Vascon Engineers Limited (VASCONEQ) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Vascon Engineers Limited Q4 and FY '20 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Dr. Santosh Sundararajan from Vascon Engineers Limited. Thank you, and over to you.

Thank you. Good morning, everyone. I welcome you all to the earnings conference call of Vascon Engineers for the quarter and year-ended March 31, 2020. Joining me on this call is Mr. Rajesh Mhatre, CEO of our Real Estate division. I'm sure you must have gone through the Q4 and FY '20 financial results and results presentations uploaded on the stock exchange and on the company's website. I hope you all are staying safe. To start with, I would initially brief you on the company's performance during the quarter, followed by the industry opportunities. We are pleased to share that in financial year 2020, we have received order intake of INR 1,671 crores, which is the highest ever order intake in a year. With this, we have significantly surpassed the set target at the beginning of the current financial year. Our current total order book stands at INR 2,060 crores with an external order book of INR 1,953 crores and an internal order book from our real estate launches at INR 107 crores. In the current financial year, we have entered into a new segment with the order for metro work from Metro Rail Corporation in Mumbai and in Bangalore. Also, we have received an order from the Airport Authority of India for an extension of existing terminal building at Goa. With the government impetus on developing more than 100 airports by 2025 under the Udaan scheme and metro rail connectivity in 15 new cities, this has opened up new avenues of growth for the company. Our business was moving back on the high-growth trajectory with a huge order inflow in the current fiscal year, which got slightly impacted to the unprecedented pandemic situation right now. In Q4 FY '20, our EPC revenues had a minor impact of COVID-19 as construction activities had come to a grinding halt across the country due to the nationwide lockdown. However, we resumed the operations at majority of our sites while ensuring that all safety measures set out by the government are being adhered to. We expect a gradual ramp-up in construction activities. Our current order book is comfortable and gives us strong visibility of EPC revenue growth for the next 2, 3 years. We are confident that the execution of new orders within stipulated time and costs will lead to better capacity utilization and better margin for EPC going forward. Over the last couple of years, our insistent focus has been on improving the liquidity of the company. During the year, we have achieved a significant milestone. We have successfully monetized the land parcel in Pune, which has generated net cash flow post tax of INR 52 crores to the company. The proceeds were partly utilized towards deleveraging of the balance sheet and business operations, resulting in strengthening of our balance sheet and aided in maintaining the adequate liquidity during these difficult times. In the wake of the current crisis, the sector is facing working capital issues as banks and NBFCs are getting risk covers wherein company's liquidity is sufficient to carry out operations smoothly, and we do not foresee any liquidity concern in the near term. Now coming to the Real Estate division. We would like to inform you that all our launches made in recent pasts are progressing well. Also, we have witnessed a fair uptake in Windermere and Goodlife in the current financial year. In FY '20, the company did new sales bookings of 1.35 lakh square feet, amounting to a total sales value of INR 116 crores. Current crisis is expected to create short-term demand disruption in the sector. At Vascon, the impact of demand disruption would be less as the company's existing unsold inventory is very low. Presently, we are focused on liquidating our existing inventory with the support of strong real estate sales and marketing team. Going forward, we will be very cautious with launching new projects. We will thoroughly review the product timing and pricing of the new launches. It's a challenging time for the sector to combat the impact of the global pandemic COVID-19. The government has announced several measures like release of partial BG as against proportionate work done, reduction of borrowing rate, extension of 3-, 6-month construction time line, moratorium on term loans for 6 months, liquidity schemes of INR 30,000 crores for NBFCs and HFCs, consideration of real estate projects under force majeure, et cetera. We believe government efforts through policy reform will provide the required support to the sector. With economic revival, we expect the sector will also move back to the growth trajectory. Let me take you through the financial performance. Let me start with the stand-alone numbers. During FY '20, the company reported a total income of INR 383 crores as against INR 392 crores in FY '19. EBITDA for FY '20 stood at INR 62 crores with a margin of 16%. Profit after tax stood at INR 38 crores in FY '20 as against INR 15 crores in the corresponding period last year. The PAT margin stood at about 10%. On a consolidated basis, during FY '20, the company reported a total income of INR 541 crores. The EBITDA grew by 68% year-on-year to INR 74 crores with an EBITDA margin of 14%. Profit after tax stood at INR 40 crores in FY '20 as against INR 5 crores in FY '19. The PAT margins are at 7%. Total gross debt as on March 31, 2020, is INR 254 crores. We intend to reduce the debt in few quarters with the incremental cash flow generated from asset sales and Windermere apartment sales. We would like to reiterate that our strong growth and experience, along with the strengthened balance sheet, will aid us to tide through this tough time. And with efficient execution capabilities, we trust to maintain that the momentum going forward, supported by our strong order book and strong pipeline of launches in real estate. With this, we can open the floor for questions. Thank you very much.

