Vascon Engineers Ltd

Ratings assigned

• Long-term facilities rating: CRISIL BBB+/Stable.
• Short-term facilities rating: CRISIL A2.

Rating agency

• Rating agency: CRISIL Ratings Ltd.

Rationale

• Rationale not provided in the excerpt.

Outlook

• Outlook: Stable for the long-term rating.

Financial Performance

• Consolidated revenue INR 152 crores in Q1 FY27 vs INR 221 crores Q1 FY26
• Consolidated EBITDA INR 10 crores; Q1 FY26 had INR 34 crores
• Excluding onetime gain, Q1 FY26 EBITDA ~INR 15 crores
• EBITDA margin ~6% in Q1 FY27; broadly in line with Q1 FY26
• PAT INR 2 crores; Q1 FY26 PAT INR 22 crores
• EPC revenue INR 148 crores; EBITDA INR 13 crores; EPC margin ~9%
• Real Estate revenue INR 4 crores; EBITDA loss INR 4 crores
• Net debt INR 152 crores as of June 30, 2026
• SANCTIONED banking limits INR 760 crores; unutilised INR 355 crores

Operating Update

• EPC order book stands at INR 2,850 crores; external 2,531; internal 319
• RBI Colony order secured for INR 295 crores; LOI of INR 126 crores for Wardha hospital
• Adani Infra India engagement expected to support future EPC inflows

Balance Sheet & Cash Flow

• Net debt of INR 152 crores as of 30-Jun-2026
• Banking limits provide liquidity headroom to mobilize resources

Projects & Capex

• Real estate: booking value FY26 INR 113 crores; Q1 FY27 INR 66 crores
• New real estate bookings: ~30,690 sq ft; collections INR 20 crores
• Orchid Santacruz: cumulative bookings INR 87 crores; Q1 FY27 INR 38 crores
• Launched Tranquil Heights in Powai; Prakash in Santacruz West approvals; launch soon
• Pipeline: Tower of Future (Baner/Pashan) and Ajanta redevelopment in Kharadi; ~1.74 mn sq ft; ~INR 2,000 crores sales value; Vascon ~INR 1,000 crores

Outlook & Guidance

• FY27: target INR 1,500–2,000 crores of new EPC order intake
• Long-term ambition: real estate annual bookings INR 1,200–1,500 crores by FY31

Q&A Highlights

• Bihar Supaul and Sindhudurg EPC projects back on track; ramp-up in 1–2 months
• Royal Rides ropeway project: no revenue this year; project stalled awaiting client progress
• Coimbatore and TOA OC targeted in H2 FY27; Orchid Santacruz OC also targeted this year
• Reliance order canceled mutually due to design changes; not canceled outright
• Adani Infra India collaboration expected to bolster future EPC inflows

Risks & Watchpoints

• Execution timing remains a key risk; two major projects caused near-term delays
• Working capital cycle extended to ~65–70 days from ~45 days; normalization contingent on project progress
• Reliance/Ropeway projects' future scope and timelines uncertain

Order details

• Awarding entity: Executive Engineer, Public Works Department, Arvi Division, Wardha Nagpur (Maharashtra)
• Nature and scope: Development of 300-bed general hospital at Wardha Nagpur, Maharashtra
• Contract value: Rs.126.39 crore excluding GST
• Domestic entity
• Execution period: 24 months from receipt of order
• Contract type: Item Rate Basis
• Promoter interest: None
• Related party transactions: Not within related party transactions

Business Overview

• EPC and real estate development focused on mid-market Mumbai and Pune projects.
• 40 years of experience; 225+ EPC projects; ~45 million sq ft delivered.
• In‑house design and engineering enable turnkey execution and premium margins.
• Covers government and private sector contracts with visible cash flow.

Operational Highlights

• Total order book at ₹2,850 crore; external EPC book ₹2,531 crore.
• New CPWD orders for RBI Colony in Guwahati worth ₹295 crore.
• Launched Tranquil Heights, Powai; positive initial market response.
• Q1 FY27 real estate bookings: 30,690 sq ft; booking value ₹66 crore.

Financial Performance

• Standalone Q1FY27 revenue ₹151.88 Cr; EBITDA ₹9.73 Cr; EBITDA margin 6%.
• PAT ₹1.93 Cr; Consolidated PAT ₹2.00 Cr.
• EPC revenue ₹148 Cr; RE revenue ₹4 Cr in Q1FY27.
• Total debt ₹338.8 Cr; net debt ₹151.7 Cr; cash ₹187.0 Cr; Lien FD ₹149.8 Cr.

