Ladies and gentlemen, good day and welcome to the Q2 FY25 earnings conference call of Techno Electric & Engineering Company Limited, hosted by Asian Market Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ from such expectations, projections, etc., whether expressed or implied. Participants are requested to exercise caution while referring to such statements and remarks. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone.
Please note that this conference has been recorded. I now hand the conference over to Mr. Suresh Sonulkar from Asian Markets Securities. Thank you, and over to you, sir.
Thank you, Jakob. Good afternoon, everyone. On behalf of Asian Markets Securities, we welcome you all to Q2 FY25 earnings conference call of Techno Electric & Engineering Company Limited. We are pleased to have with us Mr. P. P. Guptaji, Managing Director, and Mr. Ankit Saraiya, Director, representing the company. Now, I request Sri Guptaji to take us through an overview of the company's quarterly results, and then we can begin with the Q&A session. Over to you, Guptaji.
Thank you, dear. Very good afternoon to all of you, and I welcome everyone to discuss our financial results for the quarter Q2 and half-year ending 30th September 2024. Anything said on this call, which reflects our outlook for the future, or that could be construed as a forward-looking statement, must be viewed in conjunction with the risk that the industry and the company faces. Let me first highlight our performance. The results of the company are not comparable on quarter-on-quarter basis due to the very nature of the business, and we have maintained this in our earlier calls also. As earlier discussed, H1 generally contributes 40% of the full year, and the balance 60% is in H2. In this respect, we are short by around INR 100 crores in H1. That is about 40% of INR 2,500 crores we target for this year.
This is basically due to the delay in handing over sites by various clients like Power Grid, IndiGrid, Apraava Energy, or Adani Group. But out of this now, we have already received four sites from Adani Group and Power Grid, and we are confident to make it up in the H2 as we have a robust order book and clear visibility of additional opportunities in the T&D sector. We would like to highlight that the average order value now is almost doubled in recent times. So though the total order value may seem high, but the number of sites are more or less same or less. At the same time, the speed of executing these projects is becoming a norm or requirement of most of our customers. They want to make up for the lost time in acquiring the land parcels and handing over to us for the deployment of the solutions.
The most interesting recent experience in H1 relates to Sikar Power Grid, where the site was handed over to us after a delay of almost two years, and we were asked to complete the project in nine months as against the execution time as per contract of 19 months. And I am happy to say that we are successful in doing it, and Power Grid acknowledges this achievement, first time in the country of this scale and size of projects being deployed in such a coordinated and integrated manner. So Techno has a proven track record and is competent to do faster things. So speed is going to be the way of deploying these solutions in the future. You are all aware that we have been deploying a 40-megawatt data center at Chennai.
The phase one of this data center is nearing completion, and SPV is still in the implementation stage. It has not achieved the revenue-accretive phase, but it's definitely extremely value-accretive. There is a good interest from the foreign entities to be part of this project. In the consolidated results, we knock off the financials of the SPV data center, so that is the difference between the standalone and consolidated results. We will be, of course, this won't be a requirement once it becomes revenue-accretive. In brief, the first half of financial year 2025, our revenue has been around INR 914 CR. The EBITDA is about INR 126.13 CR. The other income is at INR 62 CR.
The profit before tax stands at 180 CR, and profit after tax is at 145 crore, which implies compared to 125 crore of the previous year, it is 16.5% up over the last year, and EPS is at 17.16, which is up by about 50%. Now, coming to Q2 of financial year, our revenue is at 495 CR, and the EBITDA is at around 65 CR. The EBITDA margin is at 13.26%. The other income is at 28.3 CR. The profit before tax is at 4.28, and the company has successfully collected all the outstanding as per our books from TANGEDCO . That's a major achievement in this H1. The track for the quarter is at 90 crore, about 27% of year-on-year, and EPS is at 7.88, up by about 19% year-on-year. The current investment at cash is at around 2,600 crore, which is about 225 rupees per share.