[Operator Instructions] The first question is from the line of Rohit Natarajan from Antique Stockbroking.

Sir, I understand that the current situation is quite grim. And earlier, we were targeting close to INR 600-odd crores kind of number from the EPC's division itself because the kind of order backlog that we have is at nearly -- at multiyear high. So now that given the current situation is looking like, how would you want to throw upon some light on how the execution will happen across all these projects? More importantly, on the Chhattisgarh project and the Maharashtra project, please?

Yes. See, we had an order book of close to INR 1,700 crores last year, comprising primarily of the Chhattisgarh project, the Police Housing in Pune and a couple of others, the Bangalore projects, Goa airport, and housing project in Pune for the government and a couple of private projects that we bagged. Now, I would state that as of March -- as of the end of last year, out of the INR 1,600 crores, only the Chhattisgarh project has really taken off, and we have not executed more than INR 50 crores out of this entire INR 1,700 crores new orders that we have taken. So it's good to say that almost the entire order intake is still pending execution, which is good news. The good news also is that all of these projects now, as it stands today, all of these projects have started, they've got their requisite permission. The police housing in Pune was stuck for the last few months for permission to demolish some existing structures there. We've got that, and we've started demolition. The housing project in Pune was also stuck for approvals for a long time, but we've got those approvals, and we've started work from March. The Goa airport work has started. The MMRCL project, the latest one that we bagged in South Bombay, also the work is starting in July. The Bangalore project, the work has started from March, and we have labor over there. So the good news -- and Chhattisgarh, of course, is at the full speed. Now the only issue is the issue of migrant labors. We only have less than 40% of our desired strength of labor currently, and we are in touch with all the contractors. The labors are giving positive signals that they would be coming back as soon as possible, as soon as the trains efficiently function and a little bit of positivity comes out of Pune and Bombay in terms of the COVID situation. So we are hoping and with fingers crossed that by next month, the labor will start coming back. And all these projects have started, the entire order book is available for the execution. So to answer your question, yes, we were targeting close to INR 600 crores from EPC alone. Quite clearly, that is no longer possible as a target. It's very difficult for us to speculate on a target because we really do not know when the labor is going to come back in full strength. But having said that, we are still very much poised to do better than what we've done in March '20 in both top lines and bottom lines.

Okay. Sir, and the second leg of the question comes in terms of the cost overruns. That is during this tenure, you will obviously -- your EPC division is anyway incurring annual employee cost of INR 30-odd crore and other expenses of close to INR [ 15-odd ] crores. How that fixed expenses would look like? And the other question is the PVC, price variation costs, within this current phase. Is it scalable? Or what is the magnitude in which you will have to absorb the gross margin losses of -- if any?

Yes. So I'll answer your second part first. The good thing about all our contracts is, one, all key materials are base rated, which means any increase in price for any kind of material. So out of INR 100, generally INR 60 to INR 70 is cost -- INR 60 at least is cost of material in construction and all those materials are covered by escalation clauses. So that is not a worry. Labor, in 70% of our contracts, we have a PWD index cover that will help us cover certain labor escalations. We do anticipate that the labor cost is going to go up, at least in the short term, when labor starts coming back and the demand for labor is going to be higher than the supply over the next few months. Definitely, the labor cost is going to go up till the majority of the labor comes back. So some of that would be absorbed for us by PWD escalation clauses that exist in our government contracts. Some of it, we might have to negotiate with the clients. But in terms of a proportion, it's a very small proportion of our overall costs. So I would say we are fairly covered in terms of risks of escalations. Coming to the first part of your question, in terms of fixed costs. The first quarter, as far as we are concerned, is almost a write-off. June, of course, we are working, but we will be achieving a small proportion of our monthly targets. So we've taken drastic measures within the company to bring down our fixed cost for the year. We have taken the situation head-on. There is no running away from it. We have cut salaries. We have renegotiated rents. We have taken all the measures in the last 2, 3 months possible to ensure that our fixed cost this year are going to be definitely lower than last year unless we really scale up in the last quarter in terms of work done. So we've taken all those aggressive measures needed to bring down our fixed cost.

