Techno Electric & Engineering Company Limited — Q3 FY25 earnings call

Call held 12 Feb 2025

Management summary

Techno Electric delivered a strong Q3 FY25 performance characterized by high execution in the EPC segment and significant progress in its strategic pivot toward Data Centers and Smart Metering. The company is leveraging its massive ₹2,500 crore cash pile to fund high-margin infrastructure assets. While the Chennai Data Center faced regulatory and supply chain delays, it is now nearing commissioning, which is expected to drive significant valuation and earnings accretion from FY26 onwards.

Highlights

  • EPC Revenue for Q3 FY25 stood at ₹676 crores, a massive 85% YoY increase.

  • EBITDA grew 120% YoY to ₹99.22 crores, with margins expanding to 14.68%.

  • Robust order book of ₹9,700 crores as of December 2024, with a target to close FY25 at ₹10,000 crores+.

  • Management reaffirmed EPS guidance of ₹35 for FY25 and ₹50+ for FY26.

  • Data Center pivot accelerating: Chennai Phase 1 (5.6 MW) RFS expected by March 2025; Mumbai project to start in April 2025.

  • Cash and cash equivalents stand at approximately ₹2,500 crores following a successful ₹1,250 crore QIP.

  • Smart metering execution on track with 4.5 lakh meters already achieved across MP and J&K.

Key financials

  1. Revenue (EPC) ₹676 Cr +85%YoY
  2. EBITDA Margin 14.7%
  3. PAT ₹105 Cr +35%YoY
  4. EPS ₹9
  5. Order Book ₹9,700 Cr
  6. Cash & Equivalents ₹2,500 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.

Segment breakdown

  • EPC Business
    ₹676 Cr Revenue14.7% EBITDA Margin
  • Data Centers
    ₹450 Cr Capital Deployed (Chennai)250 MW Target Capacity (2030)

Guidance & targets

Profitability

  • EPS Profitability · FY25 · High confidence ₹35
    We reaffirm that our EPS for this year no less than INR35 as committed.

    — Padam Gupta, CMD

  • EPS Profitability · FY26 · High confidence ₹50+
    for next year – next year or current what I want to say INR45, INR46 it will be almost INR50 plus.

    — Padam Gupta, CMD

Revenue

  • Annual Revenue Target Revenue · FY25 · High confidence ₹2,400 crores
    And for this financial year, we should be expecting a top line of around INR2,400 crores.

    — Padam Gupta, CMD

  • Monthly Revenue Target Revenue · FY26 · Medium confidence ₹300 crores
    Next year, we will be targeting this to further move up to INR300 crores per month for the financial year '26.

    — Padam Gupta, CMD

Capacity

  • Data Center Capacity Capacity · by 2030 · Medium confidence 250 MW
    at least by 2030, we should have a capacity of no less than 250 megawatts at least in locations no less than 100 countrywide.

    — Padam Gupta, CMD

Margin

  • Data Center Colocation EBITDA Margin Margin · FY26 · High confidence 80%
    So EBITDA margins of about 80%.

    — Ankit Saraiya, Director

Risks & concerns

  • Data Center Project Delays

    medium

    Chennai project delayed due to regulatory permissions, Red Sea crisis impact on supply chains, and semiconductor shortages.

    Management acknowledged

  • Land Acquisition for Transmission

    medium

    Delays in land parcel handovers for concessions impacted execution in the first half of the year.

    Management acknowledged

  • Supply Chain Disruptions

    medium

    Ongoing concerns regarding the availability of critical components for both EPC and Data Center segments.

    Both acknowledged

Areas of evasion (1)

  • Specific revenue contribution from IaaS (Infrastructure as a Service) in the near term was kept vague.

Q&A highlights

2 direct
Data Center Economics and Rental Yields Direct
you can expect a revenue of about INR10 crores to INR12 crores per megawatt annually of the commissioned capacity... EBITDA margins of about 80%.

Provides the first concrete unit economics for the company's new data center business, allowing analysts to model future profitability.

Asked by Lakshay Agarwal

Impact of DeepSeek and AI Advancements Direct
Actually, look at DeepSeek's and its development, I would say it's actually a very, very positive development instead of negative... the more affordable and accessible the technology becomes, the cake size increases.

Management addresses a key sector risk (AI efficiency reducing hardware demand) by arguing that lower costs will actually expand the total addressable market.

Asked by Saumil Shah

Supply Chain and Execution Challenges Partial
Those challenges will remain and it continues... But probably Techno is the oldest player in this segment and our relationships with all the suppliers is of a partnership.

Acknowledges persistent supply chain risks in transmission and data centers while highlighting their scale as a mitigating factor.

Asked by Resham Jain

1 min read 5 chapters

Detailed narrative

EPC Execution Powerhouse

The EPC business remains the primary growth engine, with Q3 revenue surging 85% YoY to ₹676 crores. Management is targeting a monthly run rate of ₹300 crores in FY26, up from the current ₹200 crores. The order book is robust at ₹9,700 crores, providing multi-year visibility, especially with the expected addition of ₹2,500 crores in transmission orders annually.

Data Center Strategic Pivot

Techno is transitioning from an EPC player to an asset owner in the data center space. The Chennai facility (24 MW total, 5.6 MW Phase 1) is nearing completion with ₹450 crores already deployed. Management expects this segment to generate ₹10-12 crores revenue per MW annually at 80% EBITDA margins. The long-term goal is 250 MW capacity by 2030, targeting $250 million in annual revenue.

Smart Metering Momentum

The company has successfully installed 4.5 lakh smart meters across Madhya Pradesh and Jammu & Kashmir. They aim to install 1 million meters annually with a total investment target of ₹2,500 crores. Management noted that the Ministry of Power's weekly reviews are ensuring smooth deployment and timely payments from DISCOMs.

Capital Allocation and QIP

Following a ₹1,250 crore QIP, the company has a massive cash reserve of ₹2,500 crores. This capital is earmarked for high-IRR infrastructure projects, including data centers and transmission concessions (TBCB). Management emphasized that these assets are value-accretive and will significantly boost the company's valuation beyond traditional EPC multiples.

Transmission and TBCB Opportunities

The transmission sector is seeing a massive uptick due to renewable energy integration. Total bids open in the market are around ₹40,000 crores. Techno expects to book ₹2,500 crores in orders annually from this segment. They are also executing their own TBCB projects with a capex of approximately ₹700 crores, further shifting the business mix toward recurring revenue models.

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