Synopsis: Techno Electric remains focused on capitalising on India’s power infrastructure and digitalisation opportunities, supported by a strong project pipeline, expanding data centre presence, and improving long-term earnings visibility.
The shares of this small cap company majorly engaged in delivering EPC solutions across transmission, smart metering, FGD projects and many more were in focus after the brokerage sees 36 percent upside potential
With the market capitalization of Rs. 11,910 Crores, the shares of Techno Electric & Engineering Company Ltd were trading at around Rs. 1029 per share which is 37 percent discount from its 52 weeks high of Rs. 1655 per share and is trading at a P/E of 26.7 whereas industry P/E stands at 16.9
Brokerage View:
Nuvama has maintained a ‘Buy’ rating on Techno Electric & Engineering with a target price of ₹1,400 per share, implying an upside potential of about 36% from its current price of Rs. 1029 per share. While the brokerage has moderated its earnings estimates to reflect near-term execution and supply-chain challenges, it remains constructive on the company’s long-term prospects. Nuvama believes Techno Electric’s combination of transmission and distribution (T&D) opportunities, smart metering projects, and a rapidly evolving data centre business provides multiple growth levers that can support earnings expansion over the next few years.
Order Book and Execution
The brokerage highlighted that Techno Electric reported FY26 order book of around ₹95.7 billion, equivalent to 2.9 times FY26 revenue, providing strong revenue visibility. Revenue growth during FY26 was impacted by supply-chain constraints, logistics issues and higher procurement costs, which affected project execution and margins. Despite these challenges, the company maintained a healthy backlog that supports future growth.
Data Centre Business
According to the report, the first phase of the Chennai data centre was commissioned during FY26. The company is progressing with subsequent phases and is targeting additional facilities in Noida and Kolkata. Management expects data centre revenue of ₹400–500 million in FY27 and has outlined a long-term aspiration of ₹40–50 billion in data centre revenue by FY30, supported by a capacity target exceeding 250 MW.
RailTel Edge Data Centre Opportunity
Techno Electric has secured a concession from RailTel to develop more than 100 edge data centres across 102 locations over five years. The project spans 23 states and is structured under a design-build-operate-finance-transfer model. The brokerage believes this initiative could create a significant long-term opportunity in edge computing infrastructure.
Transmission and Distribution Opportunities
The report notes that the company is positioned to benefit from investments under India’s National Electricity Plan and opportunities in smart metering. The current smart meter order book stands at approximately ₹15 billion, while distribution infrastructure orders excluding smart meters are about ₹3.7 billion. Management expects execution in this segment to improve as installations accelerate.
Margin and Earnings Outlook
Nuvama highlighted that Techno Electric continues to deliver industry-leading EBITDA margins of over 14%. The brokerage expects margins to improve further over FY27E-FY28E, supported by execution recovery and incremental contribution from the data centre business. It projects EBITDA margin expansion to 17.3% by FY28E.
Conclusion
Techno Electric remains well positioned to benefit from India’s expanding power infrastructure and growing digitalisation needs. A strong order book provides healthy revenue visibility, while opportunities in transmission, smart metering and power-related projects support the core business outlook. At the same time, the company’s data centre initiatives, including hyperscale and edge facilities, offer a potential new growth avenue over the long term. Although near-term execution challenges have led to moderated estimates, the overall business pipeline and diversified growth drivers continue to underpin a positive medium-term outlook.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
