Q1 2027 Techno Electric & Engineering Co Ltd Earnings Call
Speaker #1: Sent over to Mr. Vidhit Trivedi from Asian Market Securities Pvt. Ltd. Thank you, and over to you, sir.
Speaker #2: Yeah, hi, thank you. Good afternoon, everyone. On behalf of Asian Market Securities, we welcome you to the Q1 FY27 earnings conference call of Techno Electric & Engineering Co., Ltd. We have with us today Shri PP Gupta ji, Chairman and Managing Director; Mr. Ankit Saraiya, Director and CEO; Mr. Amit Agarwal, President, Data Center; and Shivani Chanduk, VP, Strategic Initiative and Investor Relationship.
Speaker #2: I request Shri PP Gupta ji to take us through an overview of the quarterly results, and then we'll begin the Q&A sessions. Over to you, sir, and thank you.
Speaker #3: thank you. Vidhit, very good afternoon to everyone, and grateful for joining Techno Electric & Engineering Co., Ltd.'s Q1 financial year 27 earnings call. Before I begin, I would like to draw your attention to our customary forward-looking statement of the disclaimer; any statement made during this call regarding Outlook should be considered in the context of risk and uncertainties that may impact our industry, our businesses, and the company due to the very geopolitical reasons or the very government programs.
Speaker #3: Going forward, let me also again remind my colleagues present here that quarter-on-quarter comparisons in our type of business are not sound and practical. We have been always highlighting that Q1 is no more than 15% of the annual Outlook and H1 is about plus-minus 40%, and balance 60% happens in H2.
Speaker #3: Of the year, so our results may please be reviewed in this very context. Let me now begin with an overview of the quarter. First quarter: I'm pleased to share that we have continued our growth streak and the revenue for Q1 27 grew by approximately 25% year-on-year.
Speaker #3: Driven by strong planning and execution, across projects despite challenges and chaotic noises, we have also till date secured fresh orders worth no less than 2,200 crores.
Speaker #3: But it includes 666 crore for the first quarter, and balance 1,530 crore till date. Which may again be appealing as a part of Q2.
Speaker #3: And we are also placed L1 in another 2,100 crore of the bids. With the various concession owners, these wins are just not about the quantum of orders but also reflects the trust that our customers place in our technical capabilities, execution track record, and ability to deliver projects on time.
Speaker #3: India is entering the largest power and digital infrastructure build out in its history, and we are among the leading companies delivering the same to make the transformation possible.
Speaker #3: We are propelled by two engines of growth: power where we are legacy leaders, legacy of leadership, and defines transmission and distribution landscape today after having been part of generation till 2010.
Speaker #3: And digital infrastructure, where techno digital is architecting the data centers as ecosystems build on the shared foundation of engineering excellence and financial discipline. Let me start with the engine one: the power transmission business.
Speaker #3: Driven by engineering excellence, our current order book comprises of large and complex high-voltage stations solutions and transmission projects with top industry players including Power Grid, Adani Energy, the Sonia, Ingrid, state leading state utilities, etc.
Speaker #3: These projects are subject across multiple states, and voltage classes and progressing as per the customer requirements and schedules. The sites are fully mobilized, and resource with the team of 650 plus engineering and commercial professionals behind it executing these very projects of national pride.
Speaker #3: Let me now spend a few minutes on the strong demand environment. We are witnessing what is encouraging is that opportunity is not only large but also growing across where we have strong capabilities.
Speaker #3: I would highlight four key developments in particular. First, the transmission sector presents a very strong and visible investment opportunity. India is expecting to invest approximately 9 lakh crores in transmission infrastructure between financially year 26 and financially year 32, driven by countries escalating shift towards renewable energy.
Speaker #3: In yesterday's report in Mint at airport, I saw that the present availability of the feeders no more than 80%, and government has planned another 50,000 crore of extra expenditure to strengthen the interest rate transmission facilities.
Speaker #3: The coming to the macro planning of the government has set an ambitious target of executing about power projects of over 900 gigawatts of non-fossil fuel capacity in next 10 years, including around 548 gigawatts of solar and wind capacity.
Speaker #3: As particularly important of July 26, this will require significant extension of transmission network across the company to facilitate evacuation of the power. Second, demand is setting new records; India met an all-time peak time requirement of 271 gigawatts in May 2026, and this is projected to reach around 480 gigawatts by financially year 32.
Speaker #3: Electricity consumption is growing at an over 6% a year, with data centers and electrification now adding entirely new load category to this system. Third, the scope of work itself is expanding, alongside conventional evacuation packages the grid now needs synchronous condensers dynamically compensations and SVDC corridors.
Speaker #3: A category of high-value technically demanding work that has grown rapidly as the share of renewable generation has risen. Fresh tenders in exactly these segments came to market through July 26.
Speaker #3: This is sophisticated engineering and is where our margin and our reputation live. And fourth, digital substations are the most important shift in grid engineering in a generation moving protection, control, and monitoring from copper to fiber, with real-time visibility on every asset.
Speaker #3: From a control room, we took a position in this technology early. We have delivered on it and are now among the very few Indian companies with proven credentials in it.
Speaker #3: As the country modernizes its grid, this becomes one of our sharpest differentiators including executing smart grids solutions. Our bidding discipline is anchored around three pillars: execution capability, risk-adjusted returns, and balance sheet discipline.
