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Techno Electric &
Engineering Company hosted a conference call on May 30, 2023. In the conference
call the company was represented by PP Gupta, CMD.
Key takeaways of the
call
Order Intake in FY23
stood at Rs 3300 crore. Order book as
end of March 31, 2023 stood at Rs 3800 crore and additionally it is L1 for
orders worth Rs 1215 crore.
TN
Winds assets are almost stands sold. Of the total of 111.90 MW of wind assets in
TN, the company has signed MOU for sales of 108.9 MW with multiple buyers and
of these 108.9 MW about 105.3 MW is sold and assets were transferred to the
buyers. Balance 3.6 MW is also sold and pending to be transferred. This
leaves about 4.2 MW of TN Wind assets pending to be sold and these assets are
facing some title issues and the company is trying to sort out it soon. Remaining
wind assets in other states other than TN was 18 MW in Karnataka.
Cash
and cash equivalent post completion of buyback stands at Rs 1500 crore.
Expect
to bag order intake of not less than Rs 4000 crore in FY24.
See
strong business growth in FGD, DataCentres and AMI segments. The company is in
negotiation with private players for FGD order which the company could not
quantify at the moment.
The
grid has to be equipped to handle 30% renewable power injection so this comes
at an significant investment and opportunity for the company.
Strong power sector
reforms with focus on availability and reliability of power. Total bids in transmission side is estimated
to be about Rs 40000 crore and the
company expects to bag significant share of about Rs 3000 crore spread over 3-5
years. Distribution – major business
growth in this segment especially AMI. Expect to get orders worth 1000-1500
crore in next 4-5 year. The company is L1 in one package and executing one
project in the state of J&K.
Capex of the company’s
Chennai Data Centre is about Rs 1400 crore @ Rs 45 crore/MW. Civil works order
100% completed. Casting of last floor is expected by July 2023. 50% of long
lead items were ordered.
Standalone
revenue [including the revenue from execution of Data Centres & Techno AMI
Solutions (formerly Jhajjar Power Transmission) at costs] in Q4FY23 was about
Rs 450 crore and the company expects similar
level of execution in forth coming quarters with plus/minus 10%. EBITA for the
company stood at Rs 38.78 crore. EBIT for EPC stood 39 crore. EBITDA margin
misguiding as the company has taken the Datacentres and Techno AMI at cost as
per accounting standards, but the third party EBITDA margin in Q4FY23 stood at
12.5%.
Conservatively Rs 1300
crore 3rd party orders execution is expected in FY24. The company
will maintain margin of over 12.5-13% in case of EPC business, but the prices
of commodity are softening and it is stable the margin may be higher at about
14%.
The company don’t
want to book margin on its own subsidiary works and pay out tax. It want to capitalize
assets at subsidiary levels.
In case of FGD orders
bagged in last Jun/Jul 2022, the company have not booked any revenue yet and
hope 50% of the work will be completed this year and balance next year.
In case of AMI order
on hand it will be completed by no latter than Dec 2023. AMI order is an
fastrack job to supply 12 lakh meters.
Data Centre – EPC order
540 crore in case of phase I. Spent about 120 crore balance another 250 crore
in next 2 quarters and Rs 150 crore in next third quarter.
Receivables – trust not
take more than one year to recover the receivables from Discoms.
Not look to retain
any wind assets given the policy changes in power sector in general and
renewables. Buying renewable power in open market is more competitive.
The company will
double topline and PAT in next 3 years.
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