Vascon Engineers Limited — Investor Presentation 2020

Jan 31, 2020

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Date: January 31, 2020

To, To, National Stock Exchange of India Limited, Listing Department, Exchange Plaza, Bandra (E), Mumbai – 400 051

BSE Limited, The Department of Corporate Services Phiroze Jeejeebhoy Towers, Dalal Street, 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,

DANI Digitally signed by DANI VIBHUTI D Date: 2020.01.31 Vibhuti Dani VIBHUTI D 16:48:41 +05'30' Company Secretary and Compliance Officer

Enclosures: as above

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This document is signed electronically

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INVESTOR PRESENTATION | January 2020

DISCLAIMER

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• This presentation and the accompanying slides (the “Presentation”), which have been prepared by Vascon Engineers Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, 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.

• This Presentation has been prepared by the Company based on information and data which the Company considers reliable, 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 of the economies of various international markets, the performance of the real estate & infrastructure industry in India and 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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KEY HIGHLIGHTS

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EPC Business

Real Estate Business

Rs 2,091 Cr Rs 1,975 Cr Rs 116 Cr Total Order Book External Orders Internal Orders

• Land Monetisation of Rs 170 Cr in Ajanta Enterprise (50% JV of Vascon)

• • Commercial Property at Kaledonia, Andheri (E) given on Lease

Order Intake of Rs Cr in YTD FY20 1,540

New Sales booking of 103,213 sqft for a total sales value of Rs 85 Cr in 9M FY20

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LAND MONETIZATION OF RS. 170 CR

	Seller	Ms Ajanta Enterprise, 50% JV of Vascon
	Acquirer	Pune BP Development Pvt. Ltd. (SPV of Mapletree Investments Pte Ltd )
	Location	Kharadi Village, Pune
	Land Parcel Area	30,955 sq. mt.
	Gross Consideration	Rs. 170 Cr ( Entire c_onsideration received by Ms Ajanta Enterprise_)
	Net Cashflow to Vascon	Rs. 52.5 Cr
	Cashflow Utilisation	Reducing High Cost Debt & financing incremental Working Capital
	After this Land Sale transaction, Ajanta Enterprise has following :
	Total development of ~ 800,000 sft
	a) Under Development : 160,000	Forest Edge & 180,000 sft Forest County,
	b) To be launched : ~ 400,000 sft

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HIGHEST-EVER ORDER-INTAKE IN YTD FY20

	1,540 1,975 Order Intake (YTD FY20) Current External Order Book (In Rs. Cr) Order Intake State Rs. Cr. Public Works Department, Raipur, Chhattisgarh 506 Maharashtra State Police Housing & Welfare Corporation Ltd. Maharashtra 465 Tycoon Avanti Projects Maharashtra 172 Bangalore Metro Rail Corporation Karnataka 160 Airport Authority of India Goa 133 Pune Municipal Corporation Maharashtra 104 Total 1,540 EPC Business- External Order-Intake
	(In Rs. Cr)

RECEIVED ORDER WORTH RS. 1,540 CRORE SINCE THE BEGINNING OF THE CURRENT FINANCIAL YEAR

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P&L HIGHLIGHTS- Q3 & 9M FY20

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Particulars (Rs. Cr)	Standalone	Standalone	Standalone	Standalone	Consolidated	Consolidated	Consolidated	Consolidated
	Q3 FY20	Q3 FY19	9M FY20	9M FY19	Q3 FY20	Q3 FY19	9M FY20	9M FY19
Revenue Other Income	101.28	82.13 7.74	273.87	245.66 23.84	143.38	111.11 9.82	395.40	365.35 29.66
	3.02		15.16		2.49		15.98
Total Income	104.30	89.87	289.03	269.50	145.87	120.93	411.38	395.01
Construction Expenses / Material Consumed Employee Cost# Other Expenses EBITDA EBIDTA Margin (%)		54.46 10.28 8.42 16.71 19%		179.51 35.16 24.58 30.25 11%		76.60 16.71 12.94 14.68 12%		267.44 56.15 39.63 31.79 8%
	48.36		178.59		75.38		252.44
	9.18		28.32		15.48		50.54
	8.27		19.19		13.83		35.36
	38.49		62.93		41.18		73.04
	37%		22%		28%		18%
Depreciation Finance Costs Profit Before Tax Tax		2.13 6.62 7.96 -0.03		6.01 16.91 7.33 -1.02		3.47 6.97 4.24 -0.02		9.98 18.92 2.89 -1.01
	2.17		6.39		3.77		11.08
	6.01		18.39		6.70		20.93
	30.31		38.15		30.71		41.03
	-		-		0.34		0.34
Profit After Tax	30.31	7.99	38.15	8.35	30.37	4.26	40.69	3.90
Other Comprehensive Income Total Comprehensive Income	-0.17	-0.15 7.84	-0.14	-0.36 7.99	-0.17	-0.15 4.11	-0.14	-0.36 3.54
	30.14		38.01		30.20		40.55

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9M FY20- SEGMENTAL PROFIT & LOSS - AFTER ALLOCATION

Particulars (Rs. Cr)	RE#	EPC##	GMP	Inventorised	Total
Revenue	147.68 81.63 66.05 45%	191.71 141.16 50.55 26%	120.15 73.80 46.35 39%	0.39	459.54 296.98 162.56 35%
Cost of Sales
Gross Profit
Gross Profit Margin %
Other Income	6.80 9.06 11.80	8.81 19.26 9.10	2.22 22.22 16.20		17.83 50.54 37.10
Employee Cost
Other Expenses
EBITDA	51.99	31.00	10.15		92.75
EBIDTA Margin (%)	35%	16%	8%		20%
Depreciation	1.58	4.93	4.57		11.08
EBIT	50.41	26.07	5.58		81.67
EBIT Margin (%)	34%	14%	5%		18%
Finance Costs					20.93 60.74 20.05
Profit Before Tax
Tax
Profit After Tax	-	-	-		40.69

