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T&D pipeline robust; eye on Data Center client on-boarding

Techno Electric (TECHNOE), quarterly performance was above JMFe. Revenue came in at INR 8.1bn (up 68.2% YoY). Order book stands healthy at c.INR 110bn up 78.3% YoY (4.6x FY26 EPC revenue) and is L1 in orders worth INR 8bn. Order inflows came in strong at INR 41.5bn vs management guidance of INR 35bn. Order pipeline for next couple of years stands strong from T&D space and TECHNOE is confident to bag orders worth INR 25-30bn/year for next couple of years in this space. Chennai Data Center phase-1 is almost completed and company expects on-boarding of customer from 2QFY26. Management guided for revenue of INR 35bn for FY26 and INR 45bn for FY27. Cash and cash equivalent stand at INR 25bn as on FY25. We remain positive on stock in long run given strong order book, pipeline, execution of Edge Data Center order and expected revenue pickup from Chennai Data Center. Chennai Data Center phase-1 client on boarding remains key to watch.

* Strong revenue growth: Std. Revenue grew 68.2% YoY to INR 8.1bn, which is 4.3% above JMFe of INR 7.8bn, driven by strong opening order book and project execution. EBITDA at INR 1bn (up 74.4% YoY) in line with JMFe of INR 1.1bn), EBITDA margins expanded 50bps YoY to 12.6% (JMFe 13.6%) due to lower other expenses. Other income grew 126% to INR 698mn. PAT grew 91.3% YoY to INR 1.3bn, which was 13.6% above JMFe of INR 1.2bn.

* Order book of INR 110bn as on Mar’25: Order inflows in 4QFY25 came in at INR 20bn. FY25 order inflow came in at INR 41.5bn higher than management guidance of INR 35bn. Order book stands healthy at INR 110bn, Including T&D orders worth INR 75bn, providing strong revenue visibility going forward. L1 in orders worth INR 8bn.

* Data Center update: Construction of Chennai Data center phase –I is completed and is currently in testing phase. Company targets to start leasing out the racks from 2QFY26. Company is in interaction with few customers including one of the global major cloud player for leasing along with domestic client in BFSI, PSU customers. Railtel edge Data Center order- Execution of 1st Edge DC at Gurgaon of 200KV is completed. While Mumbai edge data center is expected to be completed by Nov’25.

* Maintain Buy with TP of INR 1,655: We believe TEEC strong execution track record, technical capabilities, presence across power value chain and diversified sector, augurs well for company to capitalise on upcoming opportunity in T&D, smart metering and Data Center. Maintain Buy rating on stock with revised SoTP of INR 1,655 (INR 1,440 earlier) valuing EPC business at 25x FY27E (24x FY27E earlier), factoring in strong order backlog & pipeline, and value Data Center on 1.2x P/BV (vs 1x P/BV earlier) considering completion of data center phase-I capex and expected client on-boarding in near future Key Risk: Slowdown in ordering activity in T&D, delay in execution smart metering order and arising BS risk due to asset heavy model (smart meters and data center).

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