Vascon Engineers: A Strategic Focus on EPC and Real Estate Growth
Vascon Engineers Ltd, a leading player in the EPC and real estate sectors, is setting ambitious targets for the coming years. The company aims to significantly boost its order book and revenue streams, with a particular focus on scaling its real estate segment.
Vascon EngineersEpcReal EstateFinancial TargetsGrowth StrategyReal EstateAug 07, 2025
The company is targeting fresh order inflows of ₹1,800-2,000 crore for the fiscal year 2026 (FY26). This ambitious goal is part of a broader strategy to increase the total order book to ₹3,800-4,000 crore by March 2026. On average, the execution timeline for these projects is around three years, with approximately one-third of the closing order book getting executed in the subsequent year.
Real estate, which currently contributes a relatively small share to the company's total revenues, is poised for significant scaling over the next 2-3 years. According to Biswas, Real Estate revenue will be recognized on a completion basis, with most projects currently ongoing. The company expects to recognize close to ₹1,500 crore in revenue from real estate over the next four to five years, based on the current ongoing projects. There is also potential for additional revenue from any ongoing tie-ups. In terms of profitability, the real estate segment boasts a gross margin of around 30%, compared to 14-15% for EPC projects, and an EBITDA margin of 20%, compared to 9-10% for EPC.
The company's strong presence in government contracts, which account for approximately 78% of its external EPC order book, provides a stable and steady cash flow. Vascon has never faced any cash flow issues or credit risks with these government-led projects. The net working capital cycle for the EPC segment is a healthy 45-50 days, which is a testament to the company's robust financial management.
Looking ahead, Vascon aims to achieve an EPC topline of ₹2,000 crore over the next five years, with the real estate segment contributing significantly to the company's financials from March 2026 onwards. The company is also investing in and introducing various technologies to improve margins and enhance operational efficiency.
In terms of financial guidance for FY26, Vascon expects a 15-20% growth in earnings and a 25-30% growth in EBITDA, excluding any profit from the sale of investments. The company's long-term vision is clear: to maintain and grow its market position in both EPC and real estate, leveraging its strong financial health and strategic initiatives to drive sustainable growth.
Frequently Asked Questions
What is Vascon Engineers' target for fresh order inflows in FY26?
Vascon Engineers is targeting fresh order inflows of ₹1,800-2,000 crore for FY26, aiming to close the total order book at ₹3,800-4,000 crore by March 2026.
How does Vascon plan to scale its real estate segment over the next 2-3 years?
Vascon plans to scale its real estate segment by recognizing close to ₹1,500 crore in revenue over the next four to five years from ongoing projects, with potential upside from ongoing tie-ups.
What is the average execution timeline for EPC projects once awarded?
The average execution timeline for EPC projects once awarded is around three years, with approximately one-third of the closing order book getting executed in the subsequent year.
How does the receivables and collection cycle for government projects compare to private clients?
Government projects provide a steady and stable cash flow, with a net working capital cycle of 45-50 days, which is very healthy and stable. Vascon has never faced any cash flow issues or credit risks with government-led projects.
What are Vascon's long-term topline and margin targets for the EPC and real estate segments?
Vascon aims to achieve an EPC topline of ₹2,000 crore over the next five years, with the real estate segment contributing significantly to the company's financials from March 2026 onwards. The company expects to maintain and grow its market position in both segments.
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