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(Techno) reported a healthy quarterly performance with revenue of INR 8.4bn, above JMFe of INR 6.3bn. Renting out of the Chennai Data Centre (DC) has started with 0.5MW (6MW capacity)

Techno Electric (Techno) reported a healthy quarterly performance with revenue of INR 8.4bn, above JMFe of INR 6.3bn. Renting out of the Chennai Data Centre (DC) has started with 0.5MW (6MW capacity) already done and the remaining likely to be rented out in the next 6 months. Construction of phase-II expansion is targeted to commence in CY26. 1HFY26 sales was INR 13.5bn (up 48% YoY), c.40% of FY26E sales (1H accounts for 35-40% of full year sales). The management maintained its revenue guidance of INR 35bn (implying revenue of INR 21bn in 2HY26E, in line with our estimates) and EPS guidance of INR 50 for FY26. EBITDA margin is likely to be 13.5-14%, and order inflow is expected to be INR 30bn-35bn.

* Order book position healthy: Order book stands at INR 10bn as of end-2QFY26, up 2.4% YoY (3.5x TTM sales), providing revenue visibility over the next couple of years. The company is also L1 in projects worth INR 7.8bn, including INR 3bn from America and INR 4.5bn from PGCL. It has bagged orders worth INR 4bn in 3QFY26 till date, and factoring in the strong order pipeline largely in T&D, the management expects to bag order inflow worth INR 35bn in FY26

* Chennai Data Centre update: Chennai DC phase-I of 5.4MW (capex of INR 4.7bn) was inaugurated in Aug’25 and capacity of 0.5MW was rented out to the media and entertainment industry, a domestic cloud services provider and a few telecom players. The remaining capacity is likely to be rented out in the next 6 months Phase-II capex is expected to start in CY26 with capex of INR 2.3bn-2.5bn. The Chennai DC is designed for high-density computing, which is particularly relevant for AI deployments.

* Edge Data Centre:

1) Gurgaon DC has commenced commercial operation and c.50% of capacity has been consumed

2) Mumbai DC is expected to be commissioned by end of FY26 (earlier target was to complete it in Dec’25, but there was a delay in handover of land). Started construction of 16MW DC in Noida awarded by Railte

* Maintain BUY with TP of INR 1,600: We believe TEEC’s strong execution track record, technical capabilities, presence across the power value chain and diversification across sectors augurs well for the company to capitalise on upcoming opportunities in T&D, smart metering and data centre. Factoring in higher interest cost we cut our EPS estimate by 3.5%/2%/3% for FY26/27/28E. We roll forward to Sep’27E and maintain BUY rating on the stock with an SoTP of INR 1,600 (INR 1,660 earlier) valuing the EPC business at 23x Sep’27E (25x FY27E earlier), factoring in the strong order backlog and pipeline, and value the data centre on 1.2x P/BV considering completion of DC phase-I capex and pick-up in client on boarding in 2HFY26. Key Risk: Slowdown in ordering activity in T&D, delay in execution of smart metering order and arising BS risk due to asset heavy model (smart meters and DC).

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