Techno Electric & Engineering Company Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Techno Electric delivered a steady performance in H1 FY26, aligning with its historical seasonality where H1 contributes 40% of annual revenue. The company is aggressively pivoting towards high-value services in the Data Center segment while maintaining its core strength in Power Transmission and Smart Metering. With a massive cash pile of ₹2,600 crores and a debt-free balance sheet, the company is well-positioned to fund its ₹1 billion Data Center ambitions through internal accruals and selective partnerships.

Highlights

  • H1 FY26 Revenue reached ₹1,352 crores, representing 40% of the full-year target of ₹3,500 crores.

  • Q2 FY26 Revenue stood at ₹839 crores with an EBITDA of ₹158 crores (13.8% margin).

  • H1 FY26 PAT reported at ₹222 crores (15% margin) with an EPS of ₹21.21, up 23.6% YoY.

  • Order book remains robust at approximately ₹10,350+ crores including recent September wins.

  • Management maintained a strong EPS guidance of ₹50 for FY26 and ₹75 for FY27.

  • Data Center vertical scaling up with Chennai Phase 1 (5.6 MW) inaugurated and Gurgaon Edge DC operational.

  • Cash and liquid investments stand at ₹2,600 crores (roughly ₹225 per share).

  • Smart meter execution is on track with 50% of the 2.5 million meter order book already deployed.

Concerns

  • Transmission Infrastructure Bottlenecks

Key financials

3 periods

Headline

  • Order Book
    ₹10,350 Cr
  • Cash Balances
    ₹2,600 Cr

Q2 FY26

  • EBITDA Margin
    13.8%
  • EPS
    ₹10.61
    YoY +34.6%

H1 FY26

  • Revenue
    ₹1,352 Cr
  • PAT
    ₹222 Cr

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.

Guidance & targets

Revenue

  • Full Year Revenue Target Revenue · FY26 · High confidence ₹3,500 crores
    That is 40% of INR3,500 crores F '25 financial year 2026 targets. We remain on track to meet our H2 targets.

    — P.P. Gupta, Chairman and Managing Director

  • Data Center Top Line Contribution Revenue · FY27 · Medium confidence ₹125 crores
    We expect the data center vertical to contribute close to about INR125 crores in top line during the financial year '27.

    — Ankit Saraiya, Director

Profitability

  • EPS Guidance FY26 Profitability · FY26 · High confidence ₹50
    We have guided for INR50 EPS for this year and INR75 for next year.

    — P.P. Gupta, Chairman and Managing Director

  • EPS Guidance FY27 Profitability · FY27 · High confidence ₹75

    — P.P. Gupta, Chairman and Managing Director

Margin

  • Data Center EBITDA Margin Margin · FY27 · Medium confidence 75%
    we can expect a top line of close to around INR8 crores per megawatt and a margin of around 75%-odd.

    — Ankit Saraiya, Director

Capex

  • Chennai Data Center Phase 2 Investment Capex · CY26 · Medium confidence ₹225-250 crores
    we will start our Phase 2 in the calendar year '26. And on every phase, we can expect an investment of close to around INR225 crores to INR250 crores

    — Ankit Saraiya, Director

Other

  • Order Inflow Target Other · FY26 · Medium confidence ₹3,000 crores

    Previously ₹3,500 crores → ₹3,000 crores

    But just as a conservative approach we have, we only guided you INR3,000 crores to INR3,500 crores, you may take it, but maybe it's close to INR4,000 crores.

    — P.P. Gupta, Chairman and Managing Director

Risks & concerns

  • Transmission Infrastructure Bottlenecks

    high

    Renewable energy projects are 'stranded' because evacuation infrastructure (grid, feeders) is not being made ready in time.

    Management acknowledged

  • Execution Challenges

    medium

    Supply chain issues, climate change impacts, and readiness of grounds for deployment are cited as key hurdles.

    Management acknowledged

  • Data Center Project Delays

    medium

    Mumbai data center completion target shifted to end of financial year due to land handover delays.

    Analyst acknowledged

Areas of evasion (1)

  • Specific bottom-line details for the Data Center vertical in FY27 were deferred as 'speculative' for now.

Q&A highlights

3 direct
Confidence in FY26 EPS Guidance Direct
You see our previous years' track record... first two quarters are generally not more than 40% at which you can see our INR50 guidance, we are already exceeding INR20 plus EPS already in first two quarters.

Confirms management's confidence in meeting full-year profit targets despite a seemingly lower H1 run-rate, citing historical seasonality.

Asked by Garvit Goyal

Order Inflow Selectivity vs. Growth Direct
We want juicy business. We want quality business, a business which can happen in time. And we can make good bottom line out of it... booking order... has no value to you and me as a company.

Reveals a strategic shift from aggressive bidding to selective, high-margin execution to avoid bottlenecks and ensure profitability.

Asked by Sarvesh Gupta

Data Center Unit Economics and Leasing Direct
We start booking our first revenue from Chennai data center from the month of November onwards... we have leased out about... close to about 0.5 megawatt.

Provides the first concrete timeline for revenue generation from the new Data Center vertical and current utilization levels.

Asked by Mohit Kumar

2 min read 5 chapters

Detailed narrative

Seasonality and Execution Pace

Management emphasized that their business is project-driven and highly seasonal, with H1 typically contributing only 40% of annual revenue. For FY26, they are on track with this trend, having achieved ₹1,352 crores in H1 against a full-year target of ₹3,500 crores. The company expects a significant ramp-up in H2, supported by a robust order book of over ₹10,350 crores. They remain confident in achieving an EPS of ₹50 for the current fiscal year.

Data Center Vertical: From Developer to Operator

Techno Electric is transitioning from being a data center developer to an operator, focusing on high-value services like cloud and managed services. The Chennai Phase 1 (5.6 MW) is now operational with revenue booking starting in November 2025. The company expects the DC vertical to contribute ₹125 crores to the top line in FY27 with high EBITDA margins of approximately 75%. Total planned capacity in Chennai is 24 MW, with Phase 2 expected to start in CY26 with an investment of ₹225-250 crores.

Strategic Selectivity in Bidding

In response to margin pressures in new tenders, the company has adopted a selective bidding approach. Management stated they are not pursuing additional projects just to grow the order book but are focusing on 'juicy' and executable business. This strategy aims to improve operational efficiency and scalability within the existing portfolio, particularly in segments like FGD and Smart Metering where they already have significant commitments.

Transmission and Renewable Energy Outlook

The company views the transmission sector as the primary bottleneck for India's renewable energy transition. With over 50 GW of renewable capacity currently stranded due to lack of evacuation infrastructure, management sees a massive multi-year investment cycle ahead. They are evaluating strategic partnerships to jointly bid for Tariff Based Competitive Bidding (TBCB) projects to expand their participation in this ₹9.1 trillion opportunity.

Smart Metering and FGD Progress

Techno Electric is currently executing a 2.5 million smart meter order book, with 50% already deployed. The balance is slated for completion by September 2026. Similarly, FGD projects are progressing as per schedule despite some regulatory and policy-related delays in the broader industry. The company is prioritizing the timely completion of these ongoing projects to ensure cash flow discipline.

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