We have an extremely robust order book of around 9,725 crore as of September 2024. We have further booked business. We have booked business worth 642 crore in Q2 and another business of around 1,100 crore post-September till date. Thus, we can say that we have a current order book of around 10,800 crore plus unexecuted. We are L1 in another 622 crore order, out of which both are very short. Additionally, I would like to say that in Q1, where we were L1, the all opportunities in L1 stage have converted into orders successfully. We have various bids in pipeline and are confident to get additional orders for around 1,500 crore in the current financial year. This will take our total order tally in the current financial year to around 4,000 crore. This simply reflects post-order execution for the current year.
We will still have enough orders in hand to keep the growth momentum going. The company has successfully raised capital or completed QIP for 1,250 crore in the first half of the current financial year. Now, coming to the outlook, we have been able to tide over most of our difficulties and weaknesses up to the close of the financial year 2022-23. We saw some growth momentum in the year 2023-24, and the same will continue for the next few years as we foresee. We expect larger business out of transmission, basically high-end power solution deployment, data centers, hyperscale MS data centers or distributed data centers, AMI segment, and also somewhat of digitization solutions in the power distribution space under RDSS scheme, and also a muted presence in the AMI scheme.
The present, after witnessing negligible or mild growth on energy demand for the last eight years, first time last year we experienced growth in energy by almost touching double digits. The present peak load demand is about 240 gigawatts or more, and this is likely to be 400 gigawatts by 2030, thereby employing a per capita consumption of no less than 1,700 units by 2030, as against 1,200 units today. To meet this demand, the government is concerned, and the power plant capacity is planned to be enhanced by 80 gigawatts in the conventional power space by deploying ultra-supercritical power stations, along with renewable energy deployment to the extent of 500 gigawatts by 2030.
All this means that the sector is transforming technologically and also deploying high-end power generation and power transmission solutions, and all solutions like supercritical power plants, 765 kV AIS, GIS transmission solutions of gigawatt scale, STATCOM solutions, VSC, HVDC solutions, solutions backed by BESS or PSP facilities, where your company has a larger presence than any other entity in the marketplace. Your company is usually focused on the areas like transmission solutions, particularly high-end HVDC solutions, including STATCOMs and VSC, HVDC solutions. We are also present in the hyperscale data centers. We are present in EPC. We are doing smart metering implementation for 2.5 million meters. We are doing digitization of the power distribution networks of the DISCOMs in their command areas. All these verticals are of potentiality, and this implies a paradigm shift in the positioning of the company.
From the current mix of 43% of the total installed capacity, the renewable energy is expected to be around 64% by 2030 due to the significant growth rate of around 15%-20% CAGR, as against 4% of fossil fuel. India aims to expand its renewable energy portfolio beyond 500 gigawatts, and the target of 2030 is more or less on track achieved by 2030, and the matching transmission infrastructure will be required, which is almost 4X as against 1X of the conventional power. So this will continue to give boost to the renewable power. As per CEA report, the transmission system required for 500 gigawatt RE capacity will require no less than 50,000 circuit kilometers of lines and another 435 GW of transformation capacity. With the implementation of these programs under ISTS regimes, the interregional transfer capacity will improve to 150 gigawatts.
The National Electricity Plan has already estimated the investment opportunity of more than INR 900 crore in this space by 2032. The Power Grid will be the largest beneficiary, and we being one of the largest solution deployers at station level for the last 35 years, successfully seeing incorporation, and with the planned CapEx of INR 1.75 lakh crore up to 2030, their annual CapEx will increase to INR 25,000 crore by 2026 from the existing INR 50,000 crore a year. This makes us optimistic pickup in Power Grid, as well as we expect larger inflow of orders from private players in this space, while we'll also be seeking some opportunities in TBCB space to ourselves. Apart from this, we are now seeing huge opportunity in STATCOM projects to be deployed.
