1. At a Glance
A bankrupt synthetic yarn company turns itself into a ₹4,700 Cr real estate REIT-that-isn’t, with 3 Mn+ sq. ft. of leased IT space, a 5% dividend yield, 80%+ operating margins, and ROE so spicy (60%) it makes startups jealous. Oh, and JP Morgan is a tenant. Mic. Drop.
2. Introduction with Hook
Imagine if instead of sweating over capex and sales targets, your entire business model was: “rent out buildings to rich tech bros and collect cash quarterly.” That’s Nirlon Ltd—once a dying industrials firm, now a luxury landlord for corporate India.
- ROE: 59.8%
- FY25 Net Profit: ₹218 Cr
- Operating Margin: 79%
Real estate redefined: no inventory, no receivables, no nonsense—just Grade-A office leases in Goregaon.
3. Business Model (WTF Do They Even Do?)
Nirlon Ltd owns and operates Nirlon Knowledge Park (NKP), a 23-acre commercial tech park in Mumbai. All five phases of the park have been fully leased—mostly to blue-chip multinationals. Think Google, JP Morgan, Morgan Stanley, and more.
Core Operations:
- License (long-term lease) of office space
- No construction or property sales
- Earn stable monthly revenue via structured license fees
Clientele:
- IT/ITES players
- BFSI companies
- Global MNCs with 10–15 year lease terms
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 573 | 603 | 636 |
| EBITDA (₹ Cr) | 458 | 477 | 503 |
| Net Profit (₹ Cr) | 158 | 206 | 218 |
| EPS (₹) | 17.5 | 22.8 | 24.2 |
| ROE | 48% | 60% | 59.8% |
| Dividend Yield | 4.7% | 4.9% | 5.0% |
TL;DR:
The business model is a cash cow with office leases locked for years. Profitability has become boringly consistent.
5. Valuation
At ₹523, the market treats Nirlon like a pseudo-REIT with a bonus of explosive ROE.
| Method | Fair Value Range |
|---|---|
| DCF (7% lease growth, 10% WACC) | ₹460 – ₹550 |
| P/E-based (18x – 22x) | ₹430 – ₹530 |
| Yield-based (5.5% yield target) | ₹440 – ₹490 |
Verdict:
Valuation is fair to slightly rich. But if you’re in it for the cash flows, it’s like owning a REIT without SEBI breathing down your neck.
6. What’s Cooking – News, Triggers, Drama
- Interest Rate Reset: HSBC revised green loan spread back to 233 bps—cost of debt going up.
- Upcoming Result: Q1FY26 due on August 11; expected to show continued rental growth.
- Dividend Pipeline: Final dividend to be fixed during upcoming AGM.
- Tenant News: Entire Phase V leased to JP Morgan for 10 years starting Dec 2021.
No Drama Alert:
The most dramatic thing here is a green loan rate being revised. Real estate has never been so… calm?
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity | ₹90 Cr | ₹90 Cr | ₹90 Cr |
| Reserves | ₹312 Cr | ₹283 Cr | ₹267 Cr |
| Borrowings | ₹1,145 Cr | ₹1,146 Cr | ₹1,146 Cr |
| Total Liabilities | ₹2,101 Cr | ₹2,126 Cr | ₹2,243 Cr |
| Fixed Assets | ₹1,932 Cr | ₹1,910 Cr | ₹1,870 Cr |
Highlights:
- High leverage, but stable interest coverage
- Low depreciation, low working capital
- Classic income-generating REIT-like structure
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash Flow |
|---|---|---|---|---|
| FY23 | ₹377 | ₹-90 | ₹-365 | ₹-79 |
| FY24 | ₹425 | ₹-51 | ₹-337 | ₹37 |
| FY25 | ₹480 | ₹-38 | ₹-332 | ₹110 |
Commentary:
Stable and rising cash from operations = dream. Most outflow is dividend payout and loan repayment. Net cash remains strong.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 22% | 28% | 30.1% |
| ROE | 48% | 60% | 59.8% |
| Cash Conversion Cycle | 2 days | 2 days | 2 days |
| Dividend Payout % | 148% | 114% | 107% |
Verdict:
This is what retirement portfolio dreams are made of. 2-day CCC, 60% ROE, and >100% dividend payout. That’s not a typo.
10. P&L Breakdown – Show Me the Money
| FY | Revenue (₹ Cr) | EBITDA (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | OPM (%) |
|---|---|---|---|---|---|
| FY23 | 573 | 458 | 158 | 17.5 | 80% |
| FY24 | 603 | 477 | 206 | 22.8 | 79% |
| FY25 | 636 | 503 | 218 | 24.2 | 79% |
Note:
When 80% of your revenue converts to operating profit, you don’t run a business—you own a fountain.
11. Peer Comparison
| Company | Sales (₹ Cr) | PAT (₹ Cr) | OPM % | ROE % | P/E | Dividend Yield |
|---|---|---|---|---|---|---|
| NESCO | 732 | 389 | 59.8% | 15.8% | 21.7x | 0.5% |
| CMS Info | 2,425 | 372 | 25.8% | 17.7% | 22.9x | 1.2% |
| Quess Corp | 14,967 | 201 | 1.7% | 10.4% | 23x | 3.2% |
| Nirlon | 636 | 218 | 79% | 59.8% | 21.6x | 4.97% |
Conclusion:
Nirlon crushes on margins, ROE, and dividend yield. Its only peer in structure is a REIT—but with less compliance.
12. Miscellaneous – Shareholding, Promoters
- Promoters: 67.72%
- FIIs: 11.98%
- DIIs: 3.71%
- Public: 16.58%
- Total Shareholders: 26,846
Noteworthy:
Promoter stake has been slightly reducing but still dominant. FII interest is sticky. Public float is healthy but not excessive.
13. EduInvesting Verdict™
Nirlon is the kind of stock you buy when you want to be bored. In a good way. There’s no product cycle, no retail wars, no input cost drama—just air-conditioned office parks and cheques that come in like clockwork.
The company has turned passive income into a public listing, giving retail investors a slice of the Goregaon commercial goldmine. If you want consistent cash flows, 5%+ yield, and zero operational volatility, this could be your financial nap zone.
Sure, it’s not flashy. But neither is compounding.
Metadata
Written by EduInvesting Research | 13 July 2025
Tags: Nirlon, Goregaon IT Park, Commercial Leasing, REIT Alternative, Passive Income Stocks, High Dividend, ROE Monster, Mumbai Real Estate