Speaker #3: We bid selectively and pursue the opportunities where we are confident we can execute well and generate attractive returns. With that, I would now invite Ankit to take over and speak on our second engine, the digital infrastructure.
Speaker #3: Ankit, over to you.
Speaker #2: Thank you. And good afternoon, everyone. Our digital infrastructure business was founded on a single conviction that a data center is fundamentally a power asset and that the company which understands power best will therefore build India's digital infrastructure best.
Speaker #2: This quarter, the market validated our conviction in the cleanest possible way. The customer demands have exceeded our planned capacity. In response, we have acted decisively and organically increased the designed IT load of our Chennai campus to support this stronger-than-expected demand.
Speaker #2: Let me explain how we organically expanded the design capacity of our Chennai campus. The first is a decisive shift in Chennai demand. The conversation we are having today are with larger counterparties for larger blocks on longer tenures with faster delivery expectations.
Speaker #2: And over the past two months, this market has seen a sudden surge in enquiries and influx of opportunities. Our read is that several forces have converged.
Speaker #2: The conflict in West Asia has moved deployments towards APAC, available capacity across APAC outside India has been absorbed rapidly, leaving India as the market with supply and Mumbai as a city is largely committed where large demand cannot be catered for 18 to 24 months.
Speaker #2: So demand is flowing to other Indian cities with Chennai leading it. Apart from that, the tax holiday provisioned in the last budget has also added and fueled this sudden surge in demand and opportunities.
Speaker #2: Chennai sits on the east coast as a natural hedge to Mumbai, offers the shortest lowest latency to Singapore, anchors five active submarine cable systems, and has capacity available in short duration across multiple operators.
Speaker #2: In the past two months alone, we have witnessed at least two large-scale transactions in the city of a kind not visible for the previous year or two.
Speaker #1: Hello, Ankit.
Speaker #2: Yeah, am I audible?
Speaker #1: Yes, sir.
Speaker #2: Yeah, sorry, I think my voice got lost. Let me possibly restart. Good afternoon, everyone. Our digital infrastructure business was founded on a single conviction that a data center is fundamentally a power asset and the company which understands power best will therefore build India's digital infrastructure best.
Speaker #2: This quarter, the market validated our conviction in the clearest possible way. The customer demand has exceeded our planned capacity. In response, we have acted decisively and increased the designed IT load of our Chennai campus to support this stronger-than-expected demand.
Speaker #2: Let me explain how we organically expanded the design capacity of our Chennai campus. The first is a decisive shift in Chennai demand. The conversations we are having today are with large counterparties for larger blocks on longer tenures with faster delivery expectations.
Speaker #2: And over the past two months, this market has seen a sudden surge in enquiries and an influx of opportunities. Our read is that several forces have converged.
Speaker #2: The conflict in West Asia has moved deployments towards APAC, available capacity across APAC outside India has been absorbed rapidly, leaving India as the market with supply and Mumbai is largely committed where large demand cannot be catered for 18 to 24 months.
Speaker #2: So demand is flowing to other Indian cities with Chennai leading it. Apart from that, the tax holiday provided in the last budget to cloud operators serving global customers through Indian data centers has further made the country sweeter for capital investments into data centers.
Speaker #2: The city sits on the east coast as a natural hedge to Mumbai offers the shortest lowest latency path to Singapore, anchors five active submarine cable systems, and has capacity available in short duration across multiple operators.
Speaker #2: In the past two months alone, we have witnessed at least two large-scale transactions in Chennai of a kind not visible for the previous year or two.
Speaker #2: The weather in the city of Chennai is changing. Second, within that demand, we are increasingly gaining positions as a preferred operator. As a new entrant, we are more flexible.
Speaker #2: We carry no conflict of interest with large cloud and AI customers. We are the infrastructure partner, not their competitor. And because we are an EPC company, ourselves, our time from commitment to delivered capacity is the shortest in the market.
Speaker #2: The third is our own engineering. The uplift did not come from buying more land or adding another building. It came from an engineers going back into the design, the electrical topology, the cooling architecture, the way we sequence construction, and establishing that a process discipline and design capability allow us to carry significantly more IT load within the same footprint.
Speaker #2: We created that capacity ourselves. It converts directly into more revenue earning capability for the capital we deploy. And it is a form of value creation that very few operators in the market can execute.
Speaker #2: Because very few of them are power engineers first. Let me put numbers to that demand. Approximately 150 megawatt of aggregate IT load demand is under active discussion with global hyperscale AI infrastructure and enterprise counterparties, including six opportunities of more than three megawatt, some of which is at mature stage.
Speaker #2: We have over 30 open opportunities in our funnel. These discussions are at varying stages of maturity. There's the demand picture that led us to re-engineer Chennai rather than simply market it.
Speaker #2: And traction is already in the books. We signed 10 new customer logos during the quarter across co-location, cloud, and interconnection. Including two of India's leading telecom carriers, together subscribing approximately 130 kilowatt of IT load with a wholesale arrangement and a first cloud services engagement additional to that.
Speaker #2: Individually modest collectively these build the carrier and ecosystem density that anchor enterprise demand into a young platform. The Chennai campus is TIA 942B certified across both design and constructed facilities and holds IGBC gold green building certification.
Speaker #2: These standards and green certifications are procurement requirements for hyperscalers and large BFSI buyers and we intend to carry them across entire estate. The facility has a operated on approximately 97% renewable energy in recent months.
