Current/ Expected Orderbook/ Pending Orders?

As of September 30, 2022, the total EPC order book stands at about Rs 1,800 crores (Rs 1,500 crores external orders and balance internal). The EPC order book forms approximately 3.9 times the FY '22 EPC revenue, providing strong visibility for revenue growth over the next 2-3 years. Current EPC execution run rate is Rs 156 crores for the quarter with expectations of improved performance in the next two quarters. EPC revenue target for FY '23 is around Rs 600 crores. Expecting 20-30% growth in EPC revenue next year, i.e., Rs 750 crores and upward. Company aims to maintain or slightly increase t

Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or planned new fundraising through debt or equity in the transcript. The company has focused on reducing its gross debt by Rs 59 crores over the past 18 months, bringing net debt down to Rs 41 crores as of September 30, 2022. Debt-to-equity ratio improved to 0.19x from 0.30x, and credit ratings were upgraded (Acuite BBB stable and CRISIL BBB stable). The company emphasizes liquidity management through monetization of non-core assets (e.g., Aurangabad land parcel). No direct plans were stated regarding raising fresh capital via equity or debt; the foc

Any current/future capex/capital investment/strategic investment?

Vascon Engineers plans investments to grow its EPC business beyond the current Rs 1,000 crore execution capacity in about three years, requiring additional assets, capex, and senior staffing. The company is focusing on execution of EPC projects and real estate projects via joint ventures, avoiding large investments in land parcels. No immediate divestment plans for GMP Technical Solutions; expected to stabilize over the next 1-2 years before valuation and potential exit. They are working on launching several real estate projects and expect to share cash flow projections and cost structures soo

Future growth expectations in sales/revenue/volumes?

EPC revenue target for FY23 is around Rs 600 crores, with a planned 20-30% growth in FY24 to Rs 750 crores or more. Order book provides strong visibility of EPC revenue growth over the next 2-3 years, with a target to maintain or grow order book around Rs 1,500-2,400 crores. Real estate launches: Five projects expected to be launched within 12-18 months, targeting Rs 2,400 crores in sales value potential. Real estate revenue recognition expected mainly in FY25 and FY26 due to project completion and OC timelines, with cash flows starting earlier. Revenue from Ajanta project (Rs 230 crores) to b

Future growth expectations in earnings/operating earnings/profits/EPS?

EPC business targets Rs 600 crores revenue for FY23 with 20-30% growth to Rs 750 crores in FY24. Expectation of EBITDA margin over 10% in EPC and PAT moving towards 9-10% in FY24. Real estate revenue recognition will mainly occur in FY25 and FY26, with cash flows starting earlier. Real estate projects pipeline valued over Rs 2,000 crores expected to execute over next 4 years. Ajanta project Rs 230 crores to be launched over next three years, with 35%+ gross profit margin. Overall order book of Rs 1,800 crores (74% government projects) provides visibility of steady EPC revenue growth for 2-3 ye

Vascon Engineers LtdQ2 FY23Realty

Vascon Engineers Ltd Q2 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹30.16P/E: 24.6Market Cap: ₹699 CrSector: Realty

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

EPC revenue target for FY23 is around Rs 600 crores, with a planned 20-30% growth in FY24 to Rs 750 crores or more.
Order book provides strong visibility of EPC revenue growth over the next 2-3 years, with a target to maintain or grow order book around Rs 1,500-2,400 crores.
Real estate launches: Five projects expected to be launched within 12-18 months, targeting Rs 2,400 crores in sales value potential.
Real estate revenue recognition expected mainly in FY25 and FY26 due to project completion and OC timelines, with cash flows starting earlier.
Revenue from Ajanta project (Rs 230 crores) to be executed over next three years, with gross profits of ~35%.
Real estate and EPC expected to contribute jointly to growth over the medium term.
GMP expected to stabilize and see better performance over the next 4-6 quarters, with exit planned post stabilization and improved valuation.

Margin guidance

Category 3

EPC business targets Rs 600 crores revenue for FY23 with 20-30% growth to Rs 750 crores in FY24.
Expectation of EBITDA margin over 10% in EPC and PAT moving towards 9-10% in FY24.
Real estate revenue recognition will mainly occur in FY25 and FY26, with cash flows starting earlier.
Real estate projects pipeline valued over Rs 2,000 crores expected to execute over next 4 years.
Ajanta project Rs 230 crores to be launched over next three years, with 35%+ gross profit margin.
Overall order book of Rs 1,800 crores (74% government projects) provides visibility of steady EPC revenue growth for 2-3 years.
Company plans to stabilize and exit GMP for better valuation to focus on core strengths.
Dividend payout under board consideration after next two quarters based on cash flow and investments.

See what Vascon Engineers Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

There is no explicit mention of any current or planned new fundraising through debt or equity in the transcript.
The company has focused on reducing its gross debt by Rs 59 crores over the past 18 months, bringing net debt down to Rs 41 crores as of September 30, 2022.
Debt-to-equity ratio improved to 0.19x from 0.30x, and credit ratings were upgraded (Acuite BBB stable and CRISIL BBB stable).
The company emphasizes liquidity management through monetization of non-core assets (e.g., Aurangabad land parcel).
No direct plans were stated regarding raising fresh capital via equity or debt; the focus is on improving cash flow, reducing costly debt, and stabilizing businesses before considering divestments.
Future divestment of GMP Technical Solutions is expected in 1-2 years when valuation is more favorable, but not immediate fundraising.

Order book

Yes

As of September 30, 2022, the total EPC order book stands at about Rs 1,800 crores (Rs 1,500 crores external orders and balance internal).
The EPC order book forms approximately 3.9 times the FY '22 EPC revenue, providing strong visibility for revenue growth over the next 2-3 years.
Current EPC execution run rate is Rs 156 crores for the quarter with expectations of improved performance in the next two quarters.
EPC revenue target for FY '23 is around Rs 600 crores.
Expecting 20-30% growth in EPC revenue next year, i.e., Rs 750 crores and upward.
Company aims to maintain or slightly increase the order book by the end of FY '23.
Management targets order bookings of Rs 2,400 crores by next financial year.
EPC execution bandwidth currently supports Rs 1,000 crore annually; further growth beyond will require investments.

See what Vascon Engineers Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes

Vascon Engineers plans investments to grow its EPC business beyond the current Rs 1,000 crore execution capacity in about three years, requiring additional assets, capex, and senior staffing.
The company is focusing on execution of EPC projects and real estate projects via joint ventures, avoiding large investments in land parcels.
No immediate divestment plans for GMP Technical Solutions; expected to stabilize over the next 1-2 years before valuation and potential exit.
They are working on launching several real estate projects and expect to share cash flow projections and cost structures soon.
No specific large capex announcements were made during the call, but emphasis on steady growth and infrastructure expansion in EPC and monetization of non-core assets like Aurangabad land to support liquidity and reduce debt.

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