Vascon Engineers Limited — Investor Presentation 2022

Feb 8, 2022

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February 08, 2022

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

Dear Sir/ Madam,

Subject: Presentation Update

Please find enclosed Investor Presentation by the Company post board meeting.

This is for your information and records.

For Vascon Engineers Limited

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Vibhuti Dani

Company Secretary and Compliance Officer

Encl: As above

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“Persistent to create better tomorrow”

Investor Presentation | February 2022

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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1,976 Crs. 1,904 Crs Total Order Book External EPC Order Book

Forming healthy Order Book of Higher contribution by Government projects 6.6x FY21 EPC revenues

Q3 FY22:

KEY BUSINESS HIGHLIGHTS

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~76% Govt. Project (%)

16,079 Sqft Real Estate

New Sales Booking in 9MFY22 for a Total Sales value of Rs 15 Crs

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Providing visibility of faster execution
and uninterrupted Cash Flows
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75 Crs 70 Crs
Net Debt Raised via.
As on 31 [st] Dec 2021 Preferential Issue
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Fund to be utilized for Debt Repayment and Working Capital Requirement

Total debt repayment of Rs. 38 Crs in last nine months

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Ke Develo ments y p

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Upgradation of credit rating

• Long Term Bank Facilities: Ratings Upgraded to ACUITE BBB from ACUITE BBB-

• Long Term Non Convertible Debentures: Ratings Upgraded to ACUITE BBB from ACUITE BBB-

• Short Term Bank Facilities: Ratings Upgraded to ACUITE A3+ from ACUITE A3

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Bagged order worth Rs. 199 crores

• Received order ~Rs. 199 Crores from Vedanta Limited for construction of Cairn Oil & Gas Residential Complex at Barmer, Rajasthan. Timeline - to be completed within 18 months

Proceeds of Hotel Sale received in Q3FY22

• Sale of 43.34% stake held by Vascon Engineers in Cosmos Premises Private Limited for a consideration of Rs. 45.50 Crs. along with concurrent sale of 6.66% shares held in Cosmos Premises Private Limited by certain promoter related persons/ entities to Royal Orchid Hotels Limited

• Against the sale of Cosmos Premises Private Limited, Company acquired shares in River Shore Developers Private Limited from the promoters of Royal Orchid Hotels Limited, River Shore Developers Private Limited is having land parcel in Powai Mumbai.

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Execution Momentum pacing up…

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REVENUE FROM OPERATIONS (RS CRS)
In Q3FY22, strong execution sequentially
166
135
119 All projects are operating at an optimum
105 level, which enabled faster project execution
and resulted in better revenue generation
78
Execution to gather momentum in coming
quarters aided by the healthy Order Book
Q3FY21 Q4FY21 Q1FY22^ Q2FY22 Q3FY22
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UNLOCKING MEASURES STARTED UNFOLDING IN PHASED MANNER ^IMPACT OF LOCALIZED LOCKDOWN DURING SECOND WAVE OF COVID-19

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Debt Repayment of Rs. 38 crores since Mar-21

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Particular (Rs in Crs) Dec-21 Sep-21 Mar-21 Mar-20
Vascon Engineers
SBI / UBI / CSB 68.72 75.35 58.76 66.48
Kotak RE Fund 23.35 54.89 70.69 103.83
JM Finance 24.22 24.19 24.74 17.62
ICICI HFC 7.72 8 8.54 9.51
- -
Zero Coupon-NCD 13.64 13.64
Others 24.01 21.48 21.14 25.26
Total 148.02 183.91 197.5 236.33
GMP & Other companies 28.55 21.1 16.58 18.99
Total Debt 176.57 205.01 214.08 255.32
Cash & Bank Bal 21.73 5.28 22.66 22.29
FD 79.72 64.54 57.37 46.51
Total Cash & Bank Balance 101.44 69.82 80.03 68.8
Net Debt 75.12 135.19 134.06 186.53
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Charting towards higher Growth Trajectory