Speaker #2: We design at a PUE of 1.35 with 75% lower water consumption than conventional builds. But our ambition has never been a single campus. We are building a national platform and let me take you through this.
Speaker #2: Andhra Pradesh where in two engines converged. We have signed an MOU with a global hyperscaler for a two megawatt data center facility. Our EPC business has delivered multiple substations across Andhra Pradesh and that presence teams on the ground.
Speaker #2: A working understanding of the state's power infrastructure and its local challenges gave us the edge in conclusion. This significance is not the megawattage or hyperscaler completed but a hyperscaler completing its diligence on us and concluded we can deliver to its standards.
Speaker #2: It's an entry ticket that we have earned. We see two megawatt as the starting point with a pathway to multiple megawatt as this engagement scales and we expect our EPC footprint and depth in the power sector to help us convert more such opportunities across the country.
Speaker #2: Coming to Calcutta and Noida, both campuses are advancing on the ground. Noida received its building plan approval in July with all major long lead equipment under manufacturing towards commissioning in the final quarter of FY27 and Kolkata is in foundation works.
Speaker #2: The edge network, our Gurgaon facility is fully occupied and a cloud services operations have also commenced. Mumbai is commissioned and customers are being onboarded.
Speaker #2: Beyond these, we are building towards over 100 edge locations across 23 states with retail arrangement. No other operator in India is assembling a national edge layer of this reach and as computing moves closer to the user, that footprint becomes strategically more valuable.
Speaker #2: We hold a license from DOT and cloud and managed services are live from Gurgaon EDC across private hybrid and sovereign models. We are also preparing towards GPU as a service at our Noida edge facility on an anchor public sector commitment but our approach is disciplined.
Speaker #2: We procure capacity against committed demand. Our architecture is deliberately hybrid. Large campuses for heavy compute, edge layer for everything that must happen close to the source.
Speaker #2: We are bringing both together on one national platform. Stepping back, the national market has moved just as quickly according to industry reports the country added 258 megawatt of data center capacity in the first half of this calendar year up 59% on the same period last year.
Speaker #2: Taking operational capacity to approximately 1.8 gigawatt with projection of more than seven gigawatt by 2030. Cumulative investment commitment into Indian data centers have crossed 126 billion dollars and expected to rise a further 45% this year.
Speaker #2: Across every study of this market, the same enabler is identified as decisive, reliable, well-priced power close to the grid. We build the substations that feed the grid, these campuses draw from, and we bring that engineering directly into how we design power and operate our facilities.
Speaker #2: On revenue, data center revenue tracks customer commissioning, validation, and migration cycles. It builds gradually for a new operator and then compounds at an ecosystem fills in.
Speaker #2: During this ramp phase, we will report contracted capacity and actual segment revenue rather than guide the segment. We expect the revenue trajectory to be weighted towards the second half of the year as committed stage deals close government workload migrates and validation to billing happens.
Speaker #2: And GPU as a service comments under its anchor commitment. We should keep in mind that the higher cost of servers, GPUs, and switches along with supply constraints will extend lead times for workload migration and deployment after definitive agreements are signed.
Speaker #2: Billing currently runs at Gurgaon and Chennai Mumbai is onboarding customers as we speak and Noida follows on commissioning. Our medium term ambition is unchanged 250 megawatt of capacity by 2030 anchored on contracted enterprise led demand with 150 megawatt of pipeline under discussion today strengthening our conviction in the trajectory.
Speaker #2: Apex deployed in Chennai stood at 524 crores. As at 31st March 2026 with cumulative data center capex of INR 628 crores across the portfolio.
Speaker #2: For FY27 investment is primarily concentrated on our Noida and Kolkata build. In short, our approach is simple build ahead of demand where we have visibility scale with customers and deploy capital with discipline.
Speaker #2: The market is increasingly validating the thesis we started with that data center is fundamentally a power asset. Given that, I would like Shivani to speak on a Q1 financial performance.
Speaker #1: Thank you. Ankit and good afternoon everyone. Let me take you through the standalone numbers for the quarter. Revenue from operations for Q1 FY27 stands at 641 crores.
Speaker #1: Against 514 crores in Q1 FY26 which reflects a growth of approximately 25% primarily driven by the project execution. A better for the quarter is at 89 crores versus 79 crores in the last year growth of approximately 13%.
Speaker #1: Our better margin for the quarter stands at 13.88% and profit after tax is 96 crores. On the consolidated level, our revenue from operations in QY FY27 stands at 630 crores against 525 crores in Q1 of FY26 growth of approximately 20%.
Speaker #1: A better for the quarter is 99 crores against 92 crores last year which is growth of 8%. A better margin at consolidated level is 15.79% and profit after tax was 93 crores.
Speaker #1: Our earning per share for the quarter at consolidated level is at rupees 8.02. Let me share a few points which will help you understand these numbers better.
Speaker #1: The margins are in line with our guidance despite the period of real external pressure. While the input cost for transformer CRDO steel and other long lead equipment have been elevated as the order book for manufacturers have more than doubled since FY22, advanced planning for order placement are relationship and with the vendors and control over other cost have led to sustained profitability.
Speaker #1: Our other income has shown a decline which is primarily due to deployment of QIP funds for the underlying projects since June of last year.
Speaker #1: Our EPS for Q1 FY27 was lower versus FY26 primarily because last year the there was a income from discontinued business which translated to roughly rupees two per share of EPS further QIP proceeds that were earning investment income have now been deployed towards our data center AMI and transmission projects resulting in lower other income.
