Techno electric engg ltd

Stock Opportunities
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buyback announced at 410 per share. Buyback value is 100+cr. Promoters are not participating.

Also, as per other news on Moneycontrol, MF’s have lapped up Techno shares leading to holding 536.6 lakh shares in November. vs.203.6 lakh shares in October. How can they buy so many shares off market since the shares was listed on the exchange in December?

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@devarshi84 - i have been holding techno electric from before de-listing, however i havent received any notice for buyback, from when is it supposed to commence ?

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Amey,

The record date for buyback is 3-Jan-2019. Below is the notification from BSE:

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thanks vivek, i wonder why i havent received any notice for share buyback

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Only shareholders as on record date gets intimation for buyback. This will happen after record date is gone.

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Concall Summary for latest quarter

Result Link: http://www.bseindia.com/xml-data/corpfiling/AttachHis/44889038-cba9-4245-8f0a-776bc1b2f260.pdf

Year of consolidation, focus is on collection and increasing balance sheet strength

Amalgamation completed effective 1 April 2017; Enhances balance sheet size and qualification criteria + risk appetite increased

Revenue gets booked net of GST hence not comparable as such

EBIDTA impacted due to wind segment underperformance; Flat on EPC segment

Operating margin for EPC: 18.66%

Interest payment is minimal; most debt repaid last year (total debt 55 cr.)

Cash and cash equivalent: 500+ Cr

New orders 310 crores during quarter; Orderbook 1800 cr

Pending transmission orders now finalized; Total scope 25000 cr (clarity on 12,000 cr); RFP closes on 18 Feb for this

1000 cr. Transmission bids over; Frontrunner and have market share of above 50%+ for above scope; Hopeful of winning atleast 1-2 out of 9 projects (TBCB - 1000 cr Each)

Tight deadline of 15 months for above projects vs. 3-4 years generally; Might have strict penalty if not completed

Kenya and Afghanistan business on track; will complete by March 2019

Qualified by NTPC on FGD business; hopeful of seeing breakthrough in atleast 1 project

Regulatory paralaysis at all-time low; will focus on our core strength

Awaiting SEBI approval on buyback; Promoter not participating in the buyback

Guidance: 25%+ growth expected next year; This year looks flat

More clarity on orderbook will emerge only after election only

Kenya order in final leg with AXIM bank now; Should get agreement in few months

Afghanistan: existing order is getting doubled; 40 million USD order now; Agreement will be signed soon

5 packages of 2000 MW each; Might bid for 3rd one (did not participate for 2nd)

Seems 2021 will be peak year from current guidance

Considering exits to assets which company is holding

Operating margin guidance around 15% (continue to maintain that)

EPC asset-light; Did not add manpower this year; current 450, should see growth to 650 in next 2 years; No capex plans for EPC business

Might be 250-300 cr capex on TBCB front if required

Considering tie-up with prospective Japanese partners; In talking stage at the moment

Orderbook breakup: Generation 65 (NTPC); Transmission: 1400; Distribution 350

Kohima project at initial stage; No revenue booked yet; Project on track for May 2020 deadline; Expecting 250 cr revenue from project

My view on above:

  • Broadly looks like one more consolidation year with tepid order flow. Overall orders at all time low.
  • Winning of new orders from pipeline looks to be immediate trigger next year.
  • Company is following conservative approach with good cash on books and prudently doing buyback which is good sign of capital allocation; Being almost debt free gives comfort to ride through tough times.
  • It looks like more orders might open after ~6-12 months of election.
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127

Any news on Buyback ?

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Just received buyback tenders in email. Buyback price 410. Company buying back 9.10% of the total share capital. Promoters are not participating.

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Is it upto Rs. 410 or fixed at Rs. 410? and guessing its done through the broker (eg. Zerodha) therefore STT is paid and normal tax STCG/LTCG tax implications.

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Any one enlighten me on buyback allocation rule for General category ?
It is stated for retail( max Rs.2 lacks) investor they must allocate 15% of the capital on proportionate basis, but what about general category? It seems general category has few retail investors excluding promoters and Institutional Investors. Is it not wrong to merge large investors and retail ones in one rule ?

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It is market value of 2 lakh based on price on record date. So large investors will get automatically removed, only retail will remain.

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Thank you for the reply but my point is if somehow small investor exceeds Rs. 2 lacks limit he will be put in general category and they will get proportionate to large fund managers etc

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Very good results from the company. It has become completely debt free now.

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Excellent numbers and good to know that Co. has become debt free … Company recently did buy back also… Good future lies ahead…

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thanks gaurav, which reasons make you feel that techno electric will see good future? i have been reading that capex is now over and we will see sales growth in the coming year, however major growth hasnt been seen yet

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its been 1 year since becoming debt free - Techno electric struggles to come back to pre-buyback levels

last month a lot of brokerage firms upgraded their ratings for Techno and still the abundant liquidity in the market fails to support Techno Electric

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While most of us were busy looking at cyclical stocks - Techno electric has quietly touched its 2018 levels of 320-340. It may not sustain these levels and languish backwards. But it certainly is now worth attention. While, the debtor turnaround days are worrisome at 240days i.e. 8months and Sales as well as NPAT are still below 2018 levels yet it seems the company has made significant progress in cost savings as well as debt reduction.

I have a question for some of the seasoned investors on the forum. Does this up move come from decent performance by Techno electric in last few quarters and an expectation to start seeing the benefits of CAPEX, or just a fluke?

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138

ICICI direct has come up with a SOTP based valuation and PT of 405 for TechnoElec.

Key drivers/ tailwinds :

  1. Expecting Rev, PAT to grow at CAGR of 30% and 20% in FY21-23E, resp.
  2. Foray into datacenter
  3. Ability to margins at 15% with order inflow of 2000+ Cr for FY22E

SOTP - EPC (256 at 16 PE, 85 for wind assets and trans, 64 for cash)

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It has been 12months since this post - we don’t see much change in Techno Electric. In fact it seems to sink with the buy back from open market at INR 325/- or lesser. Every now and then, we hear them saying on their concall that their capex has been completed and the results will start showing up, but we don’t see much earnings in subsequent results.

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I saw some post on twitter that data center work is on

Company started buying shares yesterday as per open market buyback, let us hope it gives a floor and results provide tailwind for stock to go up…

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