Vascon Engineers share price rises : Vascon Engineers, a leading engineering and construction company in India, has announced that it has secured a Rs 262 crore order from Bridge and Roof Company, a government enterprise, for planning, designing, construction, IT, and maintenance of a government medical college at Kanker district of Chhattisgarh. The order was awarded on engineering, procurement, and construction (EPC) basis and the work is scheduled to be completed within 24 months from the date of commencement.
About Vascon Engineers
Vascon Engineers was established in 1986 and has since then delivered over 200 projects across various sectors such as residential, commercial, industrial, healthcare, hospitality, education, and infrastructure. The company has a strong presence in 15 states and 30 cities across India and has executed projects for some of the marquee clients such as Cipla, Dr Reddy’s, Sanofi, Tata Housing, Novotel, Global Hospitals, among others.
The company’s vision is to be a trusted partner for its clients by delivering quality projects on time and within budget. The company’s mission is to create value for its stakeholders by leveraging its expertise, experience, and innovation. The company’s core values are integrity, excellence, customer satisfaction, teamwork, and social responsibility.
Vascon Engineers share performance
The news of the order win boosted the Vascon Engineers share price by around 4 percent to Rs 77.9 per share on October 11 before closing at Rs 76 a piece. The stock has outperformed the benchmark index S&P BSE Sensex, which was up by 0.6 percent to 66,473 levels on the same day.
In the past three months, the Vascon Engineers share price has surged by 77 percent. The stock has also gained over 300 percent in the past one year, reflecting the strong growth prospects of the company.
The company has been consistently winning new orders from various government and private entities in the recent past. On August 23, 2023, the company had also received an order worth Rs 605 crore from Bihar Medical Services & Infrastructure Corporation (A Government of Bihar undertaking) for construction of Lohia Medical College & Hospital, including hospital and residential building, Supaul. The work was scheduled to be completed within 36 months from the date of receipt of Letter of Acceptance.
Vascon Engineers financial performance
The company has also reported a healthy financial performance in the first quarter of FY24 (Q1FY24). The company’s consolidated total income rose by 2 percent year-on-year (YoY) to Rs 208 crore in Q1FY24 from Rs 203 crore in Q1FY23. The earnings before interest, tax, depreciation, and amortisation (Ebitda) also grew by 6 percent YoY to Rs 18 crore in Q1FY24 from Rs 17 crore in Q1FY23.
The company’s profit after tax (PAT) increased by 9 percent YoY to Rs 12 crore in Q1FY24 from Rs 11 crore in Q1FY23. The company’s net debt also rose by 336 percent sequentially to Rs 48 crore in Q1FY24 from Rs 11 crore in Q4FY23.
Vascon Engineers outlook and recommendation
The company is expected to benefit from the increased spending on infrastructure development by the government as well as the private sector. The company has a strong order book of over Rs 2,000 crore as of September-end 2023, which provides revenue visibility for the next two to three years. The company is also focusing on improving its operational efficiency and profitability by adopting digital transformation and automation.
According to a report by a Broker Research dated October 8, 2023, Vascon Engineers is one of the top picks in the engineering and construction sector with a buy rating and a target price of Rs 95 per share. The report said that the company is well-positioned to capture the opportunities in the healthcare segment as well as other segments such as industrial and residential.
The report also said that the company has a diversified portfolio of projects across geographies and sectors with low client concentration risk. The report added that the company has a strong balance sheet with low debt-equity ratio and healthy return ratios.
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