Sir, in terms of the BG limits, earlier, you were in conversation with SBI, if I'm not mistaken, to raise those limits, and they were expected to revise those limits by March. Is there any progress on that particular development?

So we got -- towards the early part of the year, we got a INR 40 crore limit sanction from UBI. Then we still are looking for another INR 50 crore of sanctions. Now because of COVID, of course, in the 2, 3 last few months, the negotiations with the banks and discussions all came to halt. We've restarted now with a couple of banks for an additional INR 50 crore limit. But the good news from this whole situation is that, as I said in my speech, the government has come forth and said that in government projects where our BGs are stuck, if there's significant completion that has been achieved, then they are ready to now release a significant portion of the BGs that they are holding. And so we are now in discussion both at Lucknow, in Bombay, a couple of old projects where we are almost close to completion, to renegotiate on the amount of BGs they want to keep and release our BGs. Those are happening, so we're bullish on that. And even with those BG releases, we should have INR 30 crore to INR 40 crore limit available within the existing sanctions that we have already. So that can help us further book orders for the year. And yes, we will continue to try and get that INR 50 crore additional limit for this. We already have an assessment from SBI. We just need a tie-up with the bank.

Okay. Sir, just to understand -- to summarize the points that you made, how much is the total nonfund and fund-based limit? And how much you have utilized?

So the fund limit is INR 73 crores CC. I think that stands normally utilize anywhere between INR 65 crores and INR 73 crores depending on -- we keep parking our funds in the CC. So sometimes it's in the range of INR 60 crores, sometimes it goes closer to INR 73 crores. But the nonfund limits, we have is a total of INR 120 crores plus INR 40 crores, INR 165 crore of -- 1 second, INR 120 crores plus INR 40 crores, yes. So INR 160 crore of nonfund limits that we have, all of which roughly INR 140 crores is utilized as it stands, INR 143 crores, I think. So we have a INR 17 crore unutilized. But as I said, we are targeting to get back at least INR 20 crores, INR 25 crores of BGs over the next couple of months from our clients. So that will free up limits to INR 30 crore, INR 40 crore, based on which we can take up at least INR 700 crore, INR 800 crore more of order book.

Okay, sir. And sir, the last question from my side. On the noncore assets, the beach, the hotels or the Kaledonia or Aurangabad anywhere or, even for the matter, GMP, are you planning to do any stake sale as such? Or are we in some kind of conversations?

We are in -- see, Kaledonia, we are in a couple of advanced stage of conversations in Kaledonia. The same goes for Goa hotel, but of course, the COVID situation now, I think, to be fair, the Goa hotel discussion will get postponed by a bit because it's in hospitality, and we all know what hospitality has gone through. So that will take a little bit of a backseat for a month or 2, but we are in discussion for these assets. GMP, not yet. GMP, not at this stage.

Okay. Sir, just one more question, if I could squeeze in. GMP and Real Estate segment will be status quo as the way it was? Or GMP is also witnessing some kind of headwinds in a big way?

See in GMP, it's similar to Vascon EPC in the sense that the fixed cost for these 2 months definitely has to be addressed because no -- work has not been done, there will be no top line. But the good thing for GMP is those orders, whatever order backlog they can catch up on it, unlike Vascon in construction where lost time is lost time. For GMP, they can still try and catch up on the lost orders over the next 3 quarters. So the status, we could hope to ramp up and try and achieve the targets of GMP that they had set for themselves in the beginning of the year. Real Estate is a different story. I think I'll leave it to Rajesh to just take you through on real estate.

So on Real Estate, overall, in the past year also, we have been very, very cautious. In fact, we did just small launches, not more than 1 lakh square feet of fresh new projects that we launched in the previous year. Our focus was always on liquidating the existing inventory, that was the focus area and take new projects cautiously. The COVID situation has not changed the outlook. Obviously, we are more cautious. But overall, in fact, what we achieved last year in terms of sales, we should be in a position to do more, so that will be the focus for the year.