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Robust Order Book

Improved Capacity Utilization

Higher Cashflow Generation

Strengthening the Balance Sheet

The Order Book has grown 2x from FY19, with an improving contribution from the Government Sector

Execution of Current Order Book to enhance Capacity Utilization & Revenue Growth

Leading to improved Profitability thereby, improving Cash flows

Repayment of debt by incremental Cash flow Generation and funds raised from Preferential issue

WITH ROBUST ORDER BOOK AND INCREASED CAPACITY UTILIZATION, PROFITABILITY TO IMPROVE.. RESULTING IN BALANCE SHEET STRENGTHENING

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P&L Highlights- Q3 & 9M FY22

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Particulars (Rs. Crs)	Standalone	Standalone	Standalone	Standalone	Consolidated	Consolidated	Consolidated	Consolidated
	Q3 FY22	Q3 FY21	9M FY22	9M FY21	Q3 FY22	Q3 FY21	9M FY22	9M FY21
Revenue Other Income	121.61	101.74 2.92	314.49	223.44 9.77	169.99	154.49 3.14	440.28	316.2 10.21
	44.41		48.79		42.75		47.86
Total Income	166.02	104.66	363.28	233.21	212.74	157.63	488.14	326.41
Construction Expenses / Material Consumed Employee Cost Other Expenses EBITDA EBIDTA Margin(%)		83.53 9.29 3.43 8.41 8%		194.51 25.21 27.38 -13.89 -6%		115.94 16.34 9.9 15.45 10%		251.31 44.62 42.4 -11.92 -4%
	105.57		261.96		137.98		346.12
	8.08		31.02		16.27		54.62
	15.74		22.81		21.76		35.38
	36.63		47.49		36.73		52.02
	22%		13%		17%		11%
Depreciation Finance Costs Profit Before Tax Tax		1.55 6.68 0.18 -		5.25 19.27 -38.41 -		2.79 7.16 5.5 0.2		8.79 21.34 -42.05 0.78
	1.29		3.77		2.76		7.91
	4.40		15.93		5.14		17.94
	30.94		27.79		28.83		26.17
	-		0.61		0.12		1.07
Profit After Tax	30.94	0.18	27.18	-38.41	28.71	5.3	25.10	-42.83
Other Comprehensive Income Total Comprehensive Income	-0.26	0.01 0.19	0.25	-1.1 -39.51	-0.26	- 5.3	0.25	-1.1 -43.93
	30.68		27.43		28.45		25.35

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9MFY22- Segmental Profit & Loss - after allocation

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Particulars (Rs. Cr)	RE#	EPC##	GMP	Inventorised / Unallocable	Total
Revenue	50.55 40.68 9.87 20%	307.58 256.19 51.39 17%	125.87 83.88 41.99 33%	3.87	484.00
Cost of Sales					384.62
Gross Profit					99.38
Gross Profit Margin %					21%
Other Income	1.09 8.71 5.80	3.20 22.31 8.42	1.96 23.6 12.87	42.13 11.00	48.38
Employee Cost					54.62
Other Expenses					38.09
EBITDA	-3.55	23.86	7.48	27.26	55.05
EBIDTA Margin (%)	-	8%	6%		11%
Depreciation	0.34	3.56	4		7.90
EBIT	-3.89	20.30	3.48	27.26	47.15
EBIT Margin (%)	-	7%	3%		10%
Finance Costs					17.94
Profit Before Tax					29.21
Tax					4.11
Profit After Tax	-	-	-		25.10

# 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 a Glace

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ENGINEERING PROCUREMENT & CONSTRUCTION One of the leading EPC Company in India

50 Mn 200+ SQ. FT. OF PROJECTS PROJECTS DELIVERED DELIVERED

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REAL ESTATE DEVELOPMENT

Focus on Mid-Range Housing Project of the leading EPC Company in India

30+ 30+ YEARS OF PRESENCE EXPERIENCE ACROSS INDIA

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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 - 490

