Vascon can bank on new projects
Vascon can bank on new projects
Vascon can bank on new projects
VASCON Engineers has been trading range-bound since its listing early this year and has not been able to beat the market. In the past one-week, ET Realty index and BSE Realty gained 5% and 4%, respectively, while the Vascon stock climbed just about 2%.
Over the past five months, Vascon's performance on bourses has not been a great one either. For instance, it was down 7% in the past three months, the stock was down 12%.
Vascon is present in western and southern regions. It recently launched a couple of residential projects, after its IPO and has received a good response to the same. Selling at an average price of Rs 3,500 per sq ft in locations like Nashik, Pune and Coimbatore, the company has clocked a lot of presales. It has also bagged some new EPC contracts and currently its order book stands at Rs 3,500 crore. The company's average size of EPC contracts has increased to Rs 60 crore from Rs 30 crore. Thus, even with a small number of orders, the company is expected to do well. As the company follows the project completion method, EPC will form a major proportion of the overall revenue of the company. For the year ended March '10, the ratio for real estate and EPC in total revenue was 20% and 80%, respectively, and for 2011, it is expected to be 30% and 70%, respectively.
Out of RS 115-crore funds raised, the company has repaid Rs 40 crore of loan and the balance is being utilized as per the issue objectives.
The company's net sales increased 47% for the year ended March 31, '10 at Rs 738 crore compared to Rs 502 crore clocked last year. The Pune-based builder has been able to cut down its operational expenses, thus, boosting EBIDTA margins by 70 basis points to 11.6% in the current year. Net profit margins have just doubled for the same period and are now at 7% at RS 53 crore. Tax outflow was high on account of certain regulatory provisioning being done. Going forward, the company expects to maintain its current growth rate, despite having a high base.
At an annual EPS of Rs 6.71 and current price of Rs 135.2, the company is valued at 20 times its earnings. It can't be compared to standalone contracting companies, as it has a significant exposure to realty as well. Thus, at the current level, investors can look at entering the stock.
Courtesy By: The Economic Times Dtd: June 29, 2010For more information about real estate, real estate india, Indian real estate, property, property in india, Indian property, property for rent, rented property, apartment for rent, rented apartment, flats for rent, rented flats in delhi, property for sale in delhi, apartments for sale in delhi, flats for sale in delhi homes for sale in noida, flats for sale in noida, real estate in noida, investment option in noida, real estate consultant in noida, realty firm houses in noida, residence in noida, residence in delhi, residence in gurgaon, flats for rent in gurgaon Log in to http://www.zameen-zaidad.com/ And http://www.propertycafeteria.comhttp://www.articlesbase.com/home-business-articles/vascon-can-bank-on-new-projects-2788156.html
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