Speaker #1: This reflects the transition of funds from interim investments into our growth businesses. So while fundamentally on the business side we remain on track. With respect to the outlook for the year as we're already aware as the projects given business and this industry earns 40% of its revenue in the first half of the year and 60% in the second half.
Speaker #1: The first quarter for by far in the construction industry is the lightest of our area which is roughly at 15% as mentioned by Guptaji at the ending of this call.
Speaker #1: And during this quarter also we have shown a growth of 25% on our EPC revenues. We are very comfortable with what we had said earlier and we are comfortable and delivering the same.
Speaker #1: On the order book our unexecuted order book as on date stands at 11,000 crores while at 30th June 2026 it was at 9,600 crores.
Speaker #1: But given the orders that we have won post 30th June it is currently at 11,000 crores. Overall our order info momentum has been strong and we are ahead of our projections for FY27 giving us good visibility for the year ahead.
Speaker #1: On the balance sheet we remain debt free with a net cash position and double A rating now I'm handing over to Mr. VP Gupta to continue and speak on a smart metering business.
Speaker #2: Thank you Shivani. Let me turn to smart metering. Which I believe is also one of the most valuable business vertical in the company. As you all know that we had contracted about 2.5 million meters to be installed at four locations.
Speaker #2: Smart meters and this portfolio is is capital intensive in the build phase and also is rewarding in annuity mode that is a segment that funds its own growth and throws off predictable contracted cash flow for years.
Speaker #2: Here is the structure that drives it. We build on and operate capex is front loaded with a 27 month installation period or window. What happens follows is 93 months close to 8 years of contracted O&M revenue against a completed derisk asset once a meter installed there is no further capital at risk.
Speaker #2: It simply generates cash. We as you all know that we have a 2.24 million meters under RDSS scheme. In five states with a revenue commitment of 2,600 crores.
Speaker #2: In the project value by now we have already installed about 18 and a half lakh meters leaving only 4 lakh meters more to be installed out of these concessions Madhya Pradesh is fully saturated and I've achieved goal I now it's in annuity phase and in a cash generating mode.
Speaker #2: The concessions in Ranchi Tripura and JNK are nearly more than 70% complete and are and will be completed progressively before end of this calendar year.
Speaker #2: For investors the relevant read through is capital efficiency as installation completes capital intensive in the segment calls sharply. We do not expect any more capital expenditure in this segment this year will be that will be self funded out of the revenue stream available on the commission meters.
Speaker #2: And the lump sum available on any meter going live every month. Zooming out the addressable opportunity is still large the RDSS carries a sanction outlay of over rupee 3 lakh crores more than 20 crore meters nationally and a program runway to March 28th which I'm sure will be further extended to 32.
Speaker #2: Sector fundamentals are also moving the right way 80 and C losses have fallen from 22% to 15% discounts have moved into aggregate profitability after so many years of losses.
Speaker #2: And overdue payables are down sharply thanks to property portal in place and also the growing profitability no more leakages in the discounts. That translates directly into counterparty quality and collection certainty for anyone holding these contracts.
Speaker #2: Our new bids we are very selective as always the priority is first execution completing what we have on our platter and and position us as a natural fit for the next round of awards.
Speaker #2: With respect to I will only further add as Shivani has said our EPS due to shrinkage in other income or discontinued business may have come down but in our balance sheet you may have observed one hidden asset and having hidden profit in it that is the contracted assets.
Speaker #2: Which are worth about 1,500 crores. As of June 2026. And as and when these assets gets capitalized or monetized they will unlock the bottom line to the company.
Speaker #2: So that will be further another mode of describing the other income. Which will become the business income going forward. With respect to the guidance we remain on track to achieve a revenue of 4,000 crores or more with around 13 to 14% EBITDA margins and current year order book target of 4,000 crores but is likely to be exceeded happy to take questions now.
Speaker #1: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touchstone telephone.
Speaker #1: If you wish to remove yourself from the question queue you may press star and two. Participants are requested to use hands up while asking a question.
Speaker #1: Ladies and gentlemen in order to ensure that management is able to address questions from all the participants in the conference call please limit your question to two per participant.
Speaker #1: Ladies and gentlemen we'll wait for a moment while the question queue assembles. The first question is from the line of Vaibhav Shah from JM Financial.
Speaker #1: Please proceed with your question.
Speaker #2: On ordering flow you mentioned that in Q1 we received 660 crores and YTD is 2,200 crores. Correct?
Speaker #3: Yeah absolutely.
Speaker #2: And L1 is 2,100.
Speaker #3: Right.
Speaker #2: Including L1 and YTD info we already surpassed the guidance of 4,000.
Speaker #3: Yeah you you are right. In a way you are right.
Speaker #2: So can you throw some light what would be the segmental mix of this inflows? Broadly.
Speaker #3: These are largely transmission and high end station business part of the concessions to be deployed by concrete Adani Resonia or InGrid at different locations.
Speaker #3: I will say every month now at least 8 to 10 concessions are getting finalized by the bid coordinators like PFC RDC. So we are partners in these concessions with developers or concession winners you can say.
Speaker #3: So they largely revolve around transmission business and distribution business.
Speaker #2: Okay okay. So secondly our non current investments to that roughly 1,300 crores as of March you had mentioned last time we would be investing another 1,000 crores in data center and roughly 250 crores in smart meters.
Speaker #2: So what would be our targets of investments in this year?