The next question is from the line of Viral Shah from Prabhudas Lilladher.

Congratulation on getting a very good order inflow for FY '20 being the situation what it is. Sir, a couple of questions. In terms of our order book, do you see that any of our projects could get canceled because of COVID? Or there could be some deferment in terms of projects to start exhibition or work to start at ground level? My first question is this.

Yes. So -- see, in the INR 2,000 crore order backlog, almost 75% is government orders, only 20%, 25% is private orders where we are exposed to the housing demand in the private sector. The government orders so far, none of them have, forget about officially expressing anything, even sent any soft signals towards wanting to slow down or reduce or not start or anything. In fact, the pressure is now back on us at all our projects to set targets for the month and catch up on the lost time and catch up on everything. And we are now, of course, struggling to get the labor count in without which catching up is not going to happen. But the good news is that each of the clients is putting pressure on us now to do more and more in July and August and September, and we're setting aggressive targets. So none of the projects so far seem to have any issue in terms of their funding provisions, the government projects, and they seem to be aggressive about finishing the project on time. The private, again, nobody has indicated anything to us. Nobody, in fact, is pushing us, and we are also talking about finishing fast and catching up. However, we would -- we could expect, given that real estate will take a few months to come out of this shock, we could expect them be a little bit cautious on what we project as turnover coming out of the private sector. But yes, I don't see this as a major problem yet. No indication to us.

Sir, as you just mentioned that you have been pressurized from government to actually start the projects on time. Could you elaborate more in terms of [indiscernible] the payment has been made by both center and state or there been some issues on that as well?

Sorry, I couldn't hear you.

Yes. Viral, your audio was breaking.

Yes, can you hear me now?

Yes. I can.

Yes. So, basically, my, sir, in terms of working capital, as you rightly mentioned that there were authorities who have been pushing to start the work on time. So how is the payment structure from center and state authorities in terms of working capital? Or the payments are being made on time? Or you have seen some delay happening on that front?

So so far, see, more than 50% of the government order intake that we got last year, we've started with, we have raised our first bill, and we have received money promptly also. In the couple of projects, MMRCL and police housing, we have not yet raised our first bill, so we wouldn't know. But then again, they -- we are in touch with them in all meetings. And they're very clear that they have the funds in place, and that is why they are pushing. And they're ready to disburse money the moment our bills are cleared. In the other projects in Bangalore, in Chhattisgarh, in Pune, we've already got money from post-COVID. In the last 1 month, we've got our bill certified, we've got money as well from these clients. So that is a very positive news.

Okay. Fair enough, sir. And lastly, in terms of Real Estate, I know Rajesh sir just answered the questions from previous participant. Just to dwell more, the strategy clearly remains to focus on cash flow, right? Cash flow generation launches will be subdued or lower. And we would be -- even believe that price cut is necessary for the sale. Is it clear or there is something that you could elaborate on this?

You're absolutely bang on. See, we were always a very, very cash flow-focused real estate company. In fact, just to strengthen that point, in fact, all our ongoing construction project -- Windermere is our completed project, but ongoing projects Forest County, Forest Edge and Goodlife, whatever buildings we have launched, even if we not sell a single apartment, now the balance receivables is more than sufficient to cover the balance cost of all these projects. So theoretically, we are not taking any additional risk. And we are open to all sorts of possibilities for liquidating the inventory, as you rightly said.

Fair enough, sir. And lastly, in terms of the asset sale which we had, do we have any land parcels remaining in that front or no, that is completely sold, the Forest County, which is mentioned in the presentation?

Yes. So that land parcel has been completely sold. Balance, in fact, we would be having a couple of projects, which are in the process of approval. But obviously, the launching strategy for those projects will totally depend on how the scenario is, how the demand situation is. And we will take all this into consideration before taking the next step overhead.

Viral, I think, to clarify that -- so we still have land pending there. There was one parcel, which was sold and full funds are received and that topic is over. There is still land overall in that same location where we will be launching project.

