Vascon Engineers Ltd Management Discussions

Company Overview

As Vascon Engineers celebrates its landmark 40-year journey "40 Saal Bemisaal" it reflects four decades of excellence, resilience, and value creation across the construction and real estate sectors.

Over these 40 years, Vascon has built a strong reputation for delivering highly engineered, versatile, complex and large-scale projects with quality, precision, and timeliness. The Company has successfully executed more than 225+ projects, covering over 45 million sq. ft. across residential, commercial, institutional, industrial, and infrastructure segments.

In addition to its strong EPC business, Vascon has established a strong presence in the real estate segment, with four projects successfully launched, four projects currently under development, and four projects in the pipeline. This diversified portfolio strengthens the Companys growth visibility and reinforces its position in high-potential urban markets.

The Company has been entrusted with several landmark developments, including Lotus Park Ahmedabad, Dabolim Airport Goa, Adampur Airport Jalandhar, Medical College Kaushambi, Vedanta Barmer and Mumbai Metro High Rise Building, Saudamini Building, MSEBHCL etc. Building on this legacy, Vascon continues to secure prestigious EPC projects and expand its presence across high-growth markets. Order book, proven execution capabilities, and a disciplined business model, the Company is well positioned to capture opportunities arising from Indias expanding infrastructure and real estate sectors.

Backed by a robust order book, strong execution capabilities, and a disciplined approach to growth, Vascon remains well positioned to capitalise on opportunities arising from Indias expanding infrastructure and real estate sectors, while continuing to create long-term value for all stakeholders.

Global Economy:

The global economy remained resilient yet uneven during FY 2025–26, navigating persistent geopolitical tensions, evolving trade dynamics, and changing monetary policy conditions. Global growth moderated during the year as elevated uncertainty, supply-side disruptions, and higher commodity price volatility weighed on economic activity.

According to the International Monetary Fund (IMF), global GDP growth is projected at 3.1% in 2026, slightly lower than 3.4% in 2025, reflecting slower expansion across several advanced and emerging economies. Advanced economies are expected to grow by 1.8%, while emerging market and developing economies are projected to grow by 3.9%. Among major economies, the United States continued to demonstrate resilience, with growth supported by strong labor markets and consumer spending, though GDP growth is expected to moderate to around 1.8% in 2026 from 2.8% in 2025. The Eurozone remained relatively weak, with growth projected at 1.2%–1.4%, constrained by weak manufacturing output and subdued external demand. Chinas economy continued to face challenges from property market stress and softer domestic demand, with growth expected at 4.2%–4.5% in 2026, compared to 4.8% in 2025.

Global trade recovery remained gradual. The World Trade Organisation (WTO) estimates global merchandise trade growth at approximately 3.2% in 2026, following 3.1% growth in 2025, supported by improving supply chains and recovering demand. However, rising protectionism, trade fragmentation, and shipping disruptions continued to weigh on global trade flows.

Global inflation continued to ease as supply chain bottlenecks normalised and commodity prices stabilised. According to the World Bank, global inflation is expected to decline to approximately 4.2% in 2026, from 4.5% in 2025 and 5.7% in 2024. However, inflation remained vulnerable to fluctuations in food and energy prices, particularly amid geopolitical instability in major commodity-producing regions.

Outlook

The global economic outlook remains stable despite geopolitical uncertainties and evolving trade dynamics. According to the International Monetary Fund (IMF), global GDP growth is projected at 3.1% in 2026, improving marginally to 3.2% in 2027, reflecting continued resilience in economic activity. Global inflation is expected to rise to 4.4% in 2026 before moderating to 3.7% in 2027. Improving financial conditions, easing supply-side pressures, and sustained investments in technology and sustainable infrastructure are expected to support steady global growth over the medium term.

Indian Economy:

India continued to remain one of the fastest-growing major economies in the world during FY 2025–26, supported by strong domestic demand, resilient investment activity, and sustained government-led infrastructure spending. The economy demonstrated steady growth despite global macroeconomic uncertainties, supported by robust consumption and improving industrial activity.