Speaker #3: Yeah it it is more or less the same say we have kept about 1,000 crores for data center but smart meter won't need anymore investment as it has become self cash accreting now.
Speaker #3: We plan to collect about 450 crores during the year out of the smart meter PMPM and lump sum payments and our outgo in deploying the balance meters during the year will be only about 400 crores out of this.
Speaker #3: So this year is more or less self funded the capex requirement is limited only to data centers number two as you have seen our efficiency of the.
Speaker #3: Or bad discipline of the balance sheet we don't need any additional working capital for EPC business. They are self funding or accreting.
Speaker #2: So the post investment of this 1,000 crores anything more would be required in next year for data center business?
Speaker #3: You see although Ankit have already described whether this data center has become a very magical picture today. Whether it will be 1,000 or or more we are still not able to predict because of the AI penetration but we are keeping our balance sheet healthy to meet any rewarding opportunity in this space.
Speaker #3: I will like Ankit to elaborate more on it.
Speaker #2: Yeah so addressing the capex requirement for data centers see today when we started this quarter at that time we were not even expecting such kind of opportunities on a table where we are talking about such large capacity and deployments.
Speaker #2: And at that time the capital investment program was quite different. But today with the kind of opportunities that are in front of us in discussion and at the maturity stages that they are it is increasingly becoming very difficult to pinpoint the capital requirement and deployment.
Speaker #2: Really depending on what opportunity we are able to close how things will mature specifically for us. But keeping fingers crossed I think the amount of capital will continuously be required so that we are able to cater to these demands.
Speaker #3: Yeah Ankit continue. If Ankit you are over let me add whether this all is happening because of AI and deployment of VCU or TPUs are highly energy intensive and very very capital intensive for the deployer.
Speaker #3: So these infrastructure requirements are also very different to accommodate them. So that makes a difference. Whenever anybody will occupy this the capacity occupation will have be anywhere from 25 to 100 megawatt.
Speaker #3: So we have to build for it in 9 to 12 months. Without say. So it is no more a kind of a historic growth business.
Speaker #3: It is very transformative business as of today. Because of the AI penetration now. So at the moment we are we are at a very influx position in this sector.
Speaker #3: Very primary placed. And expecting very good results out of Chennai and Noida. In next maybe this quarter in Q2 itself but definitely not later than Q3.
Speaker #3: We'll be able to share good news with all of you.
Speaker #2: How do Ankit mentioned that the investment in total.
Speaker #4: Sorry to interrupt Viber sir. Maybe request that you return to question Q for follow up. Thank you sir. The next question is from the line of Parth Thakkar from JM Financial.
Speaker #4: Please proceed with your question.
Speaker #2: Thank you for the opportunity.
Speaker #3: Cash and current investments as of June 26.
Speaker #2: Yeah.
Speaker #4: Sorry to interrupt Parth sir. Can you speak little louder?
Speaker #2: What would be our cash and current investments of June 26?
Speaker #3: It in June 26 you can take it about in total about 1,250 crs.
Speaker #2: Okay. And what would be our investment in data center as of March 26?
Speaker #3: Ankit just said about 650 crs.
Speaker #2: Okay. Can you provide update on smart meter projects and as well projects?
Speaker #3: I just now yeah why not. I just now gave you that out of total of 232.2.25 million meters we have already deployed by now 18 and a half lakh meters.
Speaker #3: Leaving only 4 lakh more to be deployed as of today. As of March we had done 15 lakh. And 7 and a half lakh were pending.
Speaker #3: So that is the present status. This will be all completely deployed by December. So with 100 percent saturation has happened in thought project. And the rest of the projects are leaving from 60 to 80 percent at Ranchi, Tripura or Kashmir.
Speaker #3: Does that answer your question? Thakkar?
Speaker #2: Yes sir. Broadly. What would be our ONM part in this? Out of the backlog of 15 60 crores as of March 26. What would be our is there any ONM part in this?
Speaker #3: Yeah we continue to ONM. Carry out ONM of the meters and which is very little involvement. But they are all software based remotely run and controlled.
Speaker #3: But more important is to meet the SLA obligation. System level availability. Based on which our revenues are ensured as a part of the contracted agreement.
Speaker #3: Which we are generally able to meet and and it also has a upside now on services. By inducting AI. By inducting lot more services.
Speaker #3: Demanded by MISCOMS. So it's a interesting place to be in.
Speaker #2: Okay. And sir my last question was.
Speaker #4: Sorry to interrupt Parth sir. Maybe request that you return to question Q for follow up. Thank you sir. The next question is from the line of Nihar Shah from Ikigai Asset Manager.
Speaker #4: Please proceed with your question.
Speaker #2: Yeah hi sir. Thanks for the opportunity. And you know asking to see the comments that we've made on data center side especially on demand coming back to Chennai in a meaningful way.
Speaker #2: I think my first question is to Ankit. You know you mentioned about increasing capacity within the Chennai data center without investing much capex. Can you just talk about you know how much is the capacity now and if if the same thing can be done for modification of designs across your Noida and Kolkata data center as and when they come up?
Speaker #3: Yeah so let me break this down. So basically when we designed the data center in Chennai it was designed at a certain kilowatt per rack capacity which was around 10 kilowatt.
Speaker #3: The moment we start talking about GPUs which serve AI requirements the capacity required per rack increases from let's say 10 kilowatt to anything above 30 70 or even 100 150 kilowatts.