Fair enough, sir. Fair enough. And lastly, sir, we -- when we look at your presentation and the order book pickup and all, we see that there are some projects which are wet from Pune Metro or Mumbai Metro. So these are pertinent to construction of buildings? Or have these entered into railway construction or -- railway station construction is what I was referring to? Or it is purely buildings which we are referring to?

Yes. So see, we are primarily focused on building buildings, any kind of buildings. We keep saying this. We do not want to stray away from our core expertise and our expertise remains building. Now, fortunately, at the airport project, we've got the terminal building on a design-and-build basis, which adds to our resume. Now on the Metro side, in Bangalore, we have got the construction of the entire Metro shed, which is a terminal construction for the repairs and the parking of the trains. So it's, again, kind of a building. It's a factory building. And in Bombay, it is a residential building on Metro land, although they awarded to us by MMRCL, it is still a residential building tower. So we have not gotten any orders from Metro for wire ducts or underground construction or even stations. We are hoping to get some station orders. But unfortunately, the station orders normally get packaged along with the bridge -- the Metro Rail and the underground construction. And we are not currently in any mood to experiment and digress our expertise and try and attempt Metro Rail and underground tunneling, which has not been our area of focus all these years.

Fair enough, sir. And last question, if I may. When do you expect the situation to come back to your normal efficiency, maybe 6 months, 3 months or 9 months from now?

So see, when what will happen, unfortunately, it's very difficult to predict. Fingers crossed. We don't know where this is heading. There are the 2 aspects to it. See, our labor has gone -- everything else is in place. The projects have started. Clients seem to have the money to pay us. There seems to be no other risk on the table, except now it's a waiting game for the labor to come back. The labor -- we, in fact, had 3,000 labor with us pre -- during the lockdown, and we took care of them. And immediately after the lockdown, I think all of us are aware of the migrant labor situation that happened across. And all of them -- most of them have gone. When they will come back depends, as I said, see North India and in Eastern, Northern India or rather like UP and Chhattisgarh, we are getting labor back on a daily basis. The strength over there is more than 50%, 60% of what we need, and that seems to be increasing also on a weekly basis. So over there, I think our projects will run. When will labor come back to Maharashtra and Karnataka depends, one, when really are they fed up of staying home and when they really want to take the risk to come out and make money again. Point number two, what is the situation of Maharashtra that the media and the fact conveys to them in terms of the risks associated with coming back to Bombay. So maybe we are thinking very much short term, Karnataka, some places in Bangalore project, we'll probably get a labor faster because Karnataka seems to be clear of any COVID news compared to Maharashtra. So having said all this, even if I want to predict, I do not know how to predict. But what we have done internally is we have started projecting to ourselves that in -- first quarter is almost a write-off, second quarter is not going to give us more than 40% of what we had planned, and third and fourth quarter is when we will actually be able to look at 80% and 90% and hopefully 100% of our original targets. So that is the basis on which we are operating, and we have trimmed our fixed cost accordingly to look at that scenario.

[Operator Instructions] The next question is from the line of Nimish Shah from Shah Investment.

Sir, I have a few bookkeeping questions. Can you further step -- what are the steps you are taking to reduce the cost of capital? And what is the current interest rate level on the company level?

Cost to company, I think, is 14%. It's being pulled up primarily by the NBFC debt or the nonbanking debt that we have at Windermere from Kotak. So what steps are we taking to bring down that rate is one thing, what steps are we taking to bring down the principal amount outstanding itself is another point of focus. We had planned to bring down that debt by a good INR 30 crores, INR 40 crores last quarter. But COVID came in, and then we took a cautious call to conserve liquidity during this period of uncertainty. We are still sitting on some cash. At an appropriate moment, over the next 3 months, hopefully, we will be bullish enough to -- once we assess the situation, we'll be bullish enough to take a call to bring down our principle borrowing itself, which will bring down our finance cost. In terms of bringing down the rate, see SBI, our term loan -- sorry, our CC rates with SBI are good enough. It is only this Windermere loan that is at a high cost. So once we've got our CCs, so we'll -- once we bring it down by a bit, we will also be looking at options, other options to tie and get the rate down on this entire borrowing.

Okay, okay. Sir, when I look at the numbers in loans and other financial assets, there is a significant jump of some INR 50-crore-odd. So if you can highlight, sir, the reason for the same?