Capital Structure & Liquidity

• Sanctioned working capital ₹760 Cr; utilised ₹405 Cr; unutilised ₹355 Cr.
• Unutilised limits support ₹3,000 Cr additional orders; execution run-rate secured.
• Collateral optimisation unlocked incremental working capital; stronger lender relationships.
• Total cash & bank ₹187.0 Cr; net debt ₹151.7 Cr; Lien FD ₹149.8 Cr.

Strategic Priorities & Outlook

• Aim to secure ₹1,500-2,000 Cr of new EPC orders in FY27.
• Real estate debt optimization to improve liquidity and funding flexibility.
• Project execution acceleration to boost revenue and profitability.
• FY30–FY31E revenue target ₹1,200–₹1,500 Cr.

Risks & Mitigation

• Q1FY27 execution shortfall due to cash flow constraints on two government projects.
• Collateral optimisation and stronger bank support to mitigate liquidity risk.

Governance & Leadership

• Company Secretary Neelam Pipada is Compliance Officer.
• No governance changes announced.

Financial results approved

• Unaudited standalone and consolidated results for quarter ended 30 June 2026 approved.
• Limited Review Reports from Sharp & Tannan Associates issued with unmodified opinion.
• Audit Committee reviewed and recommended the results before Board approval.
• Period covered: quarter ended 30 June 2026.

Capital action approved

• Preferential issue of 2 crore convertible warrants at ₹40 per warrant approved.
• Warrants convertible into equity within 18 months from allotment.
• Allotment to Siddharth Vasudevan Moorthy and Pratik Saraogi.
• 25% of the issue money received to date.
• Extraordinary General Meeting held on 18 May 2026 approved the resolution.

Divestment and consolidation status

• Divestment of ACL and MRPL; abeyance due to transferee dispute.
• Company relinquished control; ceased consolidation from relinquishment date.
• Management states matter under review; appropriate action to follow.

Auditor notes and emphasis

• Emphasis of Matter: divestment noted; LR conclusions not modified.
• Non-review of three subsidiaries and five joint ventures deemed immaterial to the group.
• Auditor reports dated August 12, 2026.

Meeting Details

• Friday, August 14, 2026 at 11:30 AM IST.
• Earnings conference call (group), conducted virtually.
• Event: Q1FY27 Earnings Call.
• Key participants: Whole Time Director & CEO - Real Estate; CFO; Group CEO.
• Purpose: discuss unaudited quarterly results for quarter ended June 30, 2026.
• Invite with dial-in details will be available on the company's website.

AGM Details

• AGM held on 07-Aug-2026; hybrid physical meeting with remote e-voting and venue voting.
• Record date for voting fixed at 31-Jul-2026.
• Notice published July 17, 2026.

Key Resolutions

• Item 1: Adopt standalone and consolidated financial statements for year ended 31 March 2026.
• Item 2: Re-appoint Dr. Santosh Sundararajan as Director liable to retire by rotation.
• Item 3: Ratify remuneration of Cost Auditors for year ending 31 March 2027.
• Item 4: Re-appoint Sankaramahalinlam Balasubramanian as Non-Executive Independent Director.
• Item 5: Appoint Divya Maneklal Shah as Non-Executive Independent Director for five years.
• Item 6: Approve material related party transactions with Vascon Developers LLP.

Voting Results

• Item 1 passed; in-favour 99.99%, against 0.01%, abstained 34,980.
• Item 2 passed; in-favour 99.97%, against 0.03%, abstained 150.
• Item 3 passed; in-favour 99.98%, against 0.01%, abstained 150.
• Item 4 passed; in-favour 99.98%, against 0.01%, abstained 0.
• Item 5 passed; in-favour 99.98%, against 0.02%, abstained 150.
• Item 6 passed; in-favour 97.57%, against 2.43%; related party votes treated as invalid; abstained 150.

Dividend

• No dividend proposed or declared.

Director Changes

• Dr. Santosh Sundararajan reappointed as Director liable to retire by rotation.
• Sankaramahalinlam Balasubramanian reappointed as Non-Executive Independent Director.
• Divya Maneklal Shah appointed as Non-Executive Independent Director for five-year term.

Auditor Matters

• Remuneration of Cost Auditors ratified for financial year 2027.

Material Related Party Transactions

• Approval of material RPT with Vascon Developers LLP; value not disclosed.

Other Approvals

• No other material approvals disclosed in AGM.