According to the National Statistical Office (NSO), Indias real GDP is estimated to grow by 6.5% in FY 2025–26, driven by healthy performance across manufacturing, services, and construction sectors. Strong urban consumption, rising private investments, and increased public capital expenditure continued to support economic momentum during the year.

Inflation remained largely under control during FY 2025–26. Average Consumer Price Index (CPI) inflation moderated to around 4.6%, supported by easing food prices, stable commodity prices, and improving supply-side conditions. Inflation remained within the Reserve Bank of Indias (RBI) tolerance band of 2–6%, providing macroeconomic stability. On the policy front, the Government of India continued to prioritise infrastructure-led growth and economic development. In the Union Budget 2026–27, capital expenditure was increased to _12.2 lakh crore, reinforcing the Governments commitment toward roads, railways, urban infrastructure, logistics, and energy development. Meanwhile, the RBI maintained a balanced monetary policy approach, focusing on inflation management while supporting economic growth and financial stability.

Indias strong demographic advantage, rapid urbanisation, digital transformation, and rising formalisation of the economy continue to strengthen its long-term growth potential.

Outlook

Indian economy remains positive, supported by resilient domestic demand, sustained infrastructure investments, and improving private sector participation. According to the Reserve Bank of India (RBI), Indias real GDP is projected to grow by around 6.6% in FY27, reinforcing its position as one of the fastest-growing major economies globally.

Inflation is expected to remain manageable, with CPI inflation projected at 5.1% in FY27, supported by easing supply-side pressures and stable commodity prices. The RBIs repo rate at 5.25% is expected to support credit availability and maintain a balanced interest rate environment. Stable to moderating home loan interest rates are likely to improve housing affordability and support demand in the residential real estate sector.

Additionally, continued policy support through infrastructure-led development and housing initiatives, along with _12.2 lakh crore budgeted towards capital expenditure in FY27, is expected to strengthen investment activity. Indias strong macroeconomic fundamentals, policy stability, and favorable demographics position the economy well for sustained long-term growth.

Industry Overview

Construction Sector

Indias construction sector continued to remain a key pillar of economic growth during FY 2025–26, supported by sustained infrastructure investments, rapid urbanisation, and strong government policy support. The sector plays a critical role in GDP contribution, employment generation, and nation-building through the development of transportation, urban, industrial, and social infrastructure. The Government of Indias continued focus on infrastructure-led development remained a major growth catalyst. In the Union Budget 2026–27, capital expenditure was increased to _12.2 lakh crore, reinforcing the Governments commitment toward roads, railways, metro networks, airports, energy, and logistics infrastructure. According to industry estimates, Indias construction market is expected to reach _25.31 trillion in 2026, driven by strong activity across residential, commercial, industrial, and infrastructure segments. Further, the construction sector is projected to grow by approximately 6.4% in real terms during 2026, supported by large-scale investments in transport and energy infrastructure.

Despite temporary moderation in certain sub-segments such as roads and water-related projects during FY26, the overall outlook for the sector remains positive. According to ICRA, Indias construction sector is expected to witness

6–8% revenue growth in FY27, supported by improving order inflows, execution momentum, and increased infrastructure spending.

Additionally, technology adoption through Building Information Modelling (BIM), automation, AI-led project monitoring, and digital construction management is improving efficiency, cost optimisation, and execution timelines across the industry.

With strong public capex, rising private investments, and expanding urban infrastructure needs, Indias construction sector remains well positioned for long-term sustainable growth.

Outlook

Indias construction sector remains robust, supported by a strong order pipeline and improving execution momentum._ the sector is expected to witness 6–8% revenue growth in FY27, compared to 2–4% growth in FY26 (ICRA). Additionally, the Governments continued infrastructure push, with _12.2 lakh crore budgeted for capital expenditure in FY27, is expected to support sustained growth across the sector.

