Recently, Nelco and Telesat have successfully conducted their first in-orbit demonstration of high-speed broadband connectivity in India with Telesat's Phase 1 Low Earth Orbit (LEO) satellite, marking yet another milestone for bringing next-generation satellite communication technologies to the country. The satcom industry is set to see a massive growth following technology advancements, light-touch regulations and heightened demand in data services and the company is planning to offer commercial satcom services by 2024.
12. Tata’s Nelco will be providing In-flight Connection services to its group company, Air India’s customers through its partnership with satellite and communication service provider IntelSat. Nelco has already been offering the Aero IFC services for more than two years and now it plans to introduce these services to more airlines in collaboration with its global partners.
13. Nelco inked pact with Omnispace to enable and distribute 5G non-terrestrial network (NTN), direct-to-device satellite services which will expand the reach of 5G using satellite communication throughout India and South Asia.
14. Recently, GOI launched Indian Space Association (ISpA) which is a private industry body that will help to boost Space technology in India. ISpA will collaborate with ISRO and other agencies to focus on capacity building and Space economic hubs and incubators in India. OneWeb, Bharti Airtel, Mapmyindia, Walchandnagar Industries, Ananth Technologies Limited, Larson & Toubro, and Nelco (Tata Group) are the founding members, whereas Godrej, Hughes India, Azista-BST Aerospace Private Limited, BEL, Centum Electronics, and Maxar India are the core members of the Association.

In last 3 years the stock gave a return of 56.0 % as compared to the rise of Sensex and Nifty in the same period.

NELCO is the preferred partners for the Government, Defense and Enterprise sectors when it comes to security and surveillance in India and their solutions have been deployed at many places. It is one of India’s leading VSAT providers and holds licenses for VSAT, Internet Service Provider (ISP) as well as the Inflight & Maritime Communication (IFMC) issued by Department of Telecommunication, Government of India (DOT). Nelco’s agreement with Omnispace allows it to expand its services by including 5G satellite direct-to-device connectivity solutions for serving existing and new customers across South Asia, using the world’s first global 5G NTN network. Its In-flight network service is also first in class service in Indian market which provides the company an extra cushion for leading the space until other airlines announce the same services. Considering company’s strong fundamental, long-term contracts with various government and private entities and trust of Tata group company, the stock can be added to the portfolio for long term period.

 - HET ZAVERI​

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