Vascon Engineers Limited has secured a significant construction contract worth ₹131.58 crore from Reliance Industries Limited, as disclosed in an exchange filing. According to the company announcement, the contract involves the construction of four G+12 FLL Type Buildings for Sector-3 at the RG Expansion Jamnagar facility. The order excludes goods and services tax and forms part of Reliance Industries' expansion plans for its Jamnagar plant. The company received a Letter of Intent (LoI) for the construction of 04 Nos G+12 FLL Type Buildings for Sector-3 at RG Expansion Jamnagar, with the contract awarded on a Bill of Quantities (BOQ) basis. However, this contract announcement came as the company reported weak quarterly financial results, with net profit for Q4 FY26 falling 83% year-on-year to ₹6 crore from ₹34 crore, while revenue decreased 32% to ₹259 crore from ₹385 crore.
The construction project is scheduled for completion within 19 months from the date of order receipt, as detailed in the company's filing. This timeline provides clarity on the project's execution timeline and aligns with the company's operational capabilities. The project scope includes the construction of four buildings at Reliance's Jamnagar manufacturing facility, which is part of the company's broader expansion strategy. The construction contract is domestic in nature and relates to the development of four high-rise residential structures at Reliance's expansion project site in Jamnagar.
Vascon Engineers' share price closed down 4.99% at ₹33.32 on BSE on May 18, 2026, and then hit its lower circuit at ₹32.51, indicating investor concerns over the company's financial performance. The stock had previously closed 3.6% lower at ₹32.93 following Monday's trading session, compared to ₹34.16 at the previous market close. Despite the recent decline, the stock has delivered more than 109% returns over the last five years, though it has lost over 8% in the last three years and dropped 33% in the past one year. In 2026, the company's stock has lost 27% year-to-date and is down 14% in the past month.
The company's Q4 FY26 results revealed significant challenges beyond the Reliance contract win. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) declined 61% to ₹16 crore, with EBITDA margins compressing to 6% from 11% year-on-year. The previous year's results included a ₹75 crore exceptional gain, which was not present this period. Despite these challenges, Vascon Engineers maintains a substantial order book totaling ₹2,717 crore, with external EPC orders making up ₹2,387 crore and ₹762 crore in project inflows recorded for FY26. However, the company's low return on equity of 4.36% and substantial contingent liabilities of ₹374 crore point to operational and financial challenges.