Power Grid has already amended their qualification, and we are now qualified as a four-wheeler, backed up by the support from the critical equipment suppliers. The data centers will also create huge additional demand for power. As mentioned earlier, to meet this increased demand, the government mentioned already to enhance it by conventional power as well as renewable power. In the conventional power, again, there will be a good scope for us on the balance of plant and particularly on the power evacuation facilities, what we call step-up facilities and grid integration for the utilities, particularly NTPC, will be one of the key beneficiaries other than other CPSUs in this space. On the distribution side in RDSS plan, we see a lot of activities happening, including deployment of smart meters.
We are also deploying now about 2.5 million smart meters per year, 2.5 million smart meters over the next two years. This year, we will deploy about 500,000 and another 1 million each over the next two years. The counterparty risk being a bit higher compared to transmission, we are conservative in this space. We see slowdown in MTD segment, particularly after NITI Aayog report, but the orders in hand will continue to be executed at the given pace. Some business, maybe to the extent of 5-10 gigawatts per year from private players as well as SEBs, will continue to be in this space. In the transmission segment, I have already highlighted that around 50-100 gigawatts of bidding is happening, and almost four to five concessions are being finalized every month. I wanted to talk with our two private players.
This means almost around 40,000 CR business, and out of which we will be expecting business worth 2,500 crore per year over the next three to four years. We currently have orders worth 6,500 crore in this space, and we are L1 in another 650 crore segment, one which Power Grid has already won the concession. So this will materialize in this quarter into the order. Our projects won in TBCB and Gokak and Gokazan with their total revenue, visibility of 2,800 CR over the concession period are under execution, and we are confident to achieve it ahead of the schedules. Similarly, our smart meter deployment is going on as per the program. In the smart metering space, we expect business worth about 1,000 CR per year for deploying about a million meters per year. As mentioned, we have orders worth about 2.5 million meters worth about 2,500 crores.
Ankit, would you like to highlight data centers? Yeah, sure. So on coming to data centers, I believe that digitization, adoption of cloud services, and AI, and implementation of 5G in tier two, tier three cities, apart from tier one cities, the government's focus on data protection and ensuring that the data of the country resides in the country. All of these are leading to more and more demand for data centers. They are the warehouse where the data is stored. If today the market size of data centers in 2024 is close to about, I would say, 1,300-1,400 megawatts, then we can expect a growth rate of 15%-18% year on year, and we should have a total capacity of roughly about 4,000 megawatts or 5,000 megawatts by 2029. Apart from our initiatives, as we've spoken earlier, we've already started our construction in Chennai.
It is in very advanced stages, and we've started commissioning activities on the ground. We are hopeful that in another couple of months' time, the data center would be ready for RFS for service. Apart from that, on hyperscale data center side, we've already been allotted the land in Kolkata by the state of West Bengal through their body called West Bengal HIDCO. It's a four-acre land parcel in client location named as Bengal Silicon Valley. We should be coming up with the data center from next year onward. We should begin the construction activity somewhere around mid-next year or towards the second half of next year and possibly complete the construction by mid of 2027. This would be roughly about 15- to 18-megawatt data centers. Apart from that, we are executing edge data centers in strategic partnership with RailTel, Navratna PSU.
We've already started construction of our first location at Gurugram. It's at Sector 44. We're expecting handing over of a second location from RailTel in Mumbai, right across the very well-known St. Regis Hotel at Mahalakshmi. The size of these locations, the one in Gurugram, is a smaller project of 20 racks, totaling to 200 kilowatts, and this would be expanded to close to about 1.5-2 megawatts over time. The one in Mahalakshmi is starting at a capacity of 560 kilowatts with 56 racks, and that should also see a daylight of about 1.5-2 megawatts over a period of time. We've seen good traction of customers for edge data centers. In Gurugram, we are close to finalizing a few customers, accommodating them within these 20 racks.
