Nelco Limited (NELCO) AI Stock Analysis

• Market Cap: ₹16.04B
• Dividend Yield: 0.13%
• Average Volume (3M): 13.81K
• Price to Earnings (P/E): 374.2
• Beta (1Y): 1.98
• Revenue Growth: -7.50%
• EPS Growth: -79.50%
• Country: IN
• Employees: 94
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): -0.52
• Shares Outstanding: 22,818,400
• 10 Day Avg. Volume: 6,725
• 30 Day Avg. Volume: 13,809
• PEG Ratio: -3.58
• Price to Book (P/B): 15.92
• Price to Sales (P/S): 6.68
• P/FCF Ratio: 658.92
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: ₹890.00 ▲(21.99% Upside)

Nelco Limited's overall stock score is primarily influenced by its financial performance and valuation. The company's financials show stability but highlight areas needing improvement, particularly in managing leverage and cash flow efficiency. The technical analysis suggests mixed signals with potential short-term weakness. Valuation concerns are significant, with a high P/E ratio and low dividend yield indicating potential overvaluation. These factors collectively result in a moderate overall stock score.

Positive Factors

Strong Gross Margins

Strong gross margins indicate effective cost management and pricing power, which can support profitability even in challenging markets.

Diverse Revenue Streams

Diverse revenue streams from multiple technology services provide resilience against market fluctuations and support long-term growth.

Innovation Focus

A focus on innovation helps Nelco stay competitive and adapt to technological changes, ensuring relevance in the rapidly evolving tech industry.

Negative Factors

Rising Debt Levels

Increasing leverage can strain financial stability and limit the company's ability to invest in growth opportunities, affecting long-term performance.

Declining Net Margins

Decreasing net margins suggest challenges in managing non-operational expenses, which can impact overall profitability and investor returns.

Operating Cash Flow Decline

Reduced operating cash flow limits the company's ability to fund operations and growth internally, potentially affecting long-term sustainability.

Nelco Limited Business Overview & Revenue Model

Company Description

Nelco Limited provides systems and solutions in the areas of very small aperture terminals (VSAT) connectivity, and integrated security and surveillance in India. It offers VSAT satellite communication services for renewable energy, enterprise, maritime, oil, energy, and gas sectors, as well as to bank ATM and branches. The company is also involved in the design, supply, installation, and maintenance of integrated security and surveillance solutions for application in industrial plants, power stations, broadcasting stations, telecommunications stations, airports, railways, seaports, and borders. In addition, it offers end to end networking solutions; and engages in the sale/rental of VSATs and maintenance of private hubs and hybrid networks. The company serves businesses and government institutions. The company was incorporated in 1940 and is based in Navi Mumbai, India. Nelco Limited operates as a subsidiary of The Tata Power Company Limited.

How the Company Makes Money

NELCO generates revenue through multiple streams, primarily from the sale of technology products and services. This includes hardware sales, software licensing, and cloud-based services which are billed on a subscription basis. Additionally, NELCO earns income from consulting and implementation services that assist clients in deploying and managing their technology solutions. The company also collaborates with strategic partners for joint ventures and projects, which contribute to its revenue through shared service agreements and collaborative sales efforts. Furthermore, NELCO may benefit from government contracts or grants that support specific technology initiatives, further bolstering its financial performance.

Nelco Limited Financial Statement Overview

Summary

Nelco Limited demonstrates a stable but challenged financial position. The income statement reveals strong gross margins but pressured net margins. The balance sheet indicates a need to manage debt levels more effectively to enhance financial health. Cash flow patterns suggest potential operational inefficiencies that need addressing. Overall, while the company is fundamentally sound, strategic improvements in leverage and cash flow efficiency are necessary to enhance financial performance.

Income Statement

Nelco Limited's income statement shows a mixed performance. The gross profit margin has been consistently strong, indicating effective cost management. However, the net profit margin has decreased significantly in the last reported year, suggesting challenges in managing non-operational expenses or increased tax burden. Revenue growth has been uneven, with fluctuations indicating market challenges or competitive pressures. Overall, profitability remains decent but with room for improvement in net margins.

Balance Sheet

The balance sheet presents a somewhat leveraged position, with a rising debt-to-equity ratio over the years. Despite this, the company maintains a healthy equity ratio, demonstrating good capital management. Return on equity has shown a declining trend, which could be a concern for investors seeking high returns. The company needs to address its leverage to improve financial stability and potential returns.

Cash Flow

The cash flow statement reflects a decline in operating cash flow over recent years, which could impact the company's ability to fund operations and growth internally. Although free cash flow has been positive, its growth rate has been inconsistent. The ratio of operating cash flow to net income indicates that not all earnings are translating into cash flow, suggesting potential inefficiencies or working capital challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.06B	3.05B	3.20B	3.13B	2.60B	2.26B
Gross Profit	2.29B	2.21B	2.32B	2.63B	1.56B	1.41B
EBITDA	435.00M	477.70M	621.30M	672.00M	553.20M	477.10M
Net Income	67.70M	95.30M	236.70M	198.50M	160.80M	123.60M
Balance Sheet
Total Assets	0.00	2.87B	2.82B	2.62B	2.63B	2.46B
Cash, Cash Equivalents and Short-Term Investments	138.50M	180.20M	217.90M	161.60M	156.50M	91.60M
Total Debt	0.00	525.10M	568.70M	631.00M	814.80M	896.20M
Total Liabilities	-1.28B	1.60B	1.58B	1.58B	1.74B	1.70B
Stockholders Equity	1.28B	1.28B	1.24B	1.05B	890.50M	757.80M
Cash Flow
Free Cash Flow	0.00	30.90M	256.60M	329.90M	314.50M	446.60M
Operating Cash Flow	0.00	196.60M	419.70M	580.80M	494.30M	539.60M
Investing Cash Flow	0.00	-165.40M	-192.20M	-249.30M	-160.80M	-75.60M
Financing Cash Flow	0.00	-110.60M	-200.40M	-326.40M	-196.00M	-470.30M

Nelco Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 729.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:NELCO, the sentiment is Negative. The current price of 729.55 is above the 20-day moving average (MA) of 726.46, below the 50-day MA of 790.07, and below the 200-day MA of 865.17, indicating a bearish trend. The MACD of -22.85 indicates Negative momentum. The RSI at 33.34 is Neutral, neither overbought nor oversold. The STOCH value of 10.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:NELCO.

Nelco Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SASKEN	64 Neutral	₹20.64B	52.48	―	1.83%	77.13%	-39.91%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
BCG	59 Neutral	₹19.82B	2.45	―	―	―	―
KERNEX	57 Neutral	₹21.05B	39.12	―	―	155.87%	―
NIITLTD	56 Neutral	₹11.41B	35.13	―	1.07%	12.25%	-28.69%
NELCO	54 Neutral	₹16.04B	374.21	―	0.13%	-7.50%	-79.50%
RAMCOSYS	52 Neutral	₹17.95B	207.55	―	―	20.41%	―