Residential Real Estate Market

Indias residential real estate market remained resilient in FY 2025–26, supported by urbanisation, rising household incomes, and continued preference for home ownership. According to Magicbricks PropIndex Q1 2026, housing supply across major cities increased by 10.1% YoY, while residential prices rose by 14.1% YoY, reflecting sustained demand, particularly in premium and mid-income housing segments. Demand continues to be driven by infrastructure-led micro-markets, improved connectivity, and rising preference for larger homes with lifestyle amenities.

Outlook

Residential market remains positive, supported by improving affordability, stable home loan rates, and continued urban migration. Premium and redevelopment-led projects are expected to remain key growth drivers in major urban markets.

Commercial Real Estate Market

Indias commercial real estate market demonstrated strong momentum in FY 2025–26, driven by robust office leasing from IT-BPM, BFSI, Global Capability Centers (GCCs), and flexible workspace operators. According to Cushman

& Wakefield Q1 2026, gross office leasing across the top 8 cities stood at 21.9 million sq. ft., registering 13% YoY growth. Office vacancy further declined to 13.85%, indicating healthy demand and tightening supply across key business districts.

Outlook

Commercial market is expected to maintain steady growth, supported by GCC expansion, increasing demand for Grade-A office spaces, and rising absorption in major business hubs such as Bengaluru, Mumbai, Pune, and Hyderabad.

Industrial Market

Indias industrial segment continued to witness strong growth, supported by manufacturing expansion, supply chain optimisation, e-commerce growth, and government initiatives such as Make in India and PLI schemes. According to Colliers Q1 2026, industrial and warehousing leasing reached 11 million sq. ft., reflecting 22% YoY growth. The sector is also benefiting from rising investments in logistics parks, industrial corridors, and warehousing infrastructure.

Outlook

Industrial and warehousing market is expected to remain a high-growth segment, driven by manufacturing-led demand, logistics modernisation, and increasing institutional investments. Strong infrastructure development is likely to further accelerate demand for industrial and warehousing assets.

Government Initiatives Driving Growth

Several flagship government programmes continue to support the expansion of Indias infrastructure and housing markets: PM Gati Shakti: PM Gati Shakti is the Governments integrated infrastructure master plan focused on improving multimodal connectivity across roads, railways, ports, and airports. As of FY26, over 300 railway projects covering 13,808 km have been sanctioned under this initiative.

National Infrastructure Pipeline (NIP): The National Infrastructure Pipeline is a long-term infrastructure investment roadmap with planned investments of over _111 lakh crore across sectors such as transportation, energy, and urban infrastructure, aimed at accelerating economic growth and private sector participation.

Smart Cities Mission: The Smart Cities Mission aims to develop 100 cities with smart and sustainable urban infrastructure through better mobility, digital governance, energy efficiency, and public services, improving overall urban livability.

AMRUT: AMRUT focuses on strengthening urban infrastructure through improved water supply, sewerage, drainage, and green spaces across 500+ cities and towns, supporting sustainable urban development and better quality of life.

Pradhan Mantri Awas Yojana (PMAY): PMAY is the Governments flagship affordable housing scheme promoting home ownership across urban and rural India. As of May 2026, 125.36 lakh houses have been sanctioned under PMAY-Urban, with 98.35 lakh houses completed. Together, these initiatives have created a long-term pipeline of opportunities for construction and real estate companies, while improving urban and rural ecosystems across India.

Real Estate Sector

Indias real estate sector continued to demonstrate strong resilience during FY 2025–26, supported by robust housing demand, rising urbanisation, improving infrastructure, and sustained investor confidence. The sector remained one of the key contributors to economic growth, with strong momentum across residential, commercial, warehousing, and emerging asset classes.