We are seeing interest from hyperscalers as well to lease out these edge data centers in selective cities, and we are working closely with a couple of such hyperscalers to deliver to their requirement. All in all, it looks exciting and, I would say, promising time and space for this industry. Yeah. Yeah, so that's on data centers. Yeah, coming back to the now taking over from what Ankit has said, overall, in the last five years, the company has successfully monetized its all deployed assets over 10, 15 years, worth about 5,000 CR in triple P model or TBCB mode. This resulted in a cash surplus, which is already discussed, and QIP has further added to the cash balance. We have sufficient financial resources to see this growth in data centers and in transmission space.
During the last year, as I had mentioned, I will again like to repeat that it is just the morning has happened, and this is the first sunshine, which will keep brightening with every passing year. We are confident to achieve, as I have repeated again, 2,500 CR plus minus during the current year, and a similar growth over next year, maybe around 3,500 CR. We are confident to have EPS of about 35 or more this year and 50 plus for the next year ending March 2026. With this, we can take up the questions now.
Hello. Shall we begin with the question and answer session?
Yeah, yeah, yeah. Absolutely.
Sure. T
hank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.
If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands up while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abhijit from ICICI Securities. Please go ahead.
Thank you for the opportunity. Sir, my first question is on the revenue. So in the first half, we've done about INR 913 crores, and we are aiming for about INR 2,500 crores for the full year. So that means we'll have to grow at about 2x of last year's second half into H2 FY25 to meet that kind of revenue, which also would mean about INR 800 crores of run rate from INR 500 crore in this quarter. So what will drive this kind of execution jump in the next two quarters? That is my first question.
May I answer, or you would like to put your question to also?
So the second question is on the order book. So we have about INR 9,700 crores of orders. Is there some slow-moving orders in this order book? And if yes, what is the quantum of those orders?
Yeah. Firstly, you see, I said H1 we suffered because land parcels were not available from the customers who placed orders on our smart deployment of stations. We have received now four land parcels, three from Power Grid and one from Adani. We are still awaiting two more land parcels from Apraava and HIDCO, which is expected shortly. But now with the land parcels being available, the execution pace will be much faster.
And as I shared with you, that is the requirement of the customer also, that they want us to complete the job in no more than six to nine months, which earlier used to happen over 12 to 18 months by and large. So with this, we are confident that this weather is going to generally ensure either better weather to work in this country from the field point of view, from the factory point of view. And Q4 is always larger than Q3. So generally, our takeaway is that Q3 is about 22%-25%, and Q4 is always about 30%-35%. So we are very sure given a margin of 5%, we should be able to hit the bull's eye. Number one. Number two, out of the order book, there is no slow-moving order books as of today with us.
Because all these TBCB projects have a COD date with the customer, and whatever delay happens in giving us the inputs or land parcels, they ultimately want us to squeeze the execution.
Right, sir. Right, sir. So then lastly on the margin, so this quarter, on a year-on-year basis, there is about 160 basis points compression on the EBITDA level. And we have seen an increase in the cost of services and raw materials. So if you could particularly highlight what is causing this kind of cost inflation, which is faster than the revenue growth, and what kind of margin do we expect in the second half?
You see, the problem here, as I mentioned earlier also, I'll repeat again, measuring margins quarter on quarter in a construction or project business is extremely difficult. This depends on how you book your revenue, how you book your costs.
You are a bit conservative, logistic, optimistic. Many a time, we miss to book the revenue because bill has not happened or work has not been measured. All materials have not been cleared as well supplied. So we also know over the year you always have a time to catch up. So you will find that overall margin, as I have stated, will be almost around 30%-40% over the year. In some quarter, it may be 1% more; in another quarter, it may be 1% lower. But at the end of the year, you will see that it is all neutralized.
All right. So lastly, what is the status of our Chennai data center, and when do we expect commercial completion for the same?
Ankit, would you like to answer?
Yeah. As I mentioned in the opening remarks, that we have already started the commissioning activities for the data center, and we should be able to achieve an RFS, which is the commissioning when the customers can begin handing over the location to customers who are moving in, should be somewhere around January.