There should not be an increase in debt.

Which number exactly are you talking about? Can you just quote the number, so that...

Yes. Loans and other financial assets, there is some jump of INR 50 crore.

Okay. So we have actually a project advance of INR 20 crores which is, as I said, in a couple of our real estate projects where we have the project to be launched, we have money lying at INR 20 crores as project advance. And there is an unbilled of INR 7 crores that is leading to about a INR 25 crore to INR 30 crore amount. So I think that totals up to that INR 50 crores. It's not really a borrowing. It's not an increase in debt. It's an asset. No increase in debt. We should have ideally reduced it. But as I said, we haven't done that. We are sitting on some cash, just being cautious, but we have not increased debt also.

Okay. Okay. Sir, and what about the collections for our new project launches, status of that, I mean?

See, existing collections, in fact, we -- last year, we sold INR 116 crores, as Santosh has already mentioned, vis-à-vis, we have collected INR 127-odd crores. We are not seeing any delinquencies as far as the collections are concerned. Obviously, in fact, last year won't be the right barometer because actually, the COVID hit very, very late in the last part of the financial year. The first quarter, definitely, the collections has been very, very slow. So we are just assessing the impact. But considering that most of our undergoing projects, which are ongoing construction projects are backed by bank loans, I don't think we will face a situation where we face any delinquencies as far as the receivables are concerned, unless, obviously, the bank itself has taken a call of actually not disbursing the balance loan, which currently looks like a remote possibility considering the situation. But yes, we'll be cautious about it.

The next question is from the line of Nitin Ranjit from Capstocks.

I was just going through your credit rating report, which we have got about a month back. So it says, we have like INR 42 crore of long-term receivables amounting to about INR 42 crore. So have you made any provisions for that in the past?

So we make provisions, it's an ongoing process. As per the requirements, we do make provisions every quarter depending on the aging of the receivables. Having said that, we also conduct a thorough exercise to look at each receivable case by case and -- along with the auditors and then if it is live and if it is -- many of our projects actually last more than 6, 8 years in Bombay, we've been working at NBCC for almost 8, 9 years. So many of these projects last 6, 8 years. And many of them where we've live projects where we are very clear that these receivables are live and they will be coming back even though they might look like very age-old on the books. So we do that process every quarter, and we provide wherever we need to, and then we retain only what we are sure of.

Okay. So this INR 45 crores of receivables, which have been pending for more than 3 years is from the government itself, from the state government itself?

It will be from all projects. It won't be in a single project. It will be a combination of all projects. And I can assure you we've reviewed it. So if it is still there, it is very much live and very much receivables. It should not be a problem.

Okay. Fair enough. And one more thing -- second, we have touched up on the BG limits just before, but -- and you had said that you've some INR 1,800 crores of pending projects, which we haven't start execution. So have you submitted the BG limits for these projects? Or will ever BG limits be in time so that we could actually start executing these projects?

So all these new projects that we've taken last year, we have submitted the required BGs, whether it's performing BGs or if we have taken any advances in a couple of places, we have submitted the advanced BG. We do not have any more BGs to be given for these projects, all of that is over. And after that, as I said, we have about INR 17 crore, INR 18 crore free limit as of now, and we hope to release from old projects, another INR 20 crores to INR 30 crores of BGs in the next quarter. So that should give us fresh INR 40 crores to INR 50 crores, nearly INR 40 crores of BG limit, which, again, should help us bag additional INR 800 crores of order, which is our target for the year.

Okay. And finally, in terms of long-term debt, do we intend to pay down this year itself through noncore disinvestments? Or will it remain on our books? I'm referring to the Windermere debt.

No, we intend to bring down Windermere debt. That is one of the top targets of the Real Estate division. As Rajesh pointed out, launches of new projects and everything can take a little bit of a backseat once we -- depending on the situation, depending on the clarity we get from the market and all of that. In the meantime, liquidity, the existing inventory in all our projects, that is definitely not on the back seat, that is priority now, and we will be pushing all of that. And we have actually set ourselves a target last year, it's to bring down the Windermere debt by about INR 30-odd crores. We did sell the land, and we still have some cash in hand. So we will use that at an appropriate time as well as we will further sell assets in Windermere and elsewhere to bring down that debt. It's definitely a target to bring down that debt by next March as much as we can.