Speaker #3: So when the rack density increases you are able to you know cater to more capacity within a smaller footprint. And and that helps you increase the total serviceable load.
Speaker #3: And today conservatively I would believe we should be able to accommodate instead of 24 megawatt which was initially planned for Chennai we should be able to accommodate almost around 35 to 40 megawatt over there.
Speaker #3: And that's what has become interesting in our conversation with possible end users.
Speaker #2: Okay.
Speaker #3: It's the same case. You know we never designed data centers for such high rack densities. But tomorrow if demand comes in for such requirements which is possibly going to come in because that is where the next entire deployment lies.
Speaker #3: I don't think we have a single opportunity which is non AI. So even for Noida and Calcutta I'm expecting that similar increase in capacity will be visible without undertaking much capex.
Speaker #2: Got it. Got it. And Ankit you mentioned the comment about offering GPU as a service in the Noida facility. Just wanted to get your thoughts you know when we're thinking of moving to about 250 megawatt over the next three to four years.
Speaker #2: GPU as a service adds a significantly higher capex level on top of that right. So how are we thinking of capital allocation here over the next three to four years to manage both 250 megawatt scale and then also offer GPU allocations?
Speaker #3: So we don't yeah Ankit you can yeah so so we are not going ahead and building GPU as a service in the format which we are seeing other operators do.
Speaker #3: We are only building that capacity of GPUs where we have a committed demand from a specific customer. And where the counterparties are very very strong.
Speaker #3: And it is at a very very nascent state. So we are not going ahead and deploying billion dollars of GPU or multi billion dollars of GPU.
Speaker #3: That is not the plan. We are doing it at a very measured level at a very measured scale. Where the counterparty requirements are very well known.
Speaker #3: They are small to medium size. And and the counterparty risk is negligible. So so it's just the start. I wouldn't I wouldn't put my eggs in that basket today.
Speaker #3: No we are not buying BCUs. Let me make it clear. To my colleagues we are only providing infrastructure to house BCU owned by some third party.
Speaker #3: So our role will always be limited to infrastructure to house CPU or GPU.
Speaker #2: Great. Great. Understood sir. And you know best of luck for for the data center business scale up. And hope to see one or two hyperscale announcements companies.
Speaker #2: Thank you.
Speaker #4: Thank you sir. The next question is from the line of Ravi Naredi from Naredi Investments. Please proceed with your question.
Speaker #5: Thank you to give me opportunity. Respected Gupta sir I knew and company very well since last eight year as I am shareholder of this company.
Speaker #5: Why you do not give investor presentation and clear all details about order booking and data center details. So everyone is asking in the concourse if you give in investor presentation so many questions answer automatically comes and what is 1500 crore hidden assets you are talking please clarify this.
Speaker #3: No there is a firstly your suggestion is well taken. And Shivani please note from next call onwards we must come out with a investor presentation.
Speaker #3: Which is of course done post call. And parked on our website. But in future we try to do in advance. Thank you.
Speaker #5: Okay thank you. Thank you.
Speaker #3: Now coming to part two you see the unbuilt assets in our pleasant day industry as accounting is called contractor assets. In our case those contracts assets are nothing which are unbuilt but largely in the nature of capital work in progress.
Speaker #3: Like smart meters. Like all our own PVCV or PVCV projects developed in partnership or joint jointly within grid. So those are the capex carried out in those opportunities.
Speaker #3: Which is lying unbuilt unmonetized. That's what I was talking about. So during this year we will be monetizing two transmission assets to increase at Ishan Nagar and Dhule.
Speaker #3: In Q2 Ishan Nagar will happen and Q3 Dhule will happen. Whereas smart meter one we are now eligible to monetize. That is in lot.
Speaker #3: And the rest of the three may be available next year. So progressively those completed facilities are available to you. To monetize. As we did earlier in our power generating assets or in our transmission assets.
Speaker #3: Build jointly with Kalpatru.
Speaker #5: Okay. Sir Ankit can you I ask you second question. What is our top line in the June quarter of data center of Chennai or other?
Speaker #4: Ankit sir?
Speaker #3: Yeah.
Speaker #4: Yes sir.
Speaker #3: Yeah. Can I ask?
Speaker #5: Yes.
Speaker #3: Yeah. We are not just reporting the.
Speaker #5: Yeah go ahead.
Speaker #3: Just asking what is the top line and bottom line of this data center. Roughly. So we are actually not reporting the quarterly revenues from data center or the bottom line.
Speaker #3: But because it is not very significant today. Maybe towards the second half of the year we will start reporting them on the call.
Speaker #5: Definitely. Okay Ankit. Thank you very much.
Speaker #4: Thank you sir. The next question is from the line of Vishaka Jen from Veritas Research and Advisors. Please proceed with your question.
Speaker #6: Thank you team for the opportunity. So I wanted to know that the order book of 10,800 crore could you please give us some highlight on the realization of the same.
Speaker #3: What do you mean by realization ma'am? I could not get you.
Speaker #6: So like and how much time period do you plan to generate the revenue from that order book?
Speaker #3: Generally customer gives us two to two and a half years. But the zero date starts from the date of handing over all the land parcel.
Speaker #3: Which is often delayed by another six to nine months. You can say. So you at best can take two to three years.
Speaker #6: Okay. Okay. And also any any highlight on the receivables that was due and you know not yet reflected.