All right. All right. Thank you, sir. I'll come back to you.
Thank you. The next question is from the line of Anurag Agarwal from Multifi Wealth. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, I wanted to ask more about the smart meter deployment. How do you see that faring up? Are there any execution risks which are playing out?
I'm sure it's yes and no both. There is no basis, but nothing new is happening, I can say that, Anurag.
It was known while booking the business and today also. Because the counterpart is DISCOM, so some interruption is a natural way of doing this work. But Techno is very experienced in deploying these solutions. So this year, that's why, and we have a kind of, I'd say, muted presence also in this segment against other players. We don't want to do more than 1 million meters a year, as I shared with you, with 500,000 this year, as DDF creation by the utilities were delayed, which happened only in Q2 with us at Tripura or at Jharkhand or with even J&K, I would say. So by and large, we will not like to be very, very aggressive and optimistic like other players in this space. But our major graphic space will always be transmission, ISTS, and EPC using power generation, I would say.
Our data center is now very, very exciting and fascinating phase for us. But yet, smart meter will have a presence. It's with our own customers. We don't want to be out of it. And secondly, let me tell you, you see the smart meter are yet not declared an infra business by the government. So many in which are not part of it. You cannot part of your assets to invent or similarly to many government funds. This status is granted to this space like transmission or power generation. They are not alike on the regulatory framework. So some issues are there in this space, but still some companies are more optimistic than us. We are not.
Got it. Thank you for the detailed answer, sir.
Thank you. The next question is from the line of Nivisha from ICICI Securities. Please go ahead.
Thank you so much for taking my question. Could I get a breakup of the order book either now or at the end of Q2 between generation, transmission, distribu tion, and data center?
Yeah, mainly it is mostly out of the transmission, I would say. And the total order book breakup, if you want to note, you can. The transmission is about INR 4,671 crore. Out of our own TBCB assets is about INR 687 crore. FGD is about INR 1,200 crore. Digitization of distribution network for DVC is about INR 290 crore. And smart meter is INR 2,500 crore. And another data center you can take about another INR 100 crore is left.
All right. Thank you very much. Thank you.
The next question is from the line of CA Karmit Goyal from NVEST Analytics Advisors LLP. Please go ahead.
Hi. Am I audible?
Yes.
Sir, my question is on the diagnostic part only.
Firstly, I want to understand why there is a difference between the standalone numbers and the consolidated numbers. Like, consolidated numbers are less than the standalone numbers. So, can you please put some color on it? What is the reason for the thing?
We already made in our statement that we are the company at the parent level deploying this data center in Chennai. So, when you consolidate, those numbers get utilized in EPC space, but that will appear as a work in progress or as an asset in data center subsidiary when you consolidate. Only nomenclature change happens. I hope you have understood. The work executed for your own subsidiary gets utilized and reclassified as a work in progress or as an asset or whatever nomenclature you say, depending on billing.
Understood, sir.
So sir, while giving the guidance of like 25 minutes here, so is it for consolidated numbers or the standalone numbers?
Standalone numbers.
Okay. And if we compare it with the consolidated numbers, what would be that number for the full year?
You take it 2250.
2250, yes. And we are still guiding the same number for this year, right? Despite the challenges that we are facing. Absolutely. Got it, sir. And sir, secondly, like in our results also, there is a significant overdue receivables, and the auditor also highlighted the same, including those from long-standing projects, regulatory issues, and the unresolved arbitrations that is having a cumulative value of around 130 CR.
So could you provide a clear update on specific challenges that we are facing while recovering these amounts and the expected timeline for the resolutions and the potential financial impact that if these amounts are not getting collected?
No, firstly, it is not 130 CR. I don't know. It is a number which we have issues are two only. One is retention money receivable from a private player for whom we did a capital power plant, and the amount involved is 11 CR only. And second is the receivable from Afghanistan, where projects were suspended due to the political change. The contract is funded by ADB. Now, ADB has already come forward and agreed to pay the dues of KEC, Kalpataru, Explore, and whoever was involved in that CASA-1000. It was called CASA-1000 in Afghanistan.
