📌 At a glance:
NELCO Ltd, the Tata Power-backed satellite comms specialist, was once pitched as India’s answer to SpaceX’s ground team. But FY25 flipped the script — with net profit crashing 58% YoY and margins going the way of Doordarshan ratings. This isn’t a fraud. But it sure looks like a company whose orbit never achieved escape velocity.

🛰️ About the Company

• Name: NELCO Ltd (NSE: NELCO)
• Founded: 1940 (yes, pre-independence satellite dreams)
• Parent: Tata Power (owns 50.09%)
• Core Business: Satellite-based communication services
  • VSAT connectivity for remote industries
  • Defence and enterprise-grade network services
  • Surveillance & Satcom project integration

🛜 Basically, if your mining site in Jharkhand needs internet or the army wants a secure satellite link in Ladakh — NELCO steps in.

👨‍💼 Key Managerial Personnel (KMP)

🚨 But unlike ISRO launches, this boardroom hasn’t seen any take-off moments lately.

🧾 5-Year Financials (FY21–FY25)

📉 FY25 was a disaster:

• Revenue down → ₹305 Cr (vs ₹320 Cr)
• Profit cratered → ₹10 Cr (down 58%)
• EPS cut to ₹4.18 — like a bad telecom recharge plan
• ROCE fell from 23% to 14%

🧨 What Went Wrong?

1. Q4 FY25 Profit = -₹4.08 Cr
   → That’s right. They made losses in the March quarter after 12 straight quarters of profit.
2. Margins in freefall:
   OPM dropped to 9.54% in Q4 from ~20% in FY23.
3. No major orders or vertical breakthroughs
   → New contracts? Nope. Satellite upgrade? Nada. Even Starlink had more India buzz.
4. Inventory Days = 415 (!!)
   → Are they building satellites or hoarding routers?

🧮 EduInvesting FV Estimate (2027 Outlook)

• EPS FY25: ₹4.18
• Assume recovery to ₹7–₹9 EPS in 2 years
• Reasonable PE for SatCom biz: 25–30x (high risk, niche tech infra)

🎯 Fair Value Range (FY27E):
₹175 – ₹270

🔥 CMP = ₹898
Conclusion: Either valuation is from another planet, or the stock is priced like Starlink IPO hype… without the Starlink.

🧠 Business Segments

• VSAT Networks: Core revenue stream (connectivity for ATMs, oil rigs, ports, etc.)
• Security & Surveillance: Integrated solutions for Defence and PSUs
• Satcom Projects: B2G and B2B contracts

📡 Nelco isn’t just a dumb cable company — it offers mission-critical infra, but lacks scale.

📉 Peer Comparison

💣 Verdict: NELCO is nowhere near a growth stock, but priced like it’s launching satellites into Mars.

🧠 EduInvesting Take

“NELCO is what happens when a Tata company has potential but no budget, no buzz, and no broadband.”

You keep expecting a breakout year, and then… another AGM with PowerPoint slides on ‘potential’.

They have:

• Decent infra
• Tata credibility
• Steady B2G clients

But they lack scale, breakout innovation, and pricing power.

👽 It’s stuck between being too small for serious infra investors, and too boring for retail bulls.

⚠️ Risks & Red Flags

• ⚠️ P/E > 200 with collapsing profits = 🤯
• ⚠️ Zero FII interest — holding just ~5%
• ⚠️ Business remains project-based → volatile topline
• ⚠️ Margins now in single digits → tough recovery
• ⚠️ Shareholding hasn’t moved in 3 years → even Tata Power doesn’t want more of this

🏁 Final Verdict

“NELCO is the stock equivalent of ISRO’s budget: great legacy, heroic goals, zero juice.”

🚀 If they partner with Starlink or roll out pan-India satellite broadband? It’s a multibagger.

But till then?
It’s just another space-themed stock with earth-level earnings.

Tags: NELCO stock review 2025, Tata satellite company, VSAT stocks India, defence connectivity stocks, low profit high P/E stocks, satellite communication India, Tata Power subsidiary

Author: Prashant Marathe
Date: June 9, 2025