Vascon Engineers Ltd. plans to boost its real-estate business over the next two years, especially after the sale of its subsidiary, GMP Technical Solutions Pvt., in the June quarter. The company will now primarily focus on its real estate, as well as its engineering, procurement, and construction businesses to maintain the financial figures similar to preceding fiscal.
"Predominantly, we will now be focusing on real estate and EPC. Real-estate accounting comes in spurts, and we do not expect any contribution in the next two quarters," Chairperson R Vasudevan told NDTV Profit.
"But going ahead, in the year, we expect a full contribution. We will keep the same numbers as last year because of an EPC boost and some amount of contribution coming from real estate," Vasudevan said.
Vascon's real-estate revenue contributions picked up in the last year, Vasudevan noted, adding that the business will double its contributions over the next two years.
"Going forward, real-estate contributions in FY26 and FY27 will be substantial. From next year onwards, we will have a decent contribution. This year, we expect about Rs 150-crore-plus revenue from real estate, and next year, we expect it to nearly double."
However, he made it clear that there is no plan of a demerger for the real estate business. "Question of demerger will be based on reasons other than the chunkiness of the real-estate business. Once we are set in the line of growth, the chunkiness will be taken care of, because there will be contributions coming together," he said.
Vasudevan was also hopeful of increasing the blended Ebitda margins from a sub–10% to about 15–16%, going forward. "EPC is going to give us 14% Ebitda margin going forward, while real estate will give 25%. So, net Ebitda should be 15–16%."
"As the order volume increases, the performance efficiency is going to increase. Our order book size now is Rs 150–200 crore against Rs 50 crore earlier. These are the reasons why we are hopeful of increasing margins,” he said.
The overall top line of the company will remain the same in FY25 despite the sale of GMP Technical Solutions because of a large order book of around Rs 3,500 crore from the EPC segment alone. In the current quarter, Vascon has picked up orders worth Rs 400 crore.
"We expect orders worth Rs 1,500 crore to happen before the end of the third quarter, which is not a challenge. With liquidity coming in from the GMP sale, we are on the path to execute those orders. All this will be done in about three years," Vasudevan added.
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