Bills are under process, and we expect all this money to be received. It is about $7 million. We hope to get it before the close of this year now. There is no other issue in our books at all.
And this amount will be there by the end of this financial year, right?
Yeah, absolutely. Compared to total receivables, it is not even 10%. So there is no material effect. 10% of what, sir?
And it's there.
Pardon
10% of total?
I could not get your total means.
No, 10% of what? I'm asking. I could not hear that.
Of the receivables, which is about 550-600 CR.
And sir, lastly, you mentioned like two land parcels. We are still waiting for that, right? Is it like Q3 is also going to be in the same line, or we are going to outperform significantly?
Because in order to, we have to outperform significantly as compared to what we did in Q1 and Q2. No, I also mentioned we have got four land parcels, as against two not received. So four is good enough to make up the loss of this H1. These two anyway were planned as a distributed way, you can say. It was for 25, 26 only.
Got it, sir. Got it. That's it from my side, sir. Thanks.
Thank you.
Thank you. Ladies and gentlemen, if you want to ask a question. You may press star and one. The next question is from the line of Palak from MIV Investment Management. Please go ahead.
Hi, sir. So my question is regarding our FGD business.
So recently, we have come across an article where it was mentioned that based on the study, there was finding that the sulfur emission from the coal-based power plant is not harmful to the environment, means it's not impacting the air quality. So there has been a suggested draft that the government of India may stop the FGD tenders. And from my understanding, that currently our order book is about INR 1,000 crore. So can you help me understand the impact of what do you think about the norms?
Then I also mentioned to you there is a slowdown in this space post study of NITI Aayog and controversy at the political level whether our AQI will include sulfur or is it harmful or not. Ramesh of Congress has said otherwise. He was earlier an environment minister. He has questioned the present decision of the Ministry of Power.
But besides that, we have existing order of INR 1,200 crore that will continue to be executed as per the program, which is under execution. And we are also not expecting larger business out of it, as I told you, we are also. Because we don't want to take more than one project a year. Or maybe now we can say one project in two years, maybe out of private or SGBs. Certain critical pockets closer to urban areas or semi-urban areas, they will still have to deploy as per CA report. It's not a total no. But yes, it will be project specifically pilot now. But simultaneously, report also confirms the projects which are already in execution or ordered, they will be implemented as it is without any interruption. So that is the present status in this space.
Okay. So we are not expecting any significant inflow from the segment.
Absolutely. From this vertical. You are right. But this vertical is capable to do balance of plant for us in the generating plants, which we earlier used to do before migrating to FGDs. So we will do mechanical auxiliary in the balance of plant now. The capacity of the company will be redeployed in the critical super ultra super critical power plants of 80 gigawatt to be deployed by NTPC, by other state utilities or CPSUs, which they use business now for the next fou r years.
Okay, sir. Und erstood. Thank you.
Thank you. The next question is from the line of Srihansh Rathani from SG Securities. Please go ahead.
Hi. Good afternoon, sir. I had a couple of questions on the data center side. So the first is, what would be the cost per megawatt for these edge data centers?
I know in the last call you mentioned that it's higher than the data centers that you would have at Chennai and Calcutta. So just wanted to understand that.
Yeah. Ankit, would you like to answer?
Yeah. So you can say it will be roughly anywhere between 1.75-2 times the cost of a hyperscale data center. So one can estimate plus minus 50 lakhs, but about 8 crores per megawatt.
Got it. Okay. And for the Chennai project, what is the balance investment that we still have to do, and what have we already invested? How much have we already invested?
We have invested about 400 CR as of today. So for phase one, we are left to spend only about 50 CR crore, plus minus.
Okay. So phase on e is the 5 megawatt.
