Earnings Call Transcript Analysis Report #
Financial Performance #
Key Financial Metrics #
Total Income (Consolidated) #
- Q3 FY25: INR 298 crores (up 44% YoY from INR 208 crores).
- 9M FY25: INR 698 crores (up 30% YoY from INR 536 crores).
EPC Revenue #
- Q3 FY25: INR 274 crores (up 48% YoY).
- 9M FY25: INR 664 crores (up 37% YoY).
EBITDA (Consolidated) #
- Q3 FY25: INR 24 crores (vs INR 22 crores YoY). Margin: 8%.
- 9M FY25: INR 58 crores (vs INR 61 crores YoY). Margin: 8%.
Profit Before Exceptional Items and Tax (Consolidated) #
- Q3 FY25: INR 17 crores (vs INR 16 crores YoY).
Net Profit (Consolidated) #
- Q3 FY25: INR 76 crores (including profit on sale of GMP Technical Solutions) vs INR 16 crores in Q3 FY24.
- 9M FY25: INR 93 crores (including profit on sale of GMP) vs INR 47 crores in 9M FY24.
Net Debt #
- Reduced from INR 124 crores (June 2024) to INR 110 crores (September 2024) and further to INR 104 crores (December 2024).
Revised Guidance or Forecasts #
- The company expects the blended EBITDA margin to “touch 8.5% to 9% by the end of the year [FY25]” with anticipated real estate revenue in Q4.
Areas of Growth or Decline #
Growth #
- Strong revenue growth in the EPC segment (48% YoY in Q3, 37% YoY in 9M). Overall total income also showed robust growth. Net profit significantly boosted by GMP sale.
Decline #
- EBITDA margin declined to 8% due to lower revenue recognition and consequently lower contribution from the higher-margin real estate business in Q3 and 9M FY25.
Strategic Initiatives & Business Updates #
Major Strategic Announcements #
Divestment of GMP Technical Solutions #
- Successfully completed, receiving net sales proceeds of INR 110 crores. This “further strengthening our financial position and enabling us to focus on core business growth.” The proceeds are primarily being used to fund Mumbai real estate projects.
Focus on Core Business #
- Engineering, Procurement and Construction (EPC) and Real Estate development.
New Products, Services, or Markets Discussed #
Real Estate Launches #
- Om Sainath (Santacruz, Mumbai): First redevelopment project received RERA approval in January; construction underway. Official launch planned for February. Expected top-line for Vascon: ~INR 270 crores from ~70,000 sq ft.
- Powai Residential and Commercial Project: On track for launch in April 2025.
- Other Projects: Slated for FY 2026.
- Baner Pashan Link Road Project (Pune): In approval cycle, launch not expected before calendar year 2026. Planned investment: INR 30-40 crores.
Significant Operational Changes #
- Emphasis on “execution, financial discipline and growth.”
- Leveraging GMP sale proceeds for real estate project funding after dropping QIP plans.
Ongoing or Completed Projects #
EPC Order Book #
- Robust at INR 3,179 crores (nearly 4x FY24 EPC revenue).
- External EPC projects: INR 2,715 crores.
- Internal projects: INR 464 crores.
- Government projects constitute approximately 78% of orders, ensuring “stable cash flows and facilitate efficient execution timelines.”
Real Estate (9M FY25) #
- Achieved new sales bookings of 47,658 sq ft, generating sales value of INR 30 crores and total collection of INR 39 crores.
Market & Competitive Landscape #
Insights about Industry Trends #
- EPC outlook is “highly promising.”
- Real estate market: “Now it is mostly end user gain. So there is significant attraction is happening and sales are happening, so at least we are confident, even the market report also suggests that this growth will be continued for at least next 4 to 5 years or even bigger growth is there.”
Competitive Positioning Statements #
- Management highlighted the strength of the Vascon brand, particularly in Pune and Coimbatore, facilitating JV discussions.
- Focus on mid and upper-mid segment residential and commercial projects in real estate.
Market Challenges or Opportunities Mentioned #
Opportunity (EPC) #
- Post-election stability in Maharashtra is seen as an opportunity for more orders.