Residential real estate market witnessed healthy demand, particularly in the mid-premium and premium housing segments, driven by rising disposable incomes, growing homeownership aspirations, and improved connectivity across key urban markets. According to industry estimates, the residential real estate sector recorded a 26% CAGR in sales value between FY22 and FY25. While growth moderated in FY26 following a strong post-pandemic recovery, the sector continued to witness stable demand and healthy collections. According to CRISIL Ratings, residential sales value growth is estimated at 5–7% in FY26, indicating a transition toward more sustainable and disciplined growth. Commercial real estate also maintained positive momentum, supported by strong demand for Grade A office spaces, Global Capability Centres (GCCs), and flexible workspaces. According to Colliers India Real Estate 2026 Report, Indias office leasing crossed 50 million sq. ft. in the first nine months of 2025, with annual demand expected to stabilise at 70–75 million sq. ft., reflecting continued occupier confidence and expansion by global enterprises.

Institutional participation in the sector remained strong, with increasing investments through Real Estate Investment Trusts, InvITs, and alternate investment vehicles. Indias listed office REIT portfolio is expected to expand to 190–195 million sq. ft. by FY27, highlighting growing investor confidence in high-quality commercial assets.

Government-led infrastructure development through metro expansion, industrial corridors, expressways, and urban redevelopment continued to act as a major growth catalyst for the real estate sector. Improved connectivity and rapid urbanisation are increasingly unlocking value across both metro and Tier-II/Tier-III cities.

Outlook

Indias real estate sector is expected to maintain steady growth, supported by rapid urbanisation, infrastructure development, and sustained housing demand. According to IBEF, the sector is projected to reach US$ 5.8 trillion by 2047, contributing around 15.5% to Indias GDP, up from the current ~7.3%. Demand in the residential segment is expected to remain healthy, particularly in premium and mid-income housing, while commercial real estate is likely to benefit from strong office leasing and increasing institutional investments. With continued policy support and improving market transparency, the sector remains well positioned for long-term growth.

Emerging Trends Real Estate

Premiumisation of Residential Demand

Residential market is the increasing shift toward premium and luxury housing. Rising disposable incomes, wealth creation, and growing NRI participation are driving demand for larger, amenity-rich homes.

According to market reports, premium and luxury housing accounted for nearly 63% of total residential sales in 2025, compared to 53% in 2024, indicating a clear shift toward higher-value housing segments. Homebuyers are increasingly prioritising lifestyle, wellness, gated communities, and integrated township developments.

Infrastructure-led Real Estate Growth

Large-scale investments in metro rail, expressways, airports, ring roads, and industrial corridors are reshaping real estate demand across key micro-markets. Infrastructure development is improving connectivity, reducing commute times, and unlocking new residential and commercial clusters.

Rise of Tier-II and Tier-III Cities

Tier-II and Tier-III cities are emerging as important real estate growth centers due to improving infrastructure, lower land costs, and increasing employment opportunities. Developers are expanding into these markets to capture rising housing and commercial demand.

Institutionalisation and Capital Inflows

Institutional participation in Indian real estate continues to increase, reflecting strong long-term investor confidence. According to JLL, institutional investments in Indian real estate rose 23% YoY to USD 4.3 billion in H1 2026, while domestic capital accounted for a record 64% share of total investments. convenience, holistic living, and community engagement The continued expansion of REITs, AIFs, and structured real estate financing is improving liquidity and increasing transparency within the sector. This trend is accelerating the transition toward a more organised and professionally managed market.

Growth in Commercial and Flexible Workspaces

Office real estate market continues to evolve with changing workplace strategies. Demand for Grade-A office spaces, flexible workspaces, and managed offices remains strong, driven by technology firms, GCCs, BFSI players, and engineering companies.

According to Colliers, Indias co-working sector leased a record 8.6 million sq. ft. in H1 2026, reflecting strong demand for flexible and scalable office solutions.

Emergence of Alternative Asset Classes

Alternative real estate segments such as warehousing, data centers, co-living, senior living, and mixed-use developments are witnessing rising investor interest. These segments are benefiting from digital transformation, e-commerce growth, demographic shifts, and evolving lifestyle needs.

Relevance to Market

The emerging trends in Indias real estate sector align well with Vascons diversified business model across EPC and real estate development. Rising demand for premium housing, infrastructure-led urban expansion, and increasing redevelopment activity in key urban markets are creating significant growth opportunities for the Companys real estate portfolio.

