Techno Electric & Engineering Company Limited — Q1 FY26 earnings call

Call held 13 Aug 2025

Management summary

Techno Electric delivered a strong Q1 performance with significant margin expansion and profit growth. The company is successfully pivoting from a pure-play EPC firm to an asset-heavy model involving Data Centers and Smart Metering (AMI), which are expected to drive higher margins (50-80% EBITDA) in the coming years. Despite a slowdown in the FGD segment and a temporary working capital spike in June, management remains highly bullish on achieving a 40-50% CAGR and substantial EPS growth through FY27.

Highlights

  • Revenue for Q1 FY26 stood at ₹515 crores, representing a 25% YoY growth.

  • EBITDA increased by 42% YoY to ₹80 crores, with margins expanding to 15.6% from 13.7%.

  • PAT surged 78% YoY to ₹99 crores, supported by a significant jump in other income to ₹58 crores.

  • Order book remains robust with ₹1,408 crores of unexecuted orders plus ₹720 crores in L1/advanced stages.

  • Management guided for a 40-50% CAGR over the next two years, targeting ₹3,600 crores revenue in FY26.

  • EPS guidance set at ₹50 for FY26 and ₹75 for FY27, driven by high-margin data center and AMI businesses.

  • Company maintains a strong cash position of approximately ₹2,500 crores following asset monetization and QIP.

  • Chennai data center (5MW) is ready for operations; Mumbai edge data center expected by December 2025.

Key financials

  1. Revenue ₹515 Cr +25%YoY
  2. EBITDA ₹80 Cr +42%YoY
  3. EBITDA Margin 15.6%
  4. PAT ₹99 Cr +78%YoY
  5. EPS ₹10.7
  6. Other Income ₹58 Cr +152%YoY

What they filed

Q1 FY27: revenue up 24.9%, net profit down 22.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue500 676 812 514 839 +68%857 +27%1,043 +28%642 +25%
EBITDA70 99 103 79 115 +64%121 +22%132 +28%89 +13%
Net profit90 105 133 123 123 +37%152 +45%143 +8%96 −22%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • EPC (Transmission & Distribution)
    14% EBITDA Margin Benchmark₹1,408 Cr Order Book
  • Wind Power
    ₹15 Cr Revenue80% EBITDA Margin
  • Data Centers
    ₹25 Cr FY26 Revenue Guidance80% Target EBITDA Margin (Bare Rental)

Guidance & targets

Revenue

  • Annual Revenue Revenue · FY26 · High confidence ₹3,600 crores
    the guidance for this year, EPS INR50 and revenue INR3,600 crores, is that intact, sir? Padam P. Gupta: Yes, yes, absolutely. They are intact.

    — Padam P. Gupta, Chairman and Managing Director

  • Order Intake Revenue · FY26 · High confidence ₹3,500 crores
    We expect the order book momentum to continue and order intake for the financial year would be around INR3,500 crores.

    — Padam P. Gupta, Chairman and Managing Director

  • Revenue Growth CAGR Revenue · next 2 years · High confidence 40-50%
    This simply reflects we will have enough orders in hand to keep the growth momentum of around 40% to 50% CAGR for next 2 years.

    — Padam P. Gupta, Chairman and Managing Director

Profitability

  • EPS Profitability · FY26 · High confidence ₹50
    Accordingly, the EPS forecast is INR50 for the current year

    — Padam P. Gupta, Chairman and Managing Director

  • EPS Profitability · FY27 · Medium confidence ₹75
    and around INR75 for the next year.

    — Padam P. Gupta, Chairman and Managing Director

Capacity

  • Smart Meter Deployment Capacity · by end of FY26 · High confidence 1.7 million
    And by end of this year, we should be at around 1.7 million to 1.8 million meters

    — Padam P. Gupta, Chairman and Managing Director

Risks & concerns

  • Counterparty Risk in DISCOMs

    medium

    Management is capping exposure to the Smart Metering segment at 3-5% due to high counterparty risk and slow reform visibility in some states.

    Management acknowledged

  • Data Center Execution Delays

    medium

    Chennai data center faced delays due to regulatory permissions and supply chain disruptions, though phase 1 is now complete.

    Management acknowledged

  • FGD Policy Uncertainty

    low

    Government reclassification of FGD requirements into categories A, B, and C has slowed the segment, but Techno's exposure is limited to <5% of revenue.

    Both downplayed

Areas of evasion (1)

  • Specific ballpark margins for the consolidated business at the end of the 40-50% growth phase were deferred to Q3.

Q&A highlights

3 direct
FGD Segment Slowdown Direct
FGD was never a big time focus as a top line growth for Techno... we wanted our presence to be no more than 5% in this marketplace.

Clarifies that the policy-driven slowdown in Flue Gas Desulphurization (FGD) projects is not a material risk to the company's growth strategy.

Asked by CA Garvit Goyal

Data Center Revenue Contribution Direct
In '26, it will be very negligible... maybe INR25 crores to INR30 crores, but it will be a little more significant next year... growing to INR100 crores to INR200 crores.

Sets realistic expectations for the timing of data center revenue, highlighting that FY27 will be the true breakout year for this segment.

Asked by Ankit Madhwani

Working Capital Spike Direct
It was very momentary in June... in July itself, we realized no less than INR250 crores out of these outstandings. So now it is back to normal.

Addresses concerns about rising working capital days by explaining it as a temporary delay in government fund releases that has already been resolved.

Asked by Deekshant

2 min read 5 chapters

Detailed narrative

Strategic Pivot to High-Margin Asset Businesses

Techno Electric is transitioning from a traditional EPC company to an asset-owner in the Data Center and Smart Metering (AMI) sectors. The Chennai data center is now operational with a 5MW capacity, and the company expects an 80% EBITDA margin on bare rentals. While FY26 revenue from data centers will be modest at ₹25-30 crores, it is projected to scale to ₹100-200 crores in FY27 as Mumbai and other locations come online.

Robust Order Book and Growth Guidance

The company reported an unexecuted order book of ₹1,408 crores as of June 2025, with an additional ₹720 crores in L1 or advanced stages. Management is targeting an order intake of ₹3,500 crores for the full year FY26. This pipeline supports a confident guidance of 40-50% CAGR over the next two years, with FY26 revenue expected to reach ₹3,600 crores.

Financial Strength and Cash Utilization

Techno remains a debt-free company with a massive cash surplus of approximately ₹2,500 crores, derived from asset monetization (₹1,500 crores) and a recent QIP (₹1,250 crores). This capital is being deployed into value-accretive assets like data centers and transmission projects acquired under the TBCB mode. The company has already deployed ₹1,250 crores in CapEx over the last two years.

Smart Metering Strategy and Risk Management

The company has won concessions for 2.5 million smart meters, with 0.8 million already deployed. Management expects to reach 1.7 million by the end of FY26. Despite the massive ₹3 lakh crore opportunity in the RDSS scheme, Techno is intentionally limiting its exposure to 3-5% of the total market to mitigate counterparty risks associated with state DISCOMs.

Working Capital and Execution Efficiency

Management addressed a temporary spike in working capital during June, attributing it to delayed government fund releases. However, they confirmed that ₹250 crores was recovered in July, bringing the cycle back to normal. The company continues to focus on 'compressed schedules' for substation projects, which improves resource productivity and optimizes establishment costs.

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