Vascon Engineers Ltd (VASCONEQ) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, this is the operator. I'm here for an announcement. We will begin this conference in the next 2 to 3 minutes. Thank you.
Moderator: Ladies and gentlemen, good day, and welcome to Vascon Engineers Limited Q2 and H1 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask a question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Akhilesh Gandhi from Stellar Investor Relations. Thank you, and over to you, Mr. Gandhi.
Akhilesh Gandhi (Stellar Investor Relations): Thank you, Sid. Good afternoon, everyone. I, Akhilesh Gandhi, on behalf of Stellar Investor Relations, welcome you all to Vascon Engineers Q2 and H1 FY '27 earnings conference call. Today, we shall be sharing the key operating and the financial highlights for the second quarter and the half-year ended on September 30th, 2026. We have with us the senior management team of Vascon Engineers. Mainly, we have Mr. Santosh sir, he's our Group CEO. With him, we have Mr. Somnath sir, he's our Chief Financial Officer. And with him, we also have Mr. Ravi sir, he's our Chief Executive Officer for Real Estate segment. But before we begin, I would like to state that this call may contain some of the forward-looking statements, which are completely based upon the company's beliefs, opinions, and expectations as of today. The statements made in today's call are not a guarantee of future performance and also involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect development that occur after the statement is made. Documents relating to the company's financial performance, including the investor presentation, have already been uploaded uploaded on the stock exchange. With that, I now invite Dr. Santosh Sundararajan to state his opening remarks on the company's performance for the second quarter and the half year ended on September 30th, 2026. Post that, we'll open the floor for Q&A session. Thank you, and over to you, sir.
Santosh Sundararajan (Vascon Engineers Ltd): Thank you. Good afternoon, everyone, and welcome to Vascon Engineers' Q2 and H1 FY '27 earnings conference call. Thank you for joining us today. I hope you've had an opportunity to review our financial results and the investor presentation, which are available on the stock exchange as well as the company's website. As we progress through FY '27, our focus remains on accelerating project execution, strengthening our order book, and improving cash flow efficiency, and driving sustainable growth across our EPC and real estate business. Coming to our EPC business, EPC continues to remain the cornerstone of Vascon's growth journey. As of September 30, 2026, our total EPC order book stands at approximately 3,400 crore, comprising an external order book of 3,215 crores and an internal order book of 185 crores. This represents approximately 3.7 times our FY '26 EPC revenue, providing strong revenue visibility. Our external order book has increased from 2,387 crores at the end of FY '26, with government projects accounting for approximately 63% of the order book. During H1 FY '27, we secured several significant orders, including the Qualcomm IT Park project in Bangalore worth 660 crores including taxes, along with the project, a project from RBI and SBI, and a government hospital in Wardha. With approximately Rs 1,200 crore of new EPC orders already secured, we remain focused on achieving our FY '27 order inflow target of anywhere between 1,500 to 2,000 crores. Coming to project execution, we witnessed a strong recovery during Q2 FY '27, supported by improving fund inflows in two major government projects that had faced cash flow constraints during Q1 FY '27.