Simultaneously, growing investments in commercial spaces, IT parks, institutional buildings, and urban infrastructure continue to expand opportunities within the EPC segment. Additionally, increasing emphasis on sustainable and green developments, along with the gradual formalisation of the real estate sector, is expected to benefit established and execution-focused players such as Vascon.

The increasing demand for premium residential developments is expected to support better pricing and improve realisations for Vascons real estate portfolio, particularly in key urban markets. At the same time, infrastructure-led development, including metro expansion, highways, airports, and industrial corridors, is unlocking new real estate micro-markets while also creating additional EPC opportunities through large-scale project execution. The rise of Tier-II and Tier-III cities, supported by rapid urbanisation and improving infrastructure, is expanding the addressable market for organised developers and construction players. Additionally, growing institutional capital inflows and increasing sector formalisation are expected to benefit established players with strong governance, execution capabilities, and proven delivery track records such as Vascon.

Further, rising demand for commercial spaces, flexible workspaces, and alternative asset classes such as mixed-use developments and warehousing is expected to broaden market opportunities and support long-term portfolio diversification.

Financial Performance with respect to operational performance

Company Performance

Coming to the performance for the year, FY26 witnessed stable operational performance despite certain temporary external challenges during the year. The Company reported a 12% decline in revenue compared to FY25; however, project execution conditions have gradually started normalising across key sites. Throughout the year, the Company remained focused on execution discipline, productivity improvement, cost control, and maintaining steady project progress.

During the year, we significantly strengthened our banking relationships and working capital position. Further, SBI completed a revised assessment of our working capital facilities with improved commercial terms, including better collateral leverage and lower bank guarantee margins. These improvements have enhanced liquidity, improved cash flow efficiency, and strengthened our ability for faster project mobilisation.

With stronger banking support now in place, our available working capital capacity can support execution of nearly _3,000 crore of additional EPC orders.

EPC Segment

The EPC segment remained the primary contributor to the Companys revenue, reporting revenues of 916 crore in FY 2025–26. The moderation in EPC revenue during the year was primarily due to cash flow constraints in two major Government projects and internal organisational changes at a major private client, which impacted onsite decisions and project schedules.

During the year, the Company secured new EPC orders aggregating approximately _762 crore, including the Royal Rides Private Limited project in Goa, the Saudamini Building redevelopment project at Haji Ali from MSEBHCL, the Navi Mumbai Municipal Corporation Super Speciality Hospital project, and the Lotus Park project in Ahmedabad. At year-end, the EPC order book stood at _2,717 crore, equivalent to 2.9 times annual revenues, providing robust visibility for the coming years. A diversified client base across government, institutional, and private sectors further strengthens resilience. Going forward, the Company will focus on expanding into high-potential verticals such as healthcare, institutional infrastructure, and residential complexes while leveraging digital tools and automation to enhance efficiency.

Real Estate Segment

The Real Estate segment recorded revenues of _33 crore in FY 2025–26, supported by healthy sales momentum and disciplined collections. New sales bookings stood at 96735 sq. ft. worth _113 crore, with collections of _119 crore during the year.

Ongoing projects continued to demonstrate strong traction, reflecting Vascons brand strength and focus on the mid-to-premium housing category.

Project	Location	Status (as of Mar-26)
Good Life	Talegaon (Pune)	82% sold
Tulip Phase III	Coimbatore	93% sold
Tower of Ascend	Pune	73% sold
Orchids	Mumbai	26% sold

Real estate business is supported by a robust upcoming project pipeline, providing strong medium-term growth visibility. Near-term launches comprise four projects across key micro-markets such as Mumbai and Pune, with a total saleable area of approximately 1.94 million sq. ft. and an estimated gross development value (GDV) of _2,360 crore, of which around _1,110 crore is attributable to Vascon. Key upcoming launches include projects in Powai, Prakash Housing Society, Baner-Pashan, and HDH-Ajanta, spanning residential, redevelopment, and commercial segments. This diversified pipeline strengthens revenue visibility and reinforces the Companys long-term growth outlook in the real estate segment.

