Nelco Ltd

Meeting Details

• Meeting date: 19 October 2026.
• Purpose: consider unaudited standalone and consolidated results for quarter and six months ended 30 September 2026.

Key Agenda Items

• Consider unaudited standalone financial results for quarter and six months ended 30 September 2026.
• Consolidated financial results for quarter and six months ended 30 September 2026.

Other Notes

• Trading window closed from 24 September 2026 until 48 hours after results declaration.

Nelco Ltd: Trading window closed between 24th September 2026 till the 48 hours after the financial results for the quarter and six months period ended 30th September 2026 are declared to the Stock Exchanges (both days inclusive).

Rating Action & Ratings

• Total bank loan facilities rated: Rs 218.3 crore.
• Long-term rating: Crisil A / Watch Developing; Outlook revised from Stable.
• Short-term rating: Crisil A1 / Watch Developing.
• Ratings placed on Rating Watch with Developing Implications.

Rationale & Key Drivers

• Rs 191 crore Lunar investment funded by eight-year debt; first four years interest-free.
• Investment may confer distribution rights for Lunar in India/South Asia.
• Strong niche satcom position; ~40% revenue share in FY2026; healthy visibility.
• Liquidity strong: cash ~Rs 20 crore; expected cash accrual ~Rs 30 crore in FY2027.
• EBITDA margin 9.5% in FY2026; TOLANW 1.50x; adjusted gearing 0.59x.
• Tata group holds ~50% stake; provides financial flexibility.

Operational & Financial Profile

• Revenue largely recurring from bandwidth/services (65-70%); churn 3-5%.
• Debtors/working capital higher; regulatory/tech risks persist; DoT licensing dependence.

Outlook & Material Changes

• Outlook revised from Stable to Watch Developing for the long-term rating.
• Watch action driven by Lunar deal; resolution depends on regulatory/commercial implications.

Ratings Sensitivities

• Upward: scale expansion and reduced external liabilities (TOLTNW < 1.5x).
• Downward: gearing > 2x or weaker cash flows; Tata ownership change.

Key Financial Highlights

• FY2026 revenue Rs 307 crore; PAT Rs 3 crore; PAT margin 1.0%.
• FY2026 EBITDA margin 9.5% (FY2025: 13.8%).
• Debt/adjusted net worth 0.59x; interest coverage 6.8x.
• FY2025 revenue Rs 306 crore.

Strategic partnership and investment

• Nelco to partner with Elveo Mobile to enable next-generation D2D connectivity from space.
• Nelco to invest in Elveo and collaborate across automotive, maritime, energy and government segments.
• Partnership expands Nelco's footprint in India and South Asia with D2D and IoT capabilities.
• Elveo's network and onboard processing to support enterprise-grade solutions including telemetry and monitoring.
• SES becomes strategic investor in Elveo as part of the collaboration.

Acquisition overview

• Target is Lunar Holdco, Inc., doing business as Elveo Mobile, a Delaware satellite comms company.
• Turnover not disclosed; Lunar is pre-revenue until constellation deployment.
• Not a related party transaction; no promoter/group interest.
• Industry: NGSO satellite, D2D, IoT, and Mobile Satellite Services.
• Strategic investment to enable D2D/IoT services in India and beyond.
• Regulatory approvals: India telecom/satellite licenses required; auto-route investment; filings pending.
• Timeline: completed on August 17, 2026 via CCD subscription totaling USD 20 million.
• Consideration: cash via subscription to Compulsorily Convertible Debentures (CCDs).
• Cost: USD 20 million via CCDs carrying 7% annual compounded return, convertible to equity.
• Ownership: percentage not determinable; no control conferred upon conversion.
• Background: Lunar formed Jan 27, 2026; pre-revenue; backed by SES; markets in US, Europe, LatAm, Africa, Asia.

Board outcome

• Board approved and took on record unaudited consolidated and standalone results for quarter ended 30 June 2026.
• Results will be published in the prescribed format.
• Auditors' review observed no material misstatement in the results.

Cost auditors

• Board reappointed P.D.Dani & Associates as Cost Auditors for FY 2026-27.

Meeting Details

• Board meets 16 July 2026 to consider unaudited standalone/consolidated results for quarter ended 30 June 2026.

Other Notes

• Trading window closed from 24 June 2026 until 48 hours after results are declared.

Dematerialisation details furnished

• Details of securities dematerialized during the period furnished to stock exchanges where shares are listed.