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00:00Technoelectric is in focus on the back of couple of things it came out with its Q1 earnings as well
00:05as it is entered into partnership with Indigrid for developing Greenfield Transmission Projects
00:10where it will develop two Indigrid's Greenfield ISTS projects. In terms of Q1 earnings revenue
00:16was up around 37 percent, EBITDA was up 145 percent, EBITDA margins went up by 600 basis
00:22points and net profit was roughly up around 288 percent. But to discuss as to how the quarter
00:27has gone by and how FI25 is shaping up, we are joined by Mr. Padam Prakash Gupta,
00:32MD at Technoelectric who joins us now. Welcome to the show Mr. Gupta. My first question to you is
00:38your understanding of how Q1 FI25 has been. Margins have seen a significant uptick. Do you see that
00:45these margins are sustainable throughout FI25? Ma'am, firstly in our sector all four Qs are not
00:54alike. Generally Q1 is weak compared to Q2 and Q3 and Q4 are always together continue 60 percent
01:04of the top line, number one. And number two, margins are sustainable to the extent of the
01:14very performance of the business ongoing. In Q1 we have earned some income out of the discontinued
01:23business that may have also given some impression in the market. But there is more in the pipeline
01:33to come because as conservative we are in our accounting. We generally account these incomes
01:39as and when received rather than as and when we won some regulatory issue in some competent court.
01:49So they were never accounted for in the books. We are hopeful of getting more income in Q2, Q3
01:56also out of the discontinued business. But coming back to our main business, it's a growth. We have
02:03targeted 2500 CR this year. It will definitely be achieved. We have enough order book in hand with us.
02:11In-grid partnership is also in place as strongly as we have with power grid. We have with Adani
02:21or Sunlight or Aparava. So I think it's a very exciting place contributed both by
02:31conventional power growth as well as by energy transformation by deploying 500 gigawatt of our
02:39target of the year by 2030. So all those are bringing very exciting opportunities.
02:47So then my question to you is that your margins have improved by 600 basis points considering
02:51all of this. So the margins which are at 13.9% are these sustainable throughout FY25?
03:00Into 15% we have always targeted that. They will be there.
03:04Okay. Also, Mr. Gupta, your order book roughly stands at 9100 crores. I want to understand what
03:11will be the execution timelines for this entire order book? Generally, it is ranging from one and
03:18a half to three years. So maximum you can take given all kinds of delays which are inevitable
03:25in our industry in land acquisitions, right of ways and all that. You can say maximum of three
03:32years they have to be executed fully. Okay. And what is the amount of new orders that you've
03:38received this quarter? And overall in FY25, if you have a rough target as to what is the kind
03:46of order inflow that you're expecting overall in FY25? Should be around 4000 CR may exceed 4000
03:56also. But our target is to have 4000 CR out of which in this quarter we have already achieved
04:06almost about 1600 CR and we are also L1 in another 1200 CR which should crystallize in Q2.
04:14And Q3, Q4 should definitely build the rest. Okay. So Mr. Gupta, if you've already had an
04:24order inflow of 1600 CR this quarter itself, do you think that you're being conservative
04:28in the kind of guidance that you're giving for the entire FY25 for 4000 CR order book?
04:36To be conservative is always good. I believe one thing in my life. Number two, you see,
04:44ramping up execution in our sector is not all that simple. It takes time to build capacity,
04:51to stay disciplined, grounded and healthy in processes. So it's always a good idea to
05:00grow in steps rather than jump and feel sorry about it. So we have a growth in steps.
05:10Last year we doubled from 900 to 1600. This year we are now targeting 2500 and 26 is planned at
05:193500 and so on. So it will grow in steps. Okay. Okay. Fair enough, Mr. Gupta. My next question
05:28to you is with respect to Indigrid, you have entered into a partnership with them and you're
05:32going to be developing greenfield transmission projects. Give us some more color as to how this
05:37is going to work. What is the kind of revenue potential and what is the kind of impact it'll
05:41have on the margins as well as bottom line? And firstly, our relationship with Indigrid
05:48is not new. It's an old relationship where we developed two assets and part with them,
05:57or they bought from us rather. One was the KT Jajjar in Haryana and other was Patra in Punjab.
06:04And now it's a phase of trust building, I would say, having experienced our
06:11marquee assets in two locations successfully by them. So they want to trust us to develop
06:18their own concessions won by them. And similarly, I'm sure we will also be
06:26transacting the concessions we have won and developing.
06:31So the relationships are very strong, very bonded. Trust is building up. And as you know,
06:39Indigrid is a first in the transmission sector, 10 year old and very successful,
06:45backed by a strong fund, KKR. So all this sounds good for us, I would say,
06:51having strong partnerships with the financially deep pocketed companies like Indigrid.
06:57We are definitely looking on that to build more.
07:04Okay. Mr. Gupta, I want to shift focus to data centers because in one of your call calls,
07:09you said that you are discussing potential revenue models for data centers,
07:13and you're also planning the financial viability for the same. So I want to understand if there's
07:18any update here. And I also want to understand that how big is the size for data centers and
07:25how can you scale up here? Firstly, I will say data center is a very exciting space,
07:34particularly for companies who are in power, I would say, because the only material required
07:41in data center is power, power and power. So it is a multi-layered power solution and
07:47TECNO understands the best in deploying IE and MEP solutions, deploying ACDC solutions,
07:54integrating them along with fiber. So it's a good, having demonetized all the
08:03assets we built over the last 15 years in wind power or transmission, we have good cash with us
08:12and it's a very profitable space. And exciting because of DPDP policy of government of India,
08:18who also wants to encourage this space. And it is very power-consumptive space,
08:24additionally, I would say. So it helps both ways, backward integration and forward
08:29integration for TECNO both ways. So we are very excited and as conservative we are,
08:35you know, rather than competing in more in hyperscale category, we decided to be part of
08:42data centers. We have relationship with RailTel now, we will be deploying data centers at each
08:48railway station of the country, no less than 100 of them. And as you know, in India, all cities,
08:56entire two, three are built around railway stations in our country. And last mile delivery
09:03is more important than where you store and process the data or IoT or OTT or
09:11anything to do with the consumer, you know, deliveries. So we believe and TECNO is good
09:18in deploying always, having successfully for last four decades, done no less than 450 projects in
09:25power. So it should be simpler call for TECNO to deploy as data centers and under all locations
09:32successfully. And it can be an excellent, you know, combination between hyperscale data centers
09:41at Chennai, Kolkata, or going forward in some third pockets, as well as connecting them to
09:50edge data centers all over the country. Additionally, AI has further fired this space.
09:56And as you know, this is still everybody is trying to understand and figuring out
10:04how AI is going to impact this space. It can be, you know, data centers can easily move from
10:12gigawatt to megawatt scale as I see has happened in renewable power as it happened in transmission.
10:20Okay, well, Mr. Gupta, thank you so much for giving us those comprehensive answers and taking
10:25our time and speaking with us at NDTV Profit.