Strategic Realignment

During FY 2025–26, strategic initiatives were undertaken to sharpen focus on the core EPC and Real Estate businesses. This realignment improved operational efficiency, streamlined resource allocation, and strengthened capital discipline.

Reflecting these improvements, CRISIL reinstated Vascons long-term credit rating to A-/Stable, reinforcing confidence in the Companys business fundamentals, financial profile, and long-term growth prospects.

Consolidated Financial Performance

• Total Consolidated Revenue stood at _948.53 Crores in FY 2025 - 26 as against _1077.41 Crores in FY 2024-25

• EBITDA stood at _87.13 Crores in FY 2025-26 as against _99.90 crore in FY 2024-25

• Profit after tax stood at _48.90 Crores in FY 2025-26 as against _130.25 crores in FY 2024-25

• As on March 31, 2026, Total consolidated debt stood at _298.60 crores as against _201.90 crores on March 31, 2025

• Net worth stood at _1,149 Crores as on March 31, 2026 as compared to _1,092.82 crores as on March 31, 2025

Working Capital Management

• Current assets as on March 31, 2026 stood at _2,011.53 Crores as compared to _1,739.03 crores as on March 31, 2025.

• Current ratio as on March 31, 2026 stood at 1.95 times as compared to at 1.89 times as on March 31, 2025.

• Inventories stood at _736.50 Crores as on March 31, 2026 as against _591.21 crores as on March 31, 2025.

• Loan & Other Financial Assets stood at _730.36 Crores in FY 2025-26 compared to _612.86 crores in FY 2024- 25.

• Current liabilities stood at _1030.91 crores on March 31, 2026 compared to _920.64 crores as on March 31, 2025.

• Cash and bank balances was at _203.33 Crores as on March 31, 2026 compared to at _227.74 crores as on March 31, 2025.

Key Ratios

• Debtors turnover: The Companys debtors turnover stood at 4.22 days in FY 2025-26 as compared to 5.52 days in FY 2024-25;

• Inventory turnover: Inventory turnover stood at 1.24 days FY 2025-26 as against 1.65 days in FY 2024-25; major inventory is related to Real Estate Division and it also includes inventory for project which are not yet launched

• Interest coverage ratio: The Companys interest coverage ratio stood at 5.01 times in FY 2025-26 against 8.93 times in FY 2024-25;

• Debt to Equity ratio: Debt to Equity Ratio stood at 0.26x

• Return on net worth: The return on net worth stood at 6.11 % in FY 2025-26.

Strategic Partnership with Adani Group

Vascon has entered strategic partnership with Adani Infra (India) Limited represents a significant long-term growth opportunity for Vascon. Under the five-year Memorandum of Understanding (MoU), Vascon will serve as an execution partner under an early engagement model, enabling the Company to participate in projects from the design and planning stage through execution. This integrated approach is expected to enhance execution efficiency and deepen client engagement.

As part of the initial phase, multiple projects in Mumbai covering approximately 13.15 million sq. ft. have been identified under this partnership. The collaboration is expected to strengthen Vascons presence in high-value urban infrastructure and redevelopment projects, particularly in the Mumbai market. Over the medium term, this strategic alliance has the potential to contribute meaningfully to the Companys order book and revenue growth, while further reinforcing Vascons positioning as a preferred execution partner for large-scale complex developments.

Real Estate

Ongoing Projects:

Tulip Phase 3 – Coimbatore, Tamil Nadu: Launched in 2023, the Company owns 98 units in the project, of which 60 units were sold within the first month of launch. As on 31st March, 2026, the project is 92% sold.

Tower of Ascend – Kharadi, Pune: A commercial project strategically located in Kharadi, Pune, offering excellent connectivity and strong locational advantages. The project has a total developable area of 189,790 sq. ft., of which 82% has been sold as on 31st March, 2026.

