But wasn’t that not too big a component of their earnings? I don’t remember how much exactly.
I am personally quite suprised that it continues to fall. Does the market know something we don’t? Else I don’t see a reason to correct so much!
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techno launched.pdf (576.9 KB)
techno electric launched for hyperscale data centre
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Good to have a separate entity on data centre. But on ground, we need to understand when the Chennai data centre will start business. it has been delayed multiple times. On railtel DCs also, there is no clarity - they keep talking about at very high level.
Having said that TECHNOE core business has good probability of doing well over the next couple of years. Need to watch cash flow very closely.
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According to the article-does 100billion$ is new investments in datat centre or 100-60=40billion$ in 2027?
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Good cfo,seems a one off earnings 
what is included in Other Assets? That seems to have gone up significantly, while Other financial liabilities have also significantly gone up.
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RailTel Corporation of India Ltd. has awarded a significant domestic contract to M/s Techno Electric & Engineering Co. Ltd. for establishing a 10MW Data Centre in phases at Noida. The selection was made through an open tender process, with Techno Electric appointed as the Managed Service Data Centre Partner.
Key Highlights:
- The contract is based on a revenue sharing model with RailTel receiving a fixed percentage share.
- The term of the contract is 30 years, including implementation time, extendable with mutual consent.
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How Will FGD Relaxation Impact the EPC Order Book of Techno Electric?
The government’s recent decision to relax the 2015 mandate on compulsory installation of flue-gas desulphurisation (FGD) units in thermal power plants could have a serious bearing on EPC players like Techno Electric. Around 79% of thermal capacity now stands exempt from FGD rules. So what does this mean for Techno’s future?
Let’s unpack this.
Is the ₹98,000 crore FGD opportunity shrinking fast?
Techno has already executed FGD projects worth nearly ₹1900 crore and was aiming for an annual FGD order inflow of ₹1000 crore. With only plants near million-plus cities, in polluted zones, or using imported coal now needing FGD systems, the remaining pipeline could shrink sharply.
What happens to the ₹319 crore Bokaro A project and others in the tendering phase? Will we start seeing order cancellations or indefinite delays?
What does this mean for margins and topline growth?
FGD jobs tend to be margin-accretive and form a key part of Techno’s growth narrative. If this segment dries up, how quickly can the company reallocate resources and bid more aggressively in other verticals like transmission, data centers, or renewables? Can the EBITDA profile be sustained?
Is there a second-order benefit here?
The cost savings from not implementing FGDs may free up capital for state utilities and private players. Will this eventually boost spending on other infra segments where Techno already has competence? Could we see an uptick in orders for T&D infrastructure instead?
Could there be a pivot to lower-cost pollution control solutions like ESPs?
Electrostatic precipitators cost just a fraction of FGD systems and are gaining policy traction. Does Techno have capability here? Is management already thinking of this shift?
How much of the FGD risk is priced into the stock already?
Bottom line
The FGD relaxation is clearly a setback, but whether it’s a bump in the road or a structural drag depends on how Techno responds. Order visibility, pivot speed, and capital allocation strategy will be critical to track over the next few quarters.
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Q1 FY26
Performance:
It is Q4 heavy business so QoQ it is not comparable.
Concall Notes:
- Order Book (as of June 2025): ₹10,408 crores.
- The company is L1 in orders worth ₹720 crores.
- Order intake for FY26 is expected to be around ₹3,500 crores, providing visibility for growth.
- The data center ecosystem is undergoing a paradigm shift driven by AI, cloud, and 5G, creating strong demand.
- About ₹500 crores has been invested in the Chennai data center project so far.
- In data centers, the strategy is to establish operations in Chennai and Gurgaon and then expand to other locations like Mumbai, Noida, and Kolkata.
- The data center business is now operational, marking a shift from a purely development phase to revenue generation.
- The company is exploring bringing in a strategic investor for the data center business. Continuously in touch with many global firms as well as Indian companies.
- The useful life of a data center is estimated to be not more than 10 years due to the rapid evolution of technology.
- EBITDA for bare data center rentals is 80%, but when services and power costs are included, the blended EBITDA is expected to be between 50% and 60%. FY26 revenue from data centres will be negligible at ₹25+ crores. It will become more significant in FY27.
- The power sector still faces challenges from a complex regulatory environment and the lack of GST inclusion.
- Working capital can be volatile; customer funds were tight in June, leading to a temporary increase in receivables, which normalized in July.
- The current investment value stands at ₹2,250 crores.
