Vascon Engineers secures Rs 198 crore SBI construction contract in Pune

Vascon Engineers Limited has received a Letter of Acceptance from State Bank of India's Premises and Estate Department, Maharashtra Circle, for a Rs 198 crore Construction project at Hinjewadi in Pune.

The domestic EPC contract covers construction of SBILD, residential flats and other commercial facilities. The order value excludes Taxes and is scheduled to be completed within 24 months.

The order provides a fresh addition to Vascon’s EPC pipeline at a time when the company is seeking to improve the pace of project execution following a weak start to FY27. Based on Vascon’s FY26 net sales of Rs 949.29 crore, the newly awarded contract is equivalent to about 21 per cent of its annual revenue in the previous financial year.

Vascon said its promoter, promoter group and group companies have no interest in the awarding entity. The transaction does not qualify as a related-party transaction.

The Pune-based company operates in EPC services and Real Estate development, with its construction division executing residential, commercial, industrial and institutional projects. Government and institutional work has been an important component of its EPC operations. At the end of FY26, government projects accounted for around 79 per cent of its reported EPC Order Book, according to the company’s annual disclosures.

The latest SBI order is also consistent with management’s stated focus on building a pipeline in institutional infrastructure, healthcare, residential complexes, commercial projects and infrastructure. In its recent quarterly commentary, Vascon said it was targeting order bookings of Rs 1,500 crore to Rs 2,000 crore during FY27, while prioritising improved execution and cash-flow efficiency.

The contract comes after a softer June quarter, when Vascon’s net sales declined 31.3 per cent year-on-year to Rs 151.94 crore. Profit after tax fell 91.3 per cent to Rs 1.99 crore. Management attributed the subdued performance primarily to delayed execution at certain government projects and said the issues were related to project timing and client-side cash-flow constraints rather than a deterioration in EPC demand.

That execution context remains important for the new SBI assignment. While order inflows improve revenue visibility, the financial benefit will depend on mobilisation, construction progress, billing milestones and collections over the two-year delivery period. Vascon has also acknowledged that working-capital cycles had stretched in recent months, partly because certain EPC projects required expenditure before bill certification.

As of 9:41 am on October 16, 2026, Vascon Engineers shares were trading at Rs 32.27, up 6.71 per cent from the previous close of Rs 30.24. The stock was about 53.5 per cent below its 52-week high of Rs 69.43, though around 19.1 per cent above its 52-week low of Rs 27.10.

Over the past year, the stock has declined 57.42 per cent, compared with a 5.17 per cent fall in the BSE 500, indicating an underperformance of about 52.25 percentage points. The SBI project therefore adds a meaningful order win for Vascon, but investors will continue to monitor whether the company can convert its project backlog into revenue and cash flows more consistently.

Disclaimer: The article is for informational purposes only and not investment advice.