Techno Electric & Engineering Company Limited — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

Techno Electric is undergoing a fundamental transformation, leveraging its EPC expertise to build high-value annuity assets in data centers and smart metering. The quarter showed strong operational leverage with profit growth (45%) significantly outpacing revenue growth (26%). With a debt-free balance sheet and ₹2,600 crores in consolidated cash, the company is well-positioned to fund its ₹5,000 crore data center capex plan through 2030.

Highlights

  • Revenue for Q3 FY26 grew 26% YoY to ₹857 crores, with 9-month revenue reaching ₹2,209 crores.

  • Profit After Tax (PAT) surged 45% YoY to ₹151 crores for the quarter; 9-month PAT stands at ₹373 crores.

  • Order book remains robust at ₹10,200 crores as of December 31, 2025, with an additional ₹750 crores in L1 positions.

  • Company is transitioning from a pure-play EPC to a digital infrastructure platform focusing on Data Centers and Smart Metering.

  • Chennai Data Center Phase 1 (6MW) is fully operational with an industry-leading PUE of 1.3.

  • Smart metering segment holds a massive order book of 2.24 million meters valued at ₹2,612 crores.

  • Management maintained a bold EPS guidance of ₹75 for FY27, a significant jump from the FY26 target of ~₹15.

Key financials

  1. Revenue ₹857 Cr +26%YoY
  2. PAT ₹151 Cr +45%YoY
  3. EBITDA Margin 14.1%
  4. EPS ₹13 +45%YoY
  5. Order Book ₹10,200 Cr
  6. Cash and Liquid Investments ₹2,600 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 (Conventional)
    ₹10,200 Cr Order Book14% EBITDA Margin
  • Smart Metering
    ₹2,612 Cr Order Book Value2.24 Mn Meters to be Deployed20% EBITDA Margin
  • Data Centers
    6 MW Chennai Phase 1 Capacity60% EBITDA Margin

Guidance & targets

Revenue

  • FY26 Revenue Guidance Revenue · FY26 · High confidence ₹3,300 - ₹3,400 crores
    For 26, my guidance will continue to be on revenue of INR3,300 crores to INR3,400 crores

    — P.P. Gupta, CMD

  • Data Center Revenue (Next 2-3 Years) Revenue · next 2-3 years · Medium confidence ₹400 crores
    we should be able to target -- we should target a top line from data centers of close to around -- maybe INR400-odd crores

    — Ankit Saraiya, Director

Profitability

  • FY27 EPS Guidance Profitability · FY27 · High confidence ₹75
    maintaining the guidance of INR75 in F '27? ... Yes, absolutely.

    — P.P. Gupta, CMD

Capex

  • Data Center Capex Capex · by 2030 · Medium confidence ₹5,000 crores
    we are looking for a capex in data centers of no less than INR5,000 crores over next -- by 2030.

    — P.P. Gupta, CMD

Volume

  • Smart Meter Deployment Volume · by March 2026 · High confidence 1.4 million
    Till March, it should be about 1.4 million.

    — P.P. Gupta, CMD

Risks & concerns

  • Smart Metering Margin Pressure

    medium

    Management is seeing margin pressure in new tenders and has adopted a 'profit over value' strategy, becoming more selective.

    Management acknowledged

  • Global Supply Constraints

    medium

    Large-scale digital projects face global supply constraints; company relies on 40-year relationships with OEMs like Schneider and Siemens to mitigate.

    Management acknowledged

  • Land Parcel Availability

    low

    Delayed availability of land parcels from asset owners is the primary execution challenge cited.

    Management acknowledged

Areas of evasion (2)

  • Specific customer names for Chennai data center due to silent periods.
  • Detailed per-meter capex for smart meters, citing complexity of the value chain.

Q&A highlights

2 direct
EPS Guidance for FY27 Direct
maintaining the guidance of INR75 in F '27? ... Yes, absolutely.

Confirms a massive 5x earnings jump expected in FY27 as new business segments (Data Centers/Smart Meters) scale.

Asked by Mohit Kumar, ICICI Securities

Data Center Margin Compression Direct
when we start building services on top of the data center such as bare metal services or cloud services, it ends up improving the top line, but obviously, it also impacts the EBITDA [margin].

Explains why margins shifted from 70-80% to 60% due to a change in service mix toward managed services.

Asked by Shreyans Gathani, SG Securities

Smart Meter Revenue Recognition Partial
a conservative approach is to capitalize them when whole deployment happens and go-live certificate is obtained from the customers.

Clarifies the accounting treatment and timing of revenue flow for the smart metering business, which is currently in deployment mode.

Asked by Jainis Chheda, Kemfin Family Office

2 min read 5 chapters

Detailed narrative

Strategic Pivot to Digital Infrastructure

Techno Electric is aggressively transitioning from a traditional EPC player to a digital infrastructure platform. The company is leveraging its 45-year expertise in the power sector to build data centers and smart metering assets that generate long-term annuity-like cash flows. Management expects this shift to significantly alter the company's DNA, with digital infrastructure becoming the primary business driver by FY28-29.

Data Center Expansion and Service Evolution

The Chennai Phase 1 (6MW) facility is operational with a PUE of 1.3, and Phase 2 construction is imminent. Beyond colocation, the company is moving into managed services like bare metal and cloud, which target 20-30% of revenue. While this service mix lowers percentage margins to ~60% (from 70-80% for pure lease), it increases absolute EBITDA and top-line potential. Projects in Noida (0.5MW by March) and Kolkata (16MW) are also progressing.

Smart Metering: From Contractor to Service Provider

The company holds a massive order book of 2.24 million smart meters valued at ₹2,612 crores under RDSS and PMDP schemes. Deployment is scaling rapidly, with 1.4 million meters expected to be installed by March 2026. This segment is expected to provide steady, predictable cash flows once projects shift to the O&M phase, balancing the inherent lumpiness of the traditional EPC business.

Robust Financial Position and FY27 Outlook

Techno Electric maintains a zero-debt balance sheet with ₹2,600 crores in consolidated cash, providing the 'financial muscle' to fund its transformation without equity dilution. Management reaffirmed an ambitious EPS target of ₹75 for FY27, driven by the full-scale operationalization of smart metering and data center assets. For FY26, the company is on track for revenue of ₹3,300-3,400 crores and a standalone EPS of ~₹15.

Conventional EPC: The Cash Bedrock

Despite the digital pivot, the conventional EPC business remains the 'cash cow' funding the transformation. The order book stands at ₹10,200 crores, focused on complex, high-voltage (765/400 kV) segments where technical barriers allow for 13-15% EBITDA margins. The company is becoming more selective, adopting a 'profit over value' strategy to avoid low-margin transmission line businesses.

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