Techno Electric order book and smart metering annuities underpin growth

Investment View and Valuation

Following Techno Electric & Engineering Company Ltd.’s Q1FY27 results announced on August 12, 2026, Ajcon Global Services Limited maintained its Buy rating. The broker retained its target valuation multiple of 30 times P/E and used revised FY27E EPS of Rs 41.17 to derive a target price of Rs 1,235.

Ajcon’s positive medium-term view is supported by transmission and distribution execution visibility, the conversion of smart-meter projects into annuity cash flows, a debt-free net-cash balance sheet and long-term data-centre optionality.

Q1FY27 Financial Performance

Standalone revenue from operations rose 25 per cent year on year to Rs 642 crore, supported by transmission EPC execution and AMI installations. Standalone EBITDA increased 13 per cent year on year to Rs 89 crore, although the EBITDA margin declined to 13.88 per cent from 15.38 per cent in Q1FY26 because of higher transformer, CRGO steel and other long-lead equipment costs.

Management said advance procurement, vendor relationships and other cost controls kept margins within its 13–14 per cent guidance range. Standalone PAT was Rs 96 crore versus Rs 98 crore in Q1FY26, as other income fell to Rs 41 crore from Rs 58 crore following the deployment of QIP proceeds into data centres, AMI and TBCB projects. Finance cost declined 46 per cent year on year to Rs 6.6 crore. Standalone EPS was Rs 8.27 compared with Rs 10.60, with the prior-year figure also benefiting from discontinued-business income.

Consolidated Q1FY27 revenue grew 20 per cent year on year to Rs 630 crore, while EBITDA grew 8 per cent to Rs 100 crore, with a 15.79 per cent EBITDA margin. Consolidated PAT declined to Rs 93 crore from Rs 111 crore, reflecting lower other income and higher depreciation after the Chennai and Edge data centres began commercial operations.

Management reiterated standalone FY27 revenue guidance of Rs 4,000 crore or more and EBITDA margin guidance of around 13–14 per cent. Ajcon’s FY27E consolidated estimates are revenue of Rs 4,000 crore, EBITDA of Rs 536 crore, EBITDA margin of 13.4 per cent and PAT of Rs 479 crore.

Order Book and Transmission Growth

The unexecuted order book stood at Rs 9,596 crore as of June 30, 2026, and increased to Rs 11,000 crore by the August 12 earnings call after fresh wins. The T&D vertical comprised Rs 6,146 crore of transmission EPC orders and Rs 492 crore of TBCB assets.

Q1FY27 order inflow was Rs 666 crore, with Rs 1,530 crore won after the quarter, taking year-to-date inflow to Rs 2,196 crore. The company was also L1 on Rs 2,100 crore of additional bids. Management expects FY27 order inflow to exceed its earlier Rs 4,000 crore objective.

Ajcon sees the company’s high-voltage transmission presence and widening exposure to digital substations, HVDC corridors, synchronous condensers and dynamic reactive compensation as advantages in the transmission-capex cycle.

Smart Metering and Annuity Opportunities

In AMI, Techno Electric has contracts for 22.4 lakh smart meters across four states under a 10-year DBFOOT model, representing Rs 2,600 crore of project value. It had installed 18.5 lakh meters by Q1FY27, or about 77 per cent of the portfolio, compared with 15 lakh at March 2026. The remaining 4 lakh meters are targeted for completion by December 2026.

Madhya Pradesh has entered the 93-month operations and maintenance annuity phase. Management expects AMI to be broadly self-funded in FY27, with Rs 450 crore of collections against Rs 400 crore of remaining deployment capex.

Ajcon believes annuity income from smart meters and TBCB asset monetisation should improve earnings quality and predictability. Contract assets of Rs 1,500 crore, mainly smart-meter and TBCB/JV CWIP, could offer a bottom-line unlock upon capitalisation or monetisation.

Techno Digital Data-Centre Outlook

Techno Digital is a longer-term growth lever. Chennai Phase 1 is live and demand has exceeded planned capacity. Noida’s 16 MW site is targeted for commissioning in Q4FY27, while Kolkata’s 12 MW facility is targeted to be live by FY29.

Management retained data-centre FY27 revenue guidance of Rs 40–50 crore despite 150 MW of IT load under active discussion, more than 30 opportunities and 10 new customer logos. The company targets 250 MW of operational data-centre capacity by FY30. Ajcon notes that data-centre monetisation and P&L benefits are more likely from FY28 onwards.

Key Risks

• Transformer and CRGO steel cost inflation could pressure margins.
• Supply-chain pressure may affect execution profitability despite current cost controls.
• Near-term data-centre execution and monetisation remain risks despite the stronger demand funnel.