Techno Electric & Engineering Company is a power transmission EPC and asset-owning firm that is pivoting from a contract-based engineering business to an operator of high-margin data centers. Today it earns the bulk of its revenue from EPC contracts in transmission and distribution, smart metering concessions, and thermal EPC, with an EBITDA margin of around 14% on that segment. The company also runs a small wind power asset and has built a growing data center portfolio, where bare rental EBITDA margins are guided at 80% and including services and power costs at 50-60%. Its unexecuted order book stands at INR 10,350 crore plus L1 of INR 780 crore, providing 2.7 times FY26 revenue visibility, and it holds a market-leading position in high-end transmission solutions such as 765kV substations and STATCOM. The margin structure is bifurcated: the legacy EPC business is good but not exceptional, while the data center business, once operational, will be far more profitable and will progressively reweight the mix.
The economics of the EPC side persist because of qualification cycles for high-voltage equipment and a track record of timely execution that keeps margins above peers. The data center side is built on a different barrier: the time and capital required to replicate a high-density, AI-ready facility. Chennai Phase-1 (5 MW) is designed specifically for AI workloads, and the company has already secured an order from a leading media production studio. The Noida hyperscale data center (16 MW) is under construction with partial commissioning targeted for H2 FY26, and a 16 MW facility in Kolkata is slated for first phase commissioning between mid and late 2027. The RailTel partnership for edge data centers adds a captive pipeline, with Gurgaon complete and Mumbai expected operational by March 2026. These are assets that take years to build and longer to replicate, giving early movers a durable advantage. The smart meter business, however, is a commodity-like concession with DISCOM counterparty risk, so the company is deliberately selective there.
The inflection is the commissioning cycle that runs from late FY26 through FY27. By the end of FY26, Chennai Phase-1 should be fully deployed, Mumbai edge data center operational, and Noida partially live. The company expects to spend INR 85-100 crore this financial year on the Noida and Kolkata projects, while funding the capex from its INR 2,250 crore cash surplus without taking on debt. Management has guided to 40% revenue growth for the next two years, with FY26 revenue of INR 3,500 crore and FY27 of around INR 4,375 crore, implying a 25% growth rate. The data center vertical is expected to contribute about INR 125 crore of top line in FY27, at 55-60% EBITDA. By mid-2027, the company will have over 20 MW of operational data center capacity across Chennai, Noida, and Mumbai, with Kolkata still ramping, and the smart meter order book of 2.5 million meters will be fully deployed by September 2026. The consolidated EBITDA margin should move from around 14% toward 18-20% as the high-margin data center revenue becomes a meaningful part of the mix.
Management’s track record is mixed. On the May-25 call, they guided FY26 revenue of INR 3,500 crore and EPS of INR 50, but H1 FY26 delivered only INR 1,352 crore revenue and INR 18.5 continuing EPS, a shortfall versus the run-rate needed. They have, however, kept the order book intact at around INR 10,000 crore and commissioned Chennai Phase-1 and the Gurgaon edge data center on the announced timelines, while the Mumbai edge has slipped from December 2025 to March 2026. They have also maintained the FY27 EPS guidance of INR 75, excluding any data center contribution, and reiterated a 40% revenue growth trajectory for two years. Capital allocation is conservative: they are funding data center construction from internal cash, staying debt-free, and evaluating a strategic equity partner for the data center platform only after it matures for 18-24 months, which indicates they expect the asset value to appreciate before diluting.
The concrete earnings path is clear: FY26 EPS of INR 50 and FY27 EPS of INR 75, excluding data center profits, with an additional INR 125 crore of data center revenue in FY27 at 55-60% EBITDA. For this to hold, H2 FY26 must see a sharp acceleration in EPC execution, with monthly revenue run-rate rising from INR 200 crore to INR 300 crore, and the Mumbai and Noida data centers must hit their revised commissioning dates. The single most important watchpoint is the conversion of Chennai’s 5 MW capacity into paying customers and the timely completion of Noida and Mumbai, because any further slippage would push data center revenue beyond FY27 and defer the margin lift. The tension between weak H1 financials and strong order book is operational, not structural: the company is in a transition year where EPC revenue is back-ended and data center revenue has not yet begun. If the timelines hold, the 18-24 month picture is a larger, more profitable EPC player with a growing asset base that will reweight earnings toward high-margin recurring income, and a potential strategic partner valuing that platform on a completely different multiple.
companyname: Techno Electric & Engineering Company Limited ticker: TECHNOE sector: Power infrastructure and digital infrastructure Techno Electric & Engineering Company Limited (TEECL) is a Kolkata-headquartered power infrastructure company with four decades of experience. It operates three distinct businesses: EPC contracting, asset deployment through long-term concessions, and asset ownership of data centres. The EPC business contributed roughly 99% of revenue in FY25 (annual report); the oth...
Read the full report →capex, margin expansion, order book surge, new product segment
EPS guidance: ₹50 for FY26; ₹75 for FY27
mixed
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