Yeah. 6 megawatt. 6. Okay. Sorry. Yeah. Okay.
But if grid load, it will be 10 megawatts, like you said.
Got it. So by when do we expect the full operational capacity for this center?
By March 26.
Okay. Okay. And how far are we in terms of finalizing on customers for this data center?
Ankit, so we are in discussion with potentially, I would say, a couple of customers. Today, we are still under final construction phase and the commissioning phase. Therefore, most of these customers want to see a project completed, which we had mentioned in the last phone call as well. Unless we've achieved completion, it doesn't give confidence to our customer to plan his movements because there can always be a delay in commissioning due to unforeseen circumstances. Therefore, I would say that the real hunt for customers would begin post the project is commissioned.
But having said that, in meanwhile, we are in discussion with a couple of good customers. And in meanwhile, we are also in discussion with a couple of strategic partners who may potentially show interest in this project. But today, our focus is largely to build our in-house sales, marketing, and operations team because Chennai is not the end of life for us. We would like to continue being a part of this industry through edge data centers and our upcoming data center in Kolkata. Therefore, it's not that we are really scouting for a strategic partner anymore, but building a team which can sustain this business for us for long term.
Got it. Just a couple of questions, if I can put in. So these edge data centers, what's the lead time for this construction time, and when do we expect to operationalize them from T0, for example?
So construction time literally depends on the status of many things. When we hand over the land from RailTel, some of them are partially constructed, some of them are completely constructed where we are only fitting out the electromechanical work. So depending on the status of that particular location, the construction period changes. It can range from anywhere between 3 months to 12 months. While we are already constructing one in Gurugram, and that should, as I mentioned, we should commission it by mid-December, end of this month or mid-December. That will be our first edge data center going live. We should be beginning the second edge data center in Mumbai sometime around the month of January. We should be handed over that location in January because they're still clearing out that area where they're handing over the plot.
We have already made a requisition of another 15 locations to begin the work. We have started to visit those locations. We are scouting for land along with RailTel, the one which is most suitable. I would say, as per the contract, we are supposed to deliver 20 locations every year. But on practical terms, I guess we'll see real action and execution of these projects from next year onwards. While this year, we should see our first one going live in Gurugram.
Got it. Thank you. Just last question. For the Kolkata data centers, do we expect the same amount of investment per megawatt as the Chennai center, or is it going to be more optimized given our learnings from Chennai?
I think it would be similar, maximum of 5-10% saving.
Okay. All right. Thank you. That's all from my end. Thank you.
A reminder to all participants to ask a question. You may press star and one. The next question is from the line of Ashish Soni from Family Office. Please go ahead.
Sir, what are your sense in terms of ground situation, in terms of transmission projects? Because we see a lot of government saying that we need to come up with a lot of schemes and EPCs. But apart from this land thing, what are the other challenges you are seeing on the ground currently?
So basically, land acquisition, right of way, which is often a problem. Some people object to putting a tower foundation. Although we are not in the line building, the substation is abutted and bound once land parcel is acquired and handed over to us.
But the ownership in India is so fragmented in these rural places that acquiring 150 acres or 100 acres, you have to buy out from no less than 100 landholders. So, doing documentation involving commissioner-level people, land revenue departments, checking their records, authenticity. So, legal processes as well as information on the ownership, willingness of the owners to part with the land parcel. All these are still in India a bit arbitrary and challenging. That's why it was 64 approval of Government of India, credit notification. All legal requirements are there. But our courts do not function or bureaucratic machinery is not all that efficient. But still, I will say in the world, we are doing the best.
But do you think in terms of delay in executions because of all these factors, or do you think government is coming or you guys are working with government to improve sort of? Because we keep on hearing next two to three years, at least there is a lot of transmission being planned. So do you see any improvement in this area in terms of government policy, state government, something of that sort?
