Vascon Engineers Limited — Investor Presentation 2019

Feb 13, 2019

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Date: February 13, 2019

To, To, National Stock Exchange of India Limited, BSE Limited, Listing Department, The Department of Corporate Services Exchange Plaza, Phiroze Jeejeebhoy Towers, Dalal Street, Bandra (E), Mumbai – 400 051 Fort, Mumbai 400 001 Ref Symbol: VASCONEQ Ref: Scrip Code: 533156

Subject: Presentation Update

Dear Sir/ Madam,

Please find enclosed Presentation by the Company Post Board meeting.

This is for your information and records.

Thanking you,

For Vascon Engineers Limited, Digitally signed by DANI VIBHUTI D DN: c=IN, o=Personal, DANI postalCode=380004, st=GUJARAT, serialNumber=5ffb5233027b6a065fdafd4 bd57df381e1b2a60176f5d2a643ce63e26 VIBHUTI D Vibhuti Dani 1d7c0a3, cn=DANI VIBHUTI D Date: 2019.02.13 15:12:25 +05'30' Company Secretary and Compliance Officer

Enclosures: as above

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This document is signed electronically

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VASCON ENGINEERS INVESTOR PRESENTATION | FEBRUARY 2019

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DISCLAIMER

• This presentation and the accompanying slides (the “Presentation”), which have been prepared by Vascon Engineers Limited ( the “Com p an y ” ), have been p re p ared solel y f or in f ormation p ur p oses and do not constitute an y o ff er , recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company.

• Thi s P resen t a ti on h as b een prepare d b y th e C ompany b ase d on i n orma f ti on an d d a t a w hi c h th e C ompany cons id ers re li a bl e, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded.

• Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and collectively forward‐looking statements. Such forward‐looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and o f t h e econom es o i f var ous i i nternat ona i l mar k ets, t h e per ormance o f f t h e rea l estate & i n f rastructure i n d ustry i n I n di a an d world‐wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation . The Company assumes no obligation to update any forward ‐ looking information contained in this Presentation . Any forward‐looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.

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K D l t & ey eve opmen Financial Highlights

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KEY HIGHLIGHTS – 9MFY19

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R s 877 Cr R s 719 Cr R s 158 Cr Total Order Book External Orders Internal Orders EPC Business R s 226 C r r O d er nta I k e n i 9MFY19 N ew S a e l b oo ki ng o f 3 28 667, , sqft f or a t o t a l sa es l Real Estate Business value of Rs 194 Cr in 9MFY19  Sale of Amenity plot along with school building for total consideration of Rs 36.50 Cr Non Core Assets  Sa el of land parcel at B a ewa l di , B aner f or tota l consideration of Rs 100 Cr (Vascon share Rs 13.10 Cr )

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P&L HIGHLIGHTS- STANDALONE

					9M FY19 (with out Ind AS 115) 9M FY19 9M FY18 FY18
	Particulars (Rs. Cr)	Q3 FY19 (with out Ind AS 115)	Q3 FY19	Q3 FY18	9M FY19 (with out Ind AS 115) 9M FY19 **9M **
	Revenue Other Income	85.83 82.13 93.51 7.74 7.74 1.74			258.32 245.66 229 23.84 23.84 8.	.49 335.35 98 24.06 .47 359.41
	Total Income	93.57 89.87 95.25			282.16 269.50 238
	Construction Expenses / Material Consumed	58.44 54.46 67.17			189.79 179.51 162
	Employee Cost Other Expenses	10.28 10.28 13.00 8.42 8.42 6.89
	EBITDA EBIDTA Margin (%)	16.43 16.71 8.19 18% 19% 9%			32.63 30.25 25. 12% 11% 11	95 38.29 % 11% 5 752
	Diti	213 213 195			601 601 5
	eprecaon Finance Costs Profit Before Tax Tax	. . . 6.62 6.62 3.78 7.68 7.96 2.46 ‐0.03 ‐0.03 ‐			. . . 16.92 16.91 15. 9.70 7.323 5. ‐1.02 ‐1.02 ‐	. 05 19.36 45 11.41 0.02
	Profit After Tax	7.71 7.99 2.46			10.72 8.35 5.
	Other Comprehensive Income Total Comprehensive Income	‐0.15 ‐0.15 0.11 7.56 7.84 2.57			‐0.36 ‐0.36 0. 10.36 7.99 5.