Speaker #3: Ma'am generally this sector now our dues are no more a challenge. Because everybody wants his project to be completed at the earliest. And so although in a given date or month you may see some number as a accounting practice.
Speaker #3: But by and large if you see the balance sheet and working capital efficiency you will see that they are self funded. And we are not providing any more working capital to take care of the growth in the revenue of these EPC business.
Speaker #6: Okay. All right. Thank you. Thank you so much.
Speaker #4: Thank you ma'am. The next question is from the line of Arshit Agarwal from Step Trade Capital. Please proceed with your question. Mr. Arshit your line has been unmuted.
Speaker #4: Please proceed with your question.
Speaker #7: Yes. Hello. Am I audio? Yes. Because my question is so you are planning around 1000 crore of data center capex in FY27. While guiding only 40 to 50 crore of revenue.
Speaker #7: So what portion of this 1000 is directly linked to signed customer commitment versus speculative capacity creation?
Speaker #3: Ankit so the firstly the capex as on date which is planned for data centers which is in Noida and Calcutta. They combined have a capital invest program of roughly about 500 to 600 crores in total.
Speaker #3: Second is that the capacity in Noida is being built in joint venture with Rail Tel. It's in strategic partnership with Rail Tel. So it's a revenue share model.
Speaker #3: Wherein the capacity which is being built today is about five megawatt to start with. And we are expecting very soon with the efforts of Rail Tel and Techno that the entire capacity will be absorbed by the center government ministries departments CPSUs or other government ecosystems.
Speaker #3: Given the fact that this is possibly the only government data center which is being built today and possibly the largest data center by a government entity.
Speaker #3: So Noida is least of the challenges per se given the relationship that we are building it in under. Calcutta is too early to talk about.
Speaker #3: It is still under early stages of construction where foundation and piling is happening. And it is not commissioning before FY28. So possibly we'll see traction and demand coming for Calcutta once we are little much more mature in that project.
Speaker #3: And that should be somewhere around mid next year.
Speaker #7: Okay. Okay sir. Thank you.
Speaker #8: In balance 400 crore.
Speaker #4: Thank you sir.
Speaker #8: As in when the demand comes through. Because now that the customer queries are for a larger capacity. So that is the budget that we have kept in case we need to start the phase two of TNI.
Speaker #4: Thank you sir. The next question is from the line of Nidar Sarpoder from Incred Capital. Please proceed with your question.
Speaker #3: Hi. Good afternoon sir. So my question is to Mr. Ankit. First you mentioned some two megawatts of order for a global hyperscaler in Andhra.
Speaker #3: So is this a EPC contract that we are taking up for someone to build out a data center? And what kind of margins and revenue are we looking at if that's the case?
Speaker #3: Mostly it is not an EPC contract. It is where we are developing a data center for a particular customer. And it is on a as usual per kilowatt per month basis.
Speaker #3: Today I'm not in a position to talk about the revenue and profitability over there. As I mentioned that it is still under we've just signed the MOU with the customer.
Speaker #3: And we are under strict confidentiality today to talk any any more than what I had mentioned on the call. But we'll come back with more guidance towards the end of this financial year.
Speaker #3: Okay. Got it. My second question is regarding Chennai. You mentioned some number of contracts being floated in the market. Are this pertinent to us or are you speaking about the overall market traction that's happening in Chennai?
Speaker #3: And and follow up on this that are we looking to expand this capacity from five megawatts to further adding some further phases? Because from last what we spoke out of this five megawatt we had sold out around 500 kilowatts.
Speaker #3: And you mentioned that you were able to sell out more around 130 kilowatts if I'm not wrong. So some color on that. Yes you absolutely right.
Speaker #3: Firstly the opportunities which I spoke about are specific to us. It is not opportunities industry wide in or or market wide. But I cannot comment on whether those particular opportunities are being discussed by other operators or not.
Speaker #3: But those are specific to our pipeline. And and coming to the question on expansion of Chennai as we've mentioned that will be taken up against a particular customer demand or user requirement.
Speaker #3: And those will be planned as we proceed with the conversations with end users. So if there is a requirement for them to have capacity beyond the existing commission capacity we will surely go ahead and build up that capacity for that particular end user.
Speaker #4: All right sir. Happy to hear all good traction on these projects. And all the best for the future. Thank you sir. The next question is from the line of Aman Soni from Seven Alpha Investor.
Speaker #4: Please proceed with your question.
Speaker #5: Hello.
Speaker #4: Yes sir.
Speaker #5: Thanks for the opportunity. I have two questions. One is on the standalone business. I just want a clarification on in terms of EPS. Earlier we have guided for an EPS of 60 for this financial year.
Speaker #5: But looking at the numbers in the terms of the top line growth which is which is more likely to be 20 percent plus minus.
Speaker #5: And OPM margin which is similar to the last year. So I just wanted to understand from 47 EPS that we did last year how are we going to increase it to 60 in this particular year with these numbers.
Speaker #5: So that is my first question.
Speaker #3: You see we don't want to comment on EPS. But on growth yes. It will be no less than 25 percent as we have said.
Speaker #3: And last year EPS was 37 rupees? Yeah. So that is what we are saying. So it should be better. It should be more. I'm very sure.
Speaker #3: But it it may also be influenced by how much we are able to monetize. Out of the capital work in progress created or contract assets created.
Speaker #3: So all those are little variables whether you carry it for future or monetize in this very year. But we can definitely say that the top line and bottom line of the company will grow by 25 percent at least.