# 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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BUSINESS OVERVIEW

VASCON – AT A GLACE

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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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EPC BUSINESS- OVERVIEW

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

 Generate positive cash flows from all the projects and reinvest to drive growth

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MARQUEE CLIENTS

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MAINTAINING CONSISTENT QUALITY STANDARDS ENSURING REPEAT ORDERS
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ORDER BOOK BUILD-UP & KEY ORDERS

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(In Rs. Cr) Key Project Location Amt (Rs. Cr)
2,091
External Order book
116
Maharashtra State Police Housing Raipur 465
PWD, Raipur Mumbai 442
Tycoon Mumbai 165
Bangalore Metro Rail Corporation Bangalore 159
Airport Authority of India Goa 132
1,066 1,044 Adhiraj Mumbai 110
PMC-Affordable Housing Pune 103
190 137 1,975
Kailash Enclave Lucknow 76
515 Airport Authority of India Adampur 74
Other Projects 249
876 907 Total 1,975
Internal Order book
Windermere-Bunglows Pune 25
Forest Edge Pune 22
FY17 FY18 FY19 Current
Order Book Katvi-Affordable Housing Talegaon, Pune 69
Total 116
Internal Order Book External Order Book Total EPC Business Order book 2,091
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EXECUTION OF NEW ORDERS TO IMPROVE REVENUE VISIBILITY & CAPACITY UTILISATION

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REAL-ESTATE DEVELOPMENT

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

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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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SUCCESSFULLY LAUNCHED REAL ESTATE PROJECTS

	Projects Vascon Share Dev. Area (msft) Launch Status Forest Edge (JV) A 50% 0.08 18-Jan Fully Sold Forest Edge (JV) B 50% 0.08 19-Sep 42% sold Windermere (JV)# 45% 0.38 18-Mar 55% sold Vascon Goodlife – Value Home (Own) 100% 0.3 18-May 60% sold Forest County 50% 0.18 18-Dec 90% sold Xotech C (JV) 50% 0.04 18-Oct Fully Sold	REAL ESTATE SALES (RS CR)
		197 272 85
		FY18 FY19 9MFY20
#Relaunch

Relaunch

“FOREST EDGE” – VASCON GOODLIFE - KHARADI, PUNE KATVI, TALEGAON

RE-LAUNCH OF WINDERMERE#

XOTECH- PUNE

FOREST COUNTY - KHARADI

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TRACK RECORD OF REAL ESTATE SALES

Q-O-Q SALES AREA SQ. FT (‘000)

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92
80
47
43
39
18
Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20
Q-O-Q SALES VALUE (RS. CR.)
78
58
44
28
21
13
Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20
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CURRENT REAL ESTATE PROJECTS UNDER DEVELOPMENT

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Total Vascon Share
Project Name Location Vascon Share
Project Area Rev.
Sale Value Collection Sale Value Collection
Area Sold Recognized
Type Share msft msft Rs. Cr Rs. Cr Rs. Cr Rs. Cr Rs. Cr
-
Forest Edge (A&B) Pune JV 50% 0.16 0.11 76 37 38 19
Forest County Pune JV 50% 0.18 0.16 117 9 59 5 -
Windmere Residential Pune JDA 45% 0.38 0.21 244 199 110 89 109
Platinum Square (I&II) Pune JV 70% 0.13 0.13 133 121 93 85 93
-
Vascon GoodLife Talegaon Own 100% 0.46 0.18 64 18 64 18
Xotech (I&II) Hinjewadi JV 50% 0.08 0.08 36 32 18 16 18
Total 1.39 0.87 670 416 381 231 220
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REAL ESTATE PROJECTS – PIPELINE ( LAUNCHES IN NEXT TWELVE MONTHS)

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Sr. No. Projects Type Segment Total Vascon Share
Saleable Expected Saleable Expected
Area Sales Value Area Sales Value
msft (Rs. in Cr) msft (Rs. in Cr)
1 Coimbatore JDA Residential 0.33 179 0.23 125
2 Madurai JDA Residential 0.49 220 0.37 165
3 4 Acre HDH - Phase I JV Residential 0.26 182 0.13 91
4 4 Acre HDH - Phase II JV Residential 0.22 150 0.11 75
Total 1.3 731 0.84 456
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REAL ESTATE PROJECTS – PIPELINE (OTHER PROJECTS)

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Sr. No. Projects Type Segment Total
Saleable Expected
Area Sales Value
msft (Rs. in Cr)
1 Bavdhan - Comm JDA Commercial 0.23 158
2 Willows - Comm JV Commercial 0.23 191
3 Kalyani Nagar - Comm JDA Commercial 0.3 330
4 Kalyani Nagar JDA Residential 0.5 550
Total 1.26 1,229
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NON-CORE ASSETS

1. 44% EQUITY STAKE IN HOTELS AT GOA

2. COMMERCIAL PROPERTY AT KALEDONIA, ANDHERI (E)

3. 9 ACRE LAND PARCEL IN AURANGABAD

4. GMP TECHNICAL SOLUTIONS (85% SUBSIDIARY OF VASCON)

CONTINUE FOCUS ON GENERATING CASH BY MONETIZING IDENTIFIED NON CORE ASSETS

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THANK YOU!

Mr. Punit Bhayani punit@vascon.com

Vascon Weikfield Chambers, Pune - 411014

Mr. Gauranh Vasani/ Ms. Hina Agarwal vgaurang@stellar-ir.com hina@stellar-ir.com Kanakia Wall Street, Andheri (East), Mumbai 400 093