[Operator Instructions] Next question is from the line of Vishal Gupta as an investor.

I have 2 questions. One is on the EPC, you said labor has gone back, and you've given us some estimate of 40%. But what would the actual labor on-site as a percentage, which would have gone back and what would you be operating on? And any guidance of what you're expecting going forward? That is number one. Number two is on Real estate. Pune last year has been one of the best-performing markets pan-India, whereas we have ended up doing only INR 116 crores sales. So just wanted your views any -- going forward, we understand it will be challenging market. Any particular reasons we did -- it's almost half of what we did last year?

Yes. So I'll take the EPC one in terms of the labor. See, for the current projects, we have in hand at this point of time, our requirement of labor is about 4,000 labors. What we have with us currently is about 1,500, 1,600, so that is the ratio at which, as I said, about 40% is what we have. In Lucknow and Raipur and Adampur in Northern sites, this ratio is more than 50% of the requirement. In Maharashtra and Karnataka, in Maharashtra primarily, it is less than 40%, it is close to 30% of the required labor. That is where we are, as it stands today. That has been our strength for June. This -- these people, who are with us, are the ones who decided not to go back. So these people are working. They have been there since mid-May, and they've been working until now. So this strength of 1,500, 1,600 has remained constant over the last 1 month since the time projects have been allowed to open. For this trend to go up, we are all expecting the trend to start increasing somewhere early July, mid-July. Till then, it looks like labor -- the labor that went back in end of May is going to spend a month or so at home and then decide to come back based on, as I said, train and the new situation from Maharashtra. So our projections for second quarter and third quarter and fourth quarter, of course, are based on an assumption that second quarter will go in the labor coming back, and then we should have the strength available with us for third and fourth quarters. That is an assumption based on which we have projected our -- realigned our strategy or goal for the year.

This is -- we are closer to the market, that is -- we can only assume what is going to happen.

Yes.

And coming to your second question, yes, see, this last few years, we have seen the organized players have gained more and more in terms of market share. In fact, this process basically started with the implementation of demon and GST and RERA. I believe COVID-19 will just accelerate the same situation, and organized players with low leverage and stronger brand will stand to gain. In fact, we also want to be one among them. Having said that, a year before last year, in fact, we had roughly 3,4 new launches that we did. And hence, our sales numbers were the reflection of the same. Previous year, in fact, we were very, very cautious in terms of the new launches that would take. As I mentioned, the focus of the company totally changed from being cash flow focused and not taking any additional risk. At the same time, not taking any projects, which required any additional deployment of capital. So considering that, in fact, we just had -- in terms of square foot, we did launches worth 110,000 square feet only. Of which there was one building Xotech, which we launched and sold completely, in fact, not even in 9 days. And there was another project Forest Edge, Tower B, which we launched and currently, we have sold it more than 50%. Due to the low amount of the assets, which are available, therefore, the sales number, obviously, is a function of that. For the current year, in fact, we have projects worth more than INR 450 crores as pointed in our investor presentation, which theoretically, that projects can possibly be launched, but we will not be doing that. We'll be evaluating the situation cautiously. At best, in fact, we are looking to launch 1 project. And therefore, as I mentioned earlier, the sales numbers would look more or less the same as the previous years. Having said that, if the situation improves, we get one more launch, then you will see drastically a different number.

Understood, sir. Any update on value on the Vascon Goodlife? We've been hearing that Godrej has sold in Mamurdi, a project during the lockdown as well. So are we seeing similar response for that project? Or has it been slow for us?

See, we have been seeing -- see what happens is, we really have discontinued the practice of announcing sales just on the basis of EOI. Because what happens is by the time the entire process takes place, right from taking the check and then the customer getting the home loan and then the unit being registered, it's a very, very long process. So yes, we have received the interest. As and when the units get registered, we'll be announcing the sale.

And there is good momentum. At that -- there is a steady flow every month.

[Operator Instructions] Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Dr. Sundararajan for closing comments. Thank you, and over to you, doctor.

Thank you all, and stay safe. I'll see you all again next quarter. Thank you.

Thank you very much. Ladies and gentlemen, on behalf of Vascon Engineers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.