Techno Electric and Engineering hosted a conference call on Feb 15, 2023. In the conference call the company was represented by P. P. Gupta, MD. 

Key takeaways of the call

Un-executed order book as on date is Rs 5441 crore, an all time high.  Order intake in 9mFY24 was Rs 2738 crore.  Additionally the company is placed L1 for orders worth Rs 1700 crore.

L1 orders comprise orders from Power Grid, IndiGrid & Business One partnership, Adani Group, Tripura SEB, and also DVC on digitization of distribution network in their command area.

Quarterly execution (on standalone basis including those of captive orders execution) has ramped up to about Rs 400 crore per quarter from Rs 200-225 crore in FY23 and the company expects further ramp up in quarterly execution to about Rs 550-600 crore/quarter for Q4FY24 and FY25. The execution is expected to rise further to Rs 800 crore in FY26.

Expects a standalone topline of Rs 1750-1800 crore, which included RS 1600 crore from third parties contracts and Rs 200 crore from its own datacenter.  For FY25 and FY25 the company expects a topline of Rs 2500 crore and Rs 3000-3200 crore respectively.

High end transmission solution, where the company has core competency with 3 decade of experience has strongly come back and now the company expect this vertical to be about Rs 3000 crore business for the company every year. Additionally the company is to tap good opportunity in the space of smart meters in OPEC model wherein it want to absorb in-house risk of the project development and revenue stabilization. The third leg of growth opportunity is transmission and mid-assets on financial IRR basis.

FGD programme will be steady and expect that to continue over the next 10 years as with Government strongly enforcing it on new capacity. The FGD will also be enforced in existing power plants of CPSU and state entities.  But private power plants may like to defer the kind of CAPEX for next 2-3 years.  In FGD the company have already got business worth Rs. 40 Cr-50 Cr and which we will see execution now in the coming year and next year.    And expect to book business worth about Rs 500 crore in this segment year-on-year.

T&D - Sees business from both conventional energy as well as renewable energy as GOI is keen on bringing back conventional energy to the extent of 80-90 GW.  Expect TBCB bidding to happen to almost per 50 to 100 gigawatts now.  Overall expect a total business potential of Rs 40000 crore per year in transmission front and out of which station business (other than HVDC) can be around Rs 7000-8000 crore. Expect transmission business (of Rs 3000 crore) to ramp up or grow on YoY basis for the next 3-5 years.

Smart meeting - Almost about 100 million meters are under various stages of award. And around 88% of them may be taken under RDSS Scheme where Government has allocated 3 lakh crore to be spent over next five years. The company has already backed orders worth for 2 million meters and would like to build about two million meters per year over next five years, so that its share in the market is about 5% in this segment. Expecting orders for 2000 Cr year-on-year in the metering segment. 

L1 include transmission orders worth Rs 1100 crore and this is in addition to RS 1500 crore of transmission order it bagged in 9mFY24.

Executing already a smart meter order in the state of J&K for 2.5 lakh meters which is coming to a complete by the close of the Q4FY24.  In addition it have got another order to install about 7.25 lakh meters again in the state of J&K and also bagged order to install 5 lakh meters in the city of Indore and Indore discoms. It is also L1 for order to install 4 lakh meters in the state of Tripura. The company is participating in smart metering business in the state of Rajasthan and Jharkhand and expects that by the close of the year it will expect additional business of about a million meter more.

Data centre capacity in the country is currently at 700 MW and that is expected to grow to 2 GW by FY26 and to about 5GW by 2030.

Chennai data centre (IT load of 24 MW and 40MW of grid load) is expect to be ready  by no later than March/April 2024 or latest by Jun 2024. The all phases of the project will be completed by March 2025.

Confident of achieving a 250 megawatt capacity in data cenre by 2030. 

 Lot of interest from specialized partners to enter into JV for developing data centers in India and the company is likely to conclude the JV partner deal soon.

Capex for next 5-6 years for the company will be not less than Rs 20000-25000 crore [around Rs 10000 crore for 250 MW of data centre and Rs 10000 crore for developing 10 million meters in Capex model]  

Sustainable EBITDA margin will be 13-14%.

Finding good traction now in the Middle East, because every country in the Middle East is very strongly focused on renewable power, like India. 

Not decided on time of equity fund raising   and may complete this over a year, either as a preferential allotment or as a QIP.  And strongly looking on foreign enterprise, FIIs or FPIs.