- The company has deployed about ₹1,250 crores in the last 2 years as capex in its subsidiaries for data centers, AMI, and TBCB projects.
- The company is not planning to raise debt for smart meter projects and will rely on internal accruals.
- The company is focusing on deploying value-accretive assets like data centers, AMI, and TBCB projects.
- The company deploys about 80,000 to 1 lakh smart meters per month.
- The company maintains a conservative stance on smart meter business, aiming for a presence of no more than 5% in the marketplace due to counterparty risk.
- Counterparty risk in the smart meter business remains high due to the financial health of DISCOMs and slow pace of reforms.
- The company’s EPC business model is adapting to compressed project schedules, which improves resource productivity and working capital efficiency.
- On margins of EPC Business:
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14% plus/minus will be the benchmark, as I have always guided and we have achieved consistently. The further improvements will happen only by our data center business now happening and somewhat out of the AMI business, which are the asset-based businesses of the company. So club together, you may find some improvement year-on-year.
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- On EPC opportunities:
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80 gigawatt of additional thermal capacity is planned by 2030 to meet the peak demand of 400 gigawatt, focus on ultra-supercritical and supercritical plant technology, which means lesser coal consumption and also emission thereby. The EPC scope as a balance of plant will continue to be there. We’ll have a scope to deliver at least the grid connectivity part as well as the electrical elements for auxiliary systems. The estimated EPC opportunity is about INR80,000 to INR1 lakh crores over 7 years, out of which we intend to make around INR500 crores per year.
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- On FGD Slowdown: Management says FGD was never a primary focus. Existing orders are safe and will be completed. The company’s capabilities will be redeployed to balance of plant works for new thermal projects. The policy around the FGD segment has shifted, with the government classifying requirements based on location and population density, leading to a slowdown in the overall market.
- Key issue with discoms remains delayed payments, which has stretched the company’s working capital cycle. They mentioned that receivables have gone up as several state discoms are under financial stress, despite government schemes like RDSS aiming to improve efficiency. Execution of these reforms at the state level has been slow, keeping liquidity tight. While order inflows continue to be healthy, particularly from green energy corridor and transmission projects, the elongated collection cycle is affecting cash flow and margins. The company said it is being cautious by preferring central utilities such as PGCIL, where payments are timely, and being selective in bidding for state discom projects with a history of delays.
Guidance:
- FY26 Revenue Target: ₹3,500 crores. EPS: No less than ₹50.
- FY27 Revenue Target: ₹4,500 crores. EPS: No less than ₹75.
- [Revised] Data center revenue target for FY26 is reduced from ₹100 crores to ₹25+ crores.
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Maybe it will be more visible from INR100 crores to INR200 crores next year. And this year, we are in the process of building up of the capacities like Gurgaon, Bombay, Chennai. So these 3 facilities will be ready for deployment. So I will say conservatively INR25 crores, but maybe more.
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Shareholding:
Disclaimer: Invested
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Good read on the FGD landscape in India
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Do they provide revenue breakup between EPC, smart meters, FGD & data centres?
They do not provide revenue breakup in my understanding. But you can derive the numbers from the order book breakup.
Transmission: 7495 Cr
Distribution: 2309 Cr
Smart meters (within distribution): 2170 Cr
FGD: 1081 Cr
Data centres: 65 Cr
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But the proportion seems to be changing every year. How come data centre orders were 422 Crs in FY23 end but only 62 Crs now. Did they execute any orders?
I am not sure about the source of 422 crores of data center orders which you are referring to.
They have given a long term guidance
A vision to build an interconnected network of hyperscale and edge data centers across India, with a planned investment of $1 billion over five years. The goal is to achieve a cumulative data center capacity of 250 MW by 2030.
This was the last data center order win by them:
Snapshot of the current orderbook:
This is their order book over the years-
Data centre orders have reduced from 422 Crs in FY23 to 65 Crs in FY25.
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Techno’s data centers are not typical EPC projects but rather asset-based businesses. This means that instead of receiving a contract from a client to build a data center, Techno is setting up and will operate these data centers on its own balance sheet. Therefore, the value of the work done on these projects is not classified as an “order book” in the same way as their EPC contracts.
In the 2023 annual report, the ₹422 crore data center order book mentioned likely refers to the company’s investment in the Chennai hyperscale data center.
Therefore the decline can be attributed to the company classifying the capital expenditure as work-in-progress and capitalizing it as the asset gets closer to commissioning, rather than it being a contract that gets executed as revenue. As the projects progress, the value of the order book decreases because the work has been done and the capital has been deployed. This is just my understanding and I might be completely wrong.
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