• 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 re-invest 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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907 1,953 2,019 1,904 137 107 90 72 FY19 FY20 FY21 Current Order Book Internal Order Book External Order Book (In Rs. Cr)	Project	Location	Amt (Rs. Cr)	Amt (Rs. Cr)
	External Order book
	Maharashtra State Police Housing	Mumbai	325
	PWD,Raipur	Raipur	248
	Hospital - Kaushambi	Kasuhambi, UP	231
	Hospital-Bijnor	Bijnor, UP	208
	Vedanta- Barmer Barmer,Raj 168
	MMRC Mumbai Metro	Mumbai	120
	GoaAirport	Goa	116
	MetroRail Depot	Bangalore	110
	Adhiraj	Mumbai	92
	PMC-AffordableHousing	Pune	53
	Transcon	Mumbai	42
	Adampur Airport	Adampur	37
	Other Projects		154
	Total		1,904
	Internal Order book
	Windermere-Bunglows	Pune	13
	ForestEdge	Pune	7
	Katvi-Affordable Housing	Talegaon, Pune	52
	Total		72
	Total EPC Business Order book		1,976
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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

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con are Dev. Area (msft) Launch Status 0% 0.08 18-Jan Fully Sold 0% 0.08 19-Sep 95% sold 5% 0.38 18-Mar 74% sold 0% 0.3 18-May 63% sold 0% 0.18 18-Dec 99% sold 0% 0.04 18-Oct Fully Sold	REAL ESTATE SALES (RS CR)
	116 120 15
	FY20 FY21 9MFY22

Relaunch

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

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RE-LAUNCH OF WINDERMERE#

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FOREST COUNTY -
XOTECH- PUNE
KHARADI
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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 0.15 109 76 55 38 26
-
Forest County Pune JV 50% 0.18 0.18 133 65 67 33
Windmere Residential Pune JDA 45% 0.38 0.29 340 323 183 174 183
-
Vascon GoodLife Talegaon Own 100% 0.46 0.18 65 39 65 39
Xotech (I&II) Hinjewadi JV 50% 0.08 0.08 38 38 19 19 19
Total 1.26 0.88 685 541 389 303 228
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Real Estate Projects – Pipeline (launches in Near-term)

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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 0.3 195 0.21 136
2 Madurai JDA Residential 0.49 220 0.37 165
3 4 Acre HDH-Ajantha JV Residential 0.6 460 0.3 230
Total 1.39 875 0.88 531
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Real Estate Projects – Pipeline (other projects)

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Sr. No. Projects Type Segment Total
Expected
Saleable Area
Sales Value
msft (Rs. in Cr)
1 Willows – Residential JV Residential 0.33 250
2 Kalyani Nagar - Comm JDA Commercial 0.3 330
3 Kalyani Nagar JDA Residential 0.5 550
Total 1.13 1,130
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Focus on Liquidity Management

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• RAISED RS 70 CR THROUGH PREFERENTIAL ISSUE

• SOLD STAKE HELD IN HOTELS AT GOA FOR CONSIDERATION OF RS. 45.50 CRS

• REMAINING NON-CORE ASSETS IDENTIFIED FOR SALE

• COMMERCIAL PROPERTY AT KALEDONIA, ANDHERI (E)

• 9 ACRE LAND PARCEL IN AURANGABAD

• GMP TECHNICAL SOLUTIONS (85% SUBSIDIARY OF VASCON)

CONTINUE FOCUS ON GENERATING CASH BY MONETIZING IDENTIFIED NON CORE ASSETS

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TOWARDS NEWER, BIGGER MILESTONES

LET’S CONNECT

Mr. Punit Bhayani punit@vascon.com

Vascon Weikfield Chambers, Pune - 411014

Mr. Gaurang Vasani/ Ms. Pooja Sharma vgaurang@stellar-ir.com Pooja.sharma@stellar-ir.com

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

Visit: www.vascon.com