Check Before You Invest : Nelco Ltd

Snapshot

Q.1 Which industry/sub-sector does Nelco Ltd belong to?

Nelco Ltd belongs to the Consumer Durables sector, operating specifically within the IT - Hardware segment.

Q.2 Is Nelco Ltd a good quality company?

Nelco Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Nelco Ltd undervalued or overvalued?

Nelco Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Nelco Ltd a good buy now?

Nelco Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Nelco Ltd?

Nelco Ltd revenue growth is -7.7% for FY-2025, which is below its 5-year CAGR of 39.93%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of Nelco Ltd?

Nelco Ltd Return on capital employed is 18.26% for FY-2025, which is in line with its 5-year historical median of 18.32%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.3 Return on Asset of Nelco Ltd?

Nelco Ltd Return on Asset is 5.1%, which is in line with its 5-year historical median of 5.1%, indicating stable asset utilization efficiency.

Q.4 Return on Equity (ROE) of Nelco Ltd?

Nelco Ltd Return on equity is 8.17% for FY-2025, which is below its 5-year historical median of 14.42%, indicating the business is making worse use of its shareholders capital.

Q.5 Cash conversion cycle of Nelco Ltd?

Nelco Ltd Cash conversion cycle is 40 days, above its 5-year historical median of 30 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	1.07	1.07
ROE	8.17	14.42
ROCE	18.26	18.32
Cash Conversion Cycle	40 days	30 days

Q.6 Gross Profit margin of Nelco Ltd?

Nelco Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.8% for FY-2025, which is in line with its 5-year median of 15.8%, indicating stable margins.

Q.7 Operating Profit Margin of Nelco Ltd?

Nelco Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.89% for FY-2025, which is below its 5-year median of 17.8% indicating decreasing margins.

Q.8 Net Profit Margin of Nelco Ltd?

Nelco Ltd Net Profit Margin is 4.77% for FY-2025, is below with its 5-year median of 7.14%, indicating decreasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	15.8	15.8
Operating Profit Margin	14.89	17.8
Net Profit Margin	4.77	7.14

Q.9 Debt to Equity ratio of Nelco Ltd?

Nelco Ltd Debt-to-Equity ratio is 0.00, which is lower with the industry average of 0.53, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Nelco Ltd?

Nelco Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Nelco Ltd?

Promoters hold 50.09% of the Nelco Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Nelco Ltd vs industry peers?

Nelco Ltd revenue CAGR is 39.93%, compared to the industry median CAGR of 12.66%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	-7.7	12.7
Gross Profit Growth	-23.3	29.1
Operating Profit Growth	-29.6	33.6
Net Profit Growth	-52.4	34.8

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	1.07	0.71
ROE	8.17	6.95
ROCE	18.26	7.84
Cash Conversion Cycle (days)	40.3	70

Valuation & price assessment

Q.1 Stock return of Nelco Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 22% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	22%	28.5%	4.4%	-13.1%

Q.3 Valuation ratios of Nelco Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	263.55	136.20	36.44
Price to Book	12.72	16.48	1.97
Price to Sales	8.12	9.50	2.97
EV to EBITDA	64.79	54.18	15.45

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