Vascon Goodlife – Vascon Goodlife is the Companys first value housing project spread across 10 acres in Katvi, Talegaon. Offering 1 RK, 1 BHK, and 2 BHK residences, the project focuses on affordable yet value-driven living with differentiated learning-oriented infrastructure. As of FY 2025–26, approximately 82% of project inventory has been sold, reflecting strong customer demand.

Vascon Orchids - Vascon Orchids is a premium redevelopment project located on Linking Road, Santacruz West, offering 62 premium residential units across three wings. Supported by strong connectivity and strategic location advantages, the project strengthens Vascons presence in Mumbais premium residential segment. As of FY 2025–26, approximately 26% of inventory has been sold.

Strength, Opportunities, Strategy

Strengths

• Strong Order Book Providing Revenue Visibility: The Company maintains a healthy EPC order book of approximately _2,717 crore as of FY 2025–26, providing strong revenue visibility and supporting sustained business growth over the medium term.

• Proven Execution Capabilities: With nearly 40 years of industry experience and over 200 completed projects, the Company has established strong execution capabilities across residential, commercial, institutional, industrial, and infrastructure projects.

• Experienced Management: A proven leadership team with decades of experience in construction, real estate, and project execution.

• Brand Trust: Reputation for quality, transparency, and timely delivery, which continues to strengthen customer and client confidence.

• Presence in High-Growth Markets: Vascon has built a strong presence in strategic urban markets such as Pune, Mumbai, and Western India, which continue to benefit from urbanisation, infrastructure development, and rising housing demand.

• Healthy Real Estate Portfolio: The Company continues to witness healthy demand across its residential projects, supported by strong sales traction in developments such as Vascon Goodlife, Citron Phase II, and Vascon Orchids, reflecting strong market acceptance.

• Strong Growth Opportunities in Redevelopment: Increasing redevelopment activity, particularly in urban markets such as Mumbai and Pune, presents a significant long-term opportunity for the Company, supported by its proven project execution and strong market positioning.

Opportunities

• Rising government capital expenditure and continued focus on infrastructure development through roads, metro, airports, urban infrastructure, and public institutions are expected to create significant EPC opportunities for the Company.

• Increasing redevelopment activity in land-constrained urban markets such as Mumbai and Pune presents a strong long-term opportunity, driven by aging infrastructure, better regulatory support, and rising demand for modern housing.

• Rising urbanisation, increasing disposable income, and improving housing affordability are expected to support sustained demand across residential real estate, particularly in key urban markets.

• Growing consumer preference for larger homes, lifestyle amenities, and premium residential developments creates opportunities for better realisations and margin expansion in the real estate segment.

• Rapid urbanisation across Tier-I and emerging Tier-II cities is expanding the addressable market for organised EPC and real estate developers, creating long-term growth opportunities.

• Rising investments in IT parks, commercial offices, healthcare, education, and industrial infrastructure are expected to create additional project opportunities for the EPC segment.

Strategy

Vascons strategy remains anchored on strengthening its core businesses of EPC and Real Estate Development:

• Balanced Growth Across EPC and Real Estate:

Maintaining a balanced growth strategy across both the EPC and real estate segments enables diversified revenue streams and reduces dependence on any single business vertical. This dual-engine model strengthens business resilience and supports long-term value creation.

• Focus on Order Book Expansion: Continued emphasis remains on strengthening the EPC order book by targeting high-quality projects across government, institutional, commercial, and infrastructure segments. A healthy order pipeline provides strong revenue visibility and supports sustainable growth in the EPC business.

• Operational Excellence and Execution Efficiency: Improving project execution, cost optimisation, and timely delivery remain central to long-term growth. Enhanced project planning, efficient resource utilisation, and technology adoption continue to support operational efficiency.

• Innovation & Sustainability: Leverage technology and green practices to differentiate offerings, improve cost efficiency, and align with evolving customer and regulatory expectations.

Through these strengths and strategic priorities, Vascon is well positioned to capture Indias growing demand for infrastructure and housing while delivering sustainable value creation for stakeholders.

