Mumbai, Aug. 18 -- Pune-based construction firm Vascon Engineers has received a letter of intent for a contract worth Rs 1,263.9 million (mn) to build a 300-bed general hospital in Wardha, Maharashtra, the company informed stock exchanges. The letter of intent came from the Executive Engineer of the Public Works Department, Arvi Division, Wardha, Nagpur, and the contract has been awarded on an item rate basis. The firm said the work must be completed within 24 months of receiving the order and that the contract does not fall within the ambit of related party transactions.
The Wardha project adds to Vascon Engineers' institutional and healthcare infrastructure order book at a time when several state governments have stepped up spending to expand public health facilities in tier-two and tier-three towns. The company noted that the new order will bolster its project pipeline and assist in addressing near-term demand for institutional construction. The award underlines continued opportunities in public sector healthcare commissioning across smaller urban centres.
The order comes amid a sharp decline in the company's fourth quarter earnings for fiscal year twenty six, when consolidated net profit fell 83.54 per cent to Rs 57.2 mn from Rs 347.7 mn a year earlier. Net sales for the quarter also decreased 34.61 per cent to Rs 2,530.8 mn, reflecting subdued activity in certain segments. Management has highlighted the need to strengthen the order book as the company enters the current fiscal period.
Vascon Engineers, which is listed on both the BSE and the NSE, operates across engineering, procurement and construction as well as industrial, residential, commercial and institutional projects and is headquartered at Vascon Weikfield Chambers in Pune. The firm's share price was down 2.87 per cent at market opening, was down 3.59 per cent over the past month and had declined 36.24 per cent over the past year. The company will now focus on executing the Wardha hospital contract over the stipulated period while seeking further orders to improve revenue momentum.
Published by HT Digital Content Services with permission from Construction World.