Tata Group Stock Locked In 10% Upper Circuit; 3-Year Returns At 287%

Tata Group company scrip Nelco in Friday's session was locked in 10% upper circuit at Rs. 856.55 apiece on the NSE. Upper circuit in stock market parlance is the maximum price beyond which the scrip's price cannot increase in a day. Typically, stocks with many buyers no actual seller hit the upper circuit band.

Why sharp gains in Nelco?

On August 25, 2022, Nelco in the exchange filing informed of its tie-up with Intelsat Commercial Aviation for providing in-flight connectivity in India's airspace.

The filing by the company read, "Intelsat, operator of one of the world's largest integrated satellite and terrestrial network and leading provider of inflight connectivity (IFC), today announced the beginning of Intelsat's inflight connectivity services in Indian skies through an agreement with Nelco, India's leading satellite communication service provider.

"In addition to expanding our service coverage area for current customer airlines, our agreement with Nelco opens the possibility for Intelsat to serve India's domestic airlines," said Jeff Sare, president of Commercial Aviation at Intelsat. "This is a fast-growing airline market, and there is considerable untapped potential for IFC growth."

Intelsat's IFC service enables airline passengers a seamless at-home and in-office connectivity experience. Further, it allows an airline to differentiate itself, enhancing the passenger experience while driving passenger loyalty and optimizing flight operations.

"We are proud that Nelco has forged this relationship with in-flight connectivity pioneer Intelsat to offer Aero IFC services on their customer aircraft," said PJ Nath, managing director & CEO of NELCO. "As India's leading Satcom service provider offering best-in-class services, we are now creating a great opportunity through this relationship with Intelsat for further growth of our Aero IFC services in the country in the coming years - and we intend to be a leader in this market in India."

On Friday, the counter rose by Rs 77.85 or (10.00%) to Rs 856.65 per share on the BSE. Nelco is a multibagger stock that has yielded 80% return in the past one year. In two years, the stock clocked 296% return, while it gave around 850% return in the past five years. The scrip's 10-year return stands at 1675%. It rose over 30% in the past one month. The stock traded at 52-week high value of Rs 968.55 on October 19 last year, while it touched a year low of Rs 453.55 per share on October 26 in the previous year.

This agreement is welcome news for Intelsat's airline partners and flyers as they will enjoy endto-end broadband coverage on domestic and international aircraft flying to or from an Indian airport, as well as aircraft flying over the country, said Nelco in statement on Thursday

"In addition to expanding our service coverage area for current customer airlines, our agreement with Nelco opens the possibility for Intelsat to serve India's domestic airlines," said Jeff Sare, president of Commercial Aviation at Intelsat. "This is a fast-growing airline market, and there is considerable untapped potential for IFC growth."

Importantly, Nelco is a multibagger scrip with 1-year returns at 80% and in the last 3-years it has multiplied investors wealth by 287%.

Nelco is a small cap company with a m-cap of Rs. 1954 crore. The company's 52-week low and high are Rs. 198.25 and Rs.971.95, respectively. The company is a very small aperture terminal (VSAT) provider and offers network communications solutions. Its peer companies are Astra Microwave, Avantel, Railtel and ADC India among others.