Risk Factors & Mitigation

Vascon operates in dynamic markets where multiple external and internal risks can impact performance. The Company has developed a robust risk management framework to proactively identify, assess, and mitigate these risks.

EPC Business Risks

• Project Execution & Timeline Risk: Delays arising from labour shortages, adverse weather conditions, approval bottlenecks, or slower site mobilisation may impact project execution and revenue recognition. This remained a key challenge during FY26, particularly in the first half.

• Mitigation- Robust project planning, improved site monitoring, and disciplined resource allocation help enhance execution efficiency and minimise project delays. A diversified project pipeline across multiple geographies further reduces concentration risk.

• Margin Pressure in EPC Business: Rising raw material costs, subcontractor inflation, and execution inefficiencies may impact project profitability and operating margins. Fixed-price contracts can further increase cost sensitivity.

• Mitigation- Focus on better project selection, cost optimisation, strategic procurement, and tighter contract structuring, including escalation clauses where feasible, helps protect margins and improve profitability.

• Real Estate Demand & Sales Risk: Slow inventory absorption, weaker consumer sentiment, or elevated home loan interest rates may affect booking momentum and cash inflows from residential projects.

• Mitigation- A balanced portfolio across value housing, premium housing, and redevelopment projects helps diversify demand risk, while project launches remain aligned with market demand and location attractiveness.

• Project Concentration Risk: Dependence on a few large projects or specific geographies may expose the business to localised disruptions or client-related risks.

• Mitigation- Continued diversification across EPC, real estate, redevelopment, and strategic partnerships helps broaden the revenue base and reduce concentration risk.

• Regulatory & Approval Risk: Delays in statutory approvals, redevelopment clearances, or regulatory changes may impact project launches and execution timelines.

• Mitigation- Proactive regulatory engagement, strong compliance systems, and early-stage due diligence support smoother project execution and timely approvals.

• Competitive Intensity: Increasing competition from regional and national players may exert pressure on bidding margins and market share.

• Mitigation- Strong brand equity, nearly 40 years of execution experience, quality delivery, and strategic partnerships such as the Adani collaboration strengthen competitive positioning.

Risks are continuously evaluated through a structured risk management framework, enabling timely mitigation and enhancing operational resilience. Vascons diversified business model, strong order book, and disciplined execution approach position it well to navigate sectoral challenges while pursuing sustainable growth.

Human Resources

Human capital remains one of the most valuable assets driving Vascon Engineers Limiteds long-term growth and operational excellence. Continued focus on attracting, developing, and retaining skilled talent across engineering, project execution, and corporate functions supports the Companys business objectives.

As of March 31, 2026, the Company had a total workforce of 751 employees. The annual attrition rate stood at 5%, reflecting the Companys continued focus on employee engagement and talent retention. During FY 2025-26 401 employees underwent training focused on technical capability building, leadership development, and functional skill enhancement.

Emphasis on collaboration, accountability, and continuous learning helps foster a high-performance work culture. Employee well-being, workplace safety, and inclusive growth continue to remain key priorities, supported by various engagement and welfare initiatives.

Internal Control System

The Company has adequate internal control systems commensurate with the nature and scale of its operations. These controls ensure efficient operations, safeguarding of assets, accuracy of financial reporting, and compliance with applicable laws and regulations.

The internal audit function periodically reviews operational, financial, and compliance controls, and the observations are reviewed by the management and the Audit Committee for timely corrective actions. The Company continues to strengthen its control environment through continuous monitoring and process improvements.

Risk Management

The Company operates in a dynamic business environment and is exposed to various risks, including economic slowdown, fluctuations in raw material prices, project execution delays, labor shortages, regulatory changes, and competitive pressures. Changes in interest rates and delays in project approvals may also impact the construction and real estate sectors.

To mitigate these risks, the Company follows a structured risk management framework focused on early risk identification, regular monitoring, and timely mitigation measures. The Company emphasises strong project planning, disciplined execution, cost control, and compliance to minimise operational and financial risks.