Santosh Sundararajan (Vascon Engineers Ltd): representing nearly 70% growth quarter-on-quarter. With improving execution conditions and newly secured projects expected to contribute meaningfully from Q3 onwards, we remain confident of building stronger execution momentum. Moving to our real estate business, we continue to witness encouraging progress supported by healthy sales bookings, new project launches, and strength strengthening internal capabilities. During H1 FY '27, we achieved a total booking value of Rs. 152 crores, comprising Rs. 66 crores in Q1 FY '27 and Rs. 86 crores in Q2 FY '27, compared to approximately Rs. 100 crores for the entire FY '26. We also recorded new sales booking of approximately 68,571 square feet with total collections of around Rs. 43 crores. Our recently launched project, Tranquil Heights in Powai, witnessed healthy traction with Rs. 58 crore of booking across 36 units during Q2 FY '27, taking cumulative bookings to approximately Rs. 75 crore. Similarly, Orchids in Santacruz West recorded bookings of Rs. 25 crore during the quarter, taking the cumulative bookings to Rs. 112 crore. Together, these two projects contributed approximately Rs. 83 crore of the total Rs. 86 crore booking value during Q2 FY '27. We have also made progress on the Prakash CHS in Santacruz West, with all key approvals, including IOD, CC, and RERA having been received. Bhoomi Pujan has been recently completed, and the pre-launch activities are underway. Our strategy remains focused on asset-light redevelopment and selective JV and JDA opportunities across Mumbai and Pune, supported by disciplined capital allocation. We remain focused on achieving our indicative FY '27 sales booking target of Rs. 250 to Rs. 350 crores while progressing towards our long-term ambition of annual annual sales value of Rs. 1,200 to Rs. 1,500 crore by FY '30-'31. Coming to our financial performance, for Q2 FY '27, the company reported consolidated revenue from operations of approximately Rs. 252 crore, registering a growth of nearly 12% year-on-year. EBITDA stood at approximately Rs. 23 crore, registering a growth of around 18% year-on-year, while PAT increased by approximately 14% to Rs. 13 crores. The quarterly performance reflects a recovery in EPC execution and continued operational efficiencies. For H1 FY '27, consolidated revenues stood at approximately Rs. 404 crores compared to Rs. 447 crore in the corresponding period last year. EBITDA stood at approximately Rs. 33 crore compared with Rs. 53 crore in the corresponding period last year. Importantly, H1 FY '26 included a one-10th gain of approximate, one-time gain of approximately Rs. 17 crore from a sale of investment. Excluding this, the underlying EBITDA performance remained relatively resilient. Profit after tax stood at approximately Rs. 15 crore compared to Rs. 34 crore in H1 FY '26. At the segment level, EPC reported EBITDA of approximately Rs. 41 crore compared to Rs. 39 crore last year, with margins improving a bit from approximately 10% from from the previous 9% last year, reflecting a healthy operating profitability. From a balance sheet perspective, net debt stood at approximately Rs. 156 crore as of September 30, 2026. We remain focused on optimizing our funding structure and strengthening cash flow efficiency. Looking ahead, we remain optimistic about the opportunities across both our businesses. In EPC, our strong order book, improving execution momentum, and strengthened working capital position provide a healthy foundation for future growth. In real estate, the increasing sales traction, upcoming project launches, and enhanced internal capabilities position us well for sustainable expansion. Our priorities remain: accelerating execution, converting our strong order book into revenue, improving cash flows, and scaling our real estate business in a disciplined manner. We remain committed to delivering sustainable growth, improving profitability, and creating long-term value for our stakeholders. With that, I would like to thank everyone for joining us today. We can now open the floor for questions. Thank you.
Moderator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press "*" and "1" on their touchtone telephone. If you wish to remove yourself from the question queue, you may press "*" and "2". Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: a reminder to all the participants that you may press * and 1 to ask a question. The first question comes from the line of Himanshu Upadhyay from Steadview. Please go ahead.
Himanshu Upadhyay (Steadview): Yeah, hi. Good afternoon. I had this question on Orchids, okay? The presentation states that we have sold 10 units, but the realization has fallen from 37,000 to 32,000. And what would be the reason for that, because the project is now nearing completion and such a big fall in the realizations?
Ravi (Vascon Engineers Ltd): Huh, so what we have done is at the in Ganpati, around Ganpati we had, at this at that point of time we were about I think we were at the sixth slab and going into the seventh slab. So that time we had run an investor scheme wherein people could pay upfront 95% and avail a discount on it. So, we sold it at about 31-32 on an average on that. So, that's why the price has dropped, but the collections for that is due by November. So, in the October, November, December quarter, you would see a significant cash flows coming in for that.
Himanshu Upadhyay (Steadview): Okay, so the let's say out of 25, around 22 crores will come in in next month?
Ravi (Vascon Engineers Ltd): Yeah, actually in October I think we've already recognized about eight to nine of that and the remaining of it will also come in in the next. Basically, it's Dussehra, Diwali, we wanted to expedite the collections to push constructions because we are we are heavily pushing whatever cash flows we are receiving from both into debt repayment as well as into construction. So that's the reason that we pushed.
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