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SEGMENTAL PROFIT & LOSS - AFTER ALLOCATION

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RE Total
Particulars (Rs. Cr) (without effect RE # EPC ## Inventorised Total (without effect
for Ind AS 115) for Ind AS 115)
Revenue 51.37 38.71 250.88 289.59 302.25
Other Income 5.02 5.02 19.28 24.30 24.30
Total Income 56.39 43.73 270.16 ‐ 313.89 326.55
Cost of Sales 36.82 26.54 188.25 5.61 220.40 230.68
Gross Profit 14.55 12.17 62.63 69.19 71.57
Gross Profit Margin % 28% 31% 25% 24% 24%
Employee Cost 16.79 16.79 18.37 35.16 35.16
Other Expenses 14.59 14.59 13.26 27.85 27.85
EBITDA ‐11.81 ‐14.19 50.27 30.48 32.85
EBIDTA Margin (%) 20% 11% 11%
Depreciation 0.90 0.90 5.20 6.10
6.10
EBIT ‐12.71 ‐15.09 45.07 24.38 26.76
EBIT Margin (%) 18% 8% 9%
Finance Costs 16.98 16.98
Profit Before Tax 7.41
9.79
Tax ‐0.94 ‐0.94
Profit After Tax 8.35 10.73
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# IT INCLUDES REVENUE & EXPENSES RELATED TO AJANTA ENTERPRISE & PHOENIX VENTURES, IN FINANCIALS SHARE OF PROFIT IS TAKEN (AS PER IND AS ) ## IT INCLUDES INTERNAL EPC ORDER REVENUE AND CONSTRUCTION EXPENSES

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VASCON – AT PRESENT

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ENGINEERING PROCUREMENT & CONSTRUCTION

One of the leading EPC Company in India

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REAL ESTATE DEVELOPMENT

Focus on Affordable Housing

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E i i ng neer ng Procurement & Construction

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EPC BUSINESS

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• Construction Experience across various verticals

• Executed over 200 projects with construction area of over 50 msft

 Ability to execute around 8 msft per annum

• Currently executing around 3 msft p a. . – operating at 40% utilization

• Number of Personnel in Project / Engineering team ‐ 489

• Higher margins Because of Turnkey Capabilities

• In‐house Design and Engineering team

• Ability to demand premium over other construction companies

 New Orders Target

• Focus on Affordable Housing

• Focus on large and high value civil contracts by Government Agencies and reputed Private Companies

• Generate positive cash flows from all the projects and re‐invest to drive growth

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CONSISTENT ORDER INTAKE

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External
Opening Order
External Book
Order STRONG ORDER INTAKE OF ~RS 226
Book
CR IN 9M FY19
719
508
220
190
97
80 70
82236
FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Current Order
Book
EXECUTION OF NEW ORDERS TO IMPROVE REVENUE & CAPACITY UTILISATION…
LEADING TO BETTER OPERATING MARGINS
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EXISTING ORDER BOOK

	Project Location Amt(Rs. Cr) External Order book Adhiraj Mumbai 145
	Project	Location	Amt(Rs. Cr)
	External Order book
	Adhiraj	Mumbai	145
	Kailash Enclave	Lucknow	100
	Ayyalur	Ayyalur,Andhra Pradesh	78
	GodrejGreens	Pune	75
	Sheth Creators – Malad(I&II)	Mumbai	72
	Adoni	Adoni,Andhra Pradesh	55
	Sriram Educational Turst	Chennai	43
	GodrejLaguna	Chennai	34
	Everest Enclave	Lucknow	32
		h
	TNMC	Cennai	31
	Other Projects		54
	Total		719
	Internal Order book
	Platinum Square	Pune	1
	Windermere‐Tower I & II	Pune	10
	Windermere‐Bunglows	Pune	33
	Hadapsar School	Pune	18
	Forest Edge	Pune	16
	Katvi‐Affordable Housing	Talegaon,Pune	80
	Total		158
	Total EPC Business Order book		877