Speaker #5: Okay. Okay. And only data center good to hear that inquiries are coming to us. But I need to understand more in the terms of number.
Speaker #5: Like because we have been speaking about it for a while now. But it is it is ultimately so far impacting our consolidated EPS right.
Speaker #5: So I wanted to understand from the perspective of the future like how fast are we going to seeing the results is it in FY27 or is it in FY28.
Speaker #5: What what kind of targets in the terms of revenue do we have in the terms of EBITDA do we have. For FY27 and FY28 from our data center business.
Speaker #4: Can I ask?
Speaker #3: Yeah. Go ahead Shiva.
Speaker #4: Yeah. Hi. So Aman to answer your question see you know that data center is an infrastructure asset. Even though circular of harmonized list for infrastructure device is that infrastructure project.
Speaker #4: So as such the payback period is longer. So to to compare it only with the EPS I think would not be the right approach.
Speaker #4: The better perspective on this would be to look at the asset value. That we are created which is in terms of the capacity that we are building across our assets.
Speaker #4: So while EPS may take some time because you know that these are the assets which need to be depreciated. Which brings down my EPS.
Speaker #4: So on the value and nobody is valuing data center companies on the basis of fee multiples. It's driven mostly by your capacity or the EBITDA multiple.
Speaker #5: That is what I am asking about. That is where I am asking about EBITDA from this particular segment. Like what kind of revenue numbers and what kind of EBITDA people are targeting in FY27, FY28.
Speaker #5: I I think you must have that number.
Speaker #4: Are you talking about people or us?
Speaker #5: I'm speaking about techno electric data center vertical.
Speaker #4: Yeah. So on the data centers this will take some time I think by next year. So start assuming that the conversations that we are right now having will rectify into into the customers moving in into our data center.
Speaker #4: I think by next by next year it will start showing the impact on the on the revenue on the on the revenue EBITDA maybe can answer.
Speaker #4: But I would say that on on the valuation side you need to do an SOTP wherein you break in the valuation of our businesses.
Speaker #5: Cross valuation then. Sorry to interrupt. I'm I'm trying to understand.
Speaker #3: Revenue on EBITDA.
Speaker #5: Yeah.
Speaker #3: See it is as as Shivani was trying to mention that it is still something which is under development. And it will take some time for us to come out with guidance.
Speaker #3: As I'd mentioned in my opening remark as well that today it is too early for us to start guiding on the revenue and EBITDA.
Speaker #3: But we'll have better numbers and some guidance during the second half of the year. As of today we have pipelines. We have visible closures in the near future.
Speaker #3: And they will start dictating what the capex and the revenue and EBITDA starts looking. But it is little too early for us to start guiding the market on revenue and EBITDA expected out of these.
Speaker #5: Okay. Understood. But I think last quarter you said 40 crores of this year. Maybe I thought because of increased inquiries we might end up doing more than this.
Speaker #3: I think that that guidance is that that guidance remains.
Speaker #5: Okay. Understood. Understood. Thank you. Thank you.
Speaker #4: Thank you sir. Ladies and gentlemen in the interest of time that was the last question for today. I would now like to hand the conference over to management for closing comments.
Speaker #3: Yeah. Let me bring all this together. This quarter our revenue grew by 25 percent and and we won about 2200 crore of new work by now.
Speaker #3: Our first meeting project began paying after 100 percent completion and go-live. The data center remains strong in implementation. As well and drying customer and drying used customer interest.
Speaker #3: India is entering a significant phase of investment in power and digital infrastructure and techno electric is well positioned to be one of the lead participant in both of them.
Speaker #3: In one sentence the power infrastructure that sports India's growth. Engine 2 is building the digital infrastructure for its next phase. We have built India's power backbone for over 40 years.
Speaker #3: And we are have been first movers in many opportunities in this space. Maybe renewable power. Maybe PVCB. Maybe triple T concessions. Apart from doing EPC to any complexity and voltage levels.
Speaker #3: We are and and built on a used execution discipline. And we'll continue to bring the same for our long term approach to our digital infrastructure and business also.
Speaker #3: Additionally I will again like to remind my investors that digital business is long term. Unlike EPC. Which you are building for others who are owning the assets.
Speaker #3: Here you have to invest create a asset. Bring a customer. He also takes about six months to deploy his equipment. Before it becomes a revenue accretive.
Speaker #3: So we have to have patience. But it is a very very exciting and magical business to be. And the rewards grows with every passing year.
Speaker #3: In this business. We have to our shareholders thank you. For your continued confidence. We remain focused on building a high quality order book. Maintaining a strong balance sheet.
Speaker #3: And converting our investments into sustainable profitable growth. And I once again thank you. For joining us. For your and for your continued support to techno electric.
Speaker #3: Thank you very much. Have a good day.
Speaker #4: Thank you sir.
Speaker #5: Thank you.
Speaker #4: I will now hand the conference over to Vidhit Trivedi from Asian Markets. Over to you sir.
Speaker #5: Thank you. On behalf of Asian Market Securities we thank everyone for joining this call. And a special thanks to Shri PP Guptaji and Mr. Ankit for providing us insights about the company's business and financial performance.
Speaker #5: With that we conclude the call. Thank you and have a good day.
Speaker #4: Thank you sir. On behalf of Asian Market Securities Private Limited that concludes this conference call. Thank you all for joining us. And you may now disconnect your lines.
