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Techno Electric & Engineering
hosted a conference call on May 31, 2022. In the conference call the company
was represented by P. P. Gupta (Chairman and MD) and Ankit Saraiya (Director).
Key takeaways of the call
Order inflow in FY22 was Rs 800
crore. Order backlog as end of March 2022 was Rs 2022 crore. Subsequently the
L1 Orders (Two Rajasthan FGD orders of 1600 crore and other transmission orders
to the tune of Rs 445 crore) turned firm) taking the unexecuted order book as
of today to more than Rs 3500 crore. Further the company is L1 for orders
amounting Rs 1000 crore. This order backlog (including L1 orders) of more than
Rs 4000 crore is after 5 years and provides strong revenue visibility. The
current L1 order book of the company include and FGD order from DVC worth Rs
700 crore (this order was retendered after no response last year).
Expect FY23 to be a year of
stabilisation and growth. Especially major growth to happen in the second half
will see strong growth. Expect large
growth happen in FGD, AMI, Data Centres.
FGD market (order pipeline) continue
to be strong this year and next few years. The thermal plants are to comply the
emission norms by Dec 2024. FGD orders are yet to be tendered out for a strong
180 GW. There is considerable progress
in this regards in case of SEBs, CPSUs and private sector.
It is status quo in case of
Transmission Systems. The focus is on evacuation systems for renewable
energy. The company is focussing on TBCB
orders. The company is fully qualified for PGCIL tenders. So the company
expects its rightfull share in PGCIL tenders as well as TBCB tenders. It has already bagged few orders from Adanis.
Expect to close current fiscal
(ie. FY23) with an order backlog of Rs 4000 crore and next fiscal with Rs 5000
crore.
Next 3 year the company expect
the STO of the company will double. The
top-line of the company in the next 5 years to be driven by FGD, transmission
and DC to the extent.
Data Centres (DC): Already in the
process of setting up the Chennai DC at Siruseri with a capacity of 40 MW.
Construction work is already started and the first phase will be ready by Jun
2023. By Sep 2022, the company will
rope in the partner, the company has already see strong interest various
leading players to partner. In DC space
the company has already spent Rs 50 crore
and intend to spend another Rs 500 crore in 2022-23 and another Rs 500
crore in 2023-24.
Pressure on EPC margin in Q4FY22
was largely due to higher inflation and commodity prices as well as higher
overseas wages.
Expect an EBITDA margin of about
12.5-13.5% for current fiscal in EPC business. Seeking some kind of passing on
the input inflation to customers.
Wind energy business revenue for
fy22 stood at Rs 85.63 crore vs Rs 64.15 crore last year (adjusted for one time
revenue for tariff orders amounting Rs 36 crore).
Of the surplus cash on hand, the
company will deploy Rs 500 crore in Data Centre business, Rs 500 crore will be used to pay back investors (either
buyback or some other) and Rs 200 crore for EPC business in next 3 years.
Contribution of revenue from Data
Centre business vertical to start from 2023-24 and more prominent in 2025-26
almost 20% of revenue to come from Data Centre.
Target 250 mw of DC capacity by
2027. Want to perfect technology in
construction of own DC and then it will target 3rd party DC works
(expects it to commission its DC by June 23).
All FGD order of the company
includes Price Variation Clause. Fixed
price orders will happen in private sector orders. The company outsources equipment (Korean
Technology) in FGD projects, and typically have O&M contracts.
FGD orders, the cost is now Rs 1
crore per MW and not Rs 60-70 lakhs any more.
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