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REAL ESTATE DEVELOPMENT

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REAL ESTATE BUSINESS

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BRAND EQUITY

Landmark developments (Windermere, Forest County and Willows) have established the Brand Vascon in Pune Market

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‐ END TO‐END CAPABILITIES

In‐house Design and Construction team gives us a unique advantage over other Real Estate Developers

LOW OPERATING COST

Flat organization structure with agile decision reduces operating cost

ASSET LIGHT MODEL

JV and JDA with land owners with low upfront deposit

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REAL ESTATE - KEY BUSINESS DRIVERS

Affordable Housing – the Focus Area

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INVESTED IN STRENGTHENING REAL ESTATE TEAM
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• Focus on developing Affordable Housing projects

• Perfect the Affordable Housing model in Pune and replicate in other cities

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100
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• Launch of new phases in existing projects with clear sales visibility

• Liquidate significant inventory at launch (Positive cashflows from the beginning of the Project)

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Key Steps taken in last Financial Year

• CEO (Real Estate) appointed with clear focus on Real Estate business

• Appointed separate heads for Sales, Marketing and CRM Function

• Real Estate team size grew from 7 people in March 2017 to 60 professionals at present; target to increase it to 100 people dynamic team

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60
7
Mar‐17 Mar‐18 Target
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Number of employees
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SUCCESSFULLY LAUNCHED REAL ESTATE PROJECTS

Windermere (JV)# 0.38 Vascon Goodlife – Value Home (Own) 0.46 Xotech 0.04 “FOREST EDGE” – KHARADIPUNE	Mar 2018 May 2018 60 197 194 Oct 2018 Fully Sold FY17 FY18 9M FY 19 RE‐LAUNCH OF WINDERMERE# VASCON GOODLIFE ‐ KATVITALEGAON
,	,

NEW SALE BOOKING OF ~3,28,677 SQFT FOR A TOTAL SALES VALUE OF ~RS. 194 CR IN 9M FY19 AGAINST SALE BOOKING OF ~2,46,867 SQFT FOR A TOTAL SALES VALUE OF ~RS. 197 CR IN FY18

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CURRENT REAL ESTATE PROJECTS UNDER DEVELOPMENT

	Project Name	Location	Vascon Share	Vascon Share	Total	Total	Total	Total	Vascon Share	Vascon Share	Vascon Share
					Project Area	**Area Sold **	Sale Value	Collection	Sale Value	Collection	Rev . Recognized
			Type	Share	msft	msft	Rs. Cr	Rs. Cr	Rs. Cr	Rs. Cr	Rs. Cr
	Forest Edge	Pune	JV	50%	0.08	0.08	54	23	27	12	‐
	Windmere Residential	Pune	JDA	45%	0.38	0.18	199	134	90	60	80
	Platinum Square	Pune	JV	70%	0.13	0.13	132	105	92	74	75
	Vascon GoodLife	Talegaon	Own	100%	0.46	0.18	64	3	64	3	‐
	Xotech	Hinjewadi	JV	50%	0.04	0.04	18	2	9	1	‐
	Total				1.09	0.60	467	266	282	150	155

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THANK YOU!

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Mr. M. Krishnamurthi / Mr. Punit Bhayani mk_murthi@vascon.com punit@vascon.com

Mr. Vikash Verma / Ms. Hina Agarwal vikash.verma @ stellar-ir.com hina @ stellar-ir.com

Vascon Weikfield Chambers, Pune - 411014

Kanakia Wall Street, Andheri (East), Mumbai 400 093