Well, firstly, I think we should talk when it comes to states, which is very, very state specific. But coming to ISGS region, which is a central government project, the willingness is larger than the reality, I would say. They are all willing to improve, but there are so many government departments or government-owned ministries that are involved that they are not sure of what may slip out here at times.
But nevertheless, I will say there is a lot betterment than a year back or two years back. In countries like Europe or U.S., unless we hold land parcel or right of way are in. So the tender itself happens almost two years late. But in India, we are not waiting for all these approvals in place before tendering or selling out the programs. So it's a kind of a hybrid situation where the agency along with government finds out what to do. Challenges.
Okay, sir. Thanks. Thanks for the update.
Thank you. The next question is from the line of Shekhar Singh from Beltman. Please go ahead.
Yes. Hello, sir. Yes, sir. You can proceed with the question. Yeah. So my question is, any guidance for fiscal year 26 and any scope of margin improvement there?
No. You see, generally, these margins, because there is a lot of competition today in tariff bidding, and with most tariff bidding, there is not enough space with the asset owner to give you a higher price to the solution. But still, I will say the EBITDA achieved by Techno is one of the best in the industry.
Okay. Yeah. Yes. Yes, sir. Also, sir, could the slowdown in state government implementing smart meters hit our targets of INR 1,000 crore revenue in coming years?
Because we have been pretty slow in implementing the smart meters in the respective states. So the smart meter, I don't think we are slow. They have a delay in creating DDF. The direct debit facility is a part of the order, which they have to do the security documentation before the scheme implementation can be taken up.
Because unless you have the commitment of the state government to pay through the banking channels from the very account he is having with him on the revenue collection, the scheme is not achieved at zero date. The zero date is when DTF is created. So thereafter, it is going all right to my mind, other than a bit of interruption here or there. So it is no good.
Okay. Okay, sir. So basically, sir, we are in our right track to achieve the revenue targets for 2028 of around 10,000 CR approximately.
Yeah. Absolutely. There's no issue.
Thank you. Thank you, sir. Best of luck.
Thank you. A reminder to all participants to ask a question. You may press star and one. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead. Hi. So thanks for the opportunity.
The only question I have is, given the fact that there is a huge amount of bidding, which has happened in the last fiscal and this first half, right? So in the sense, are you seeing a lot of inquiries, opportunities, and do you think there's a fair chance that we'll bid this guidance of INR 1,500 crore additional order inflow in the H2?
Yeah. Actually, more than that, rather, I will say. Really. Like I shared, out of 1,500, we are already L1 in 670 crore. And those concessions are already won by board it. So I think before December, those orders will be converted. But there is no doubt we may beat this number also.
But do you think we'll beat it by a wide margin given that Fargate has won roughly around INR 80,000 crore in the first half, INR 80,000 crore indeed? That's a very large amount, right?
So we do only station work, and there's no other work. So maybe out of 80,000 crore, the station work is no more than 4,000 CR. 4,000 CR. Okay. Yeah. We don't supply transformer reactors. They procure directly. There are lines. There are HVDC packages. So all those are different types of solutions. But there are also STATCOM packages.
There are too many STATCOM packages, sir, right?
Yeah. STATCOM is smart now. They have qualified us now. So we stand qualified in our own merit and experience. So we've found a bid now, KPS1, KPS2.
So those bids are under evaluation. Is that right, sir?
Yet to be bidded, sir. They are issued inquiries to us now after qualification of assets. Okay. And how many bidders are there from STATCOM? Three, four? There should be no more than four.
Understood, sir.
My second question is, given that, of course, the large amount of bidding is happening, right? Which also means that we also have a fair amount of winning the new opportunities in TBCB, right? So how are you thinking about this opportunity? Are you seeing a lot of smaller opportunities where you can participate, or do you think it's only larger opportunities that are coming, and we are not interested in those larger opportunities?
No, larger, we are definitely not interested. We don't want to be part of these aggressive tariff bidding and RAs after. But up to INR 750 crore, or maybe in a substation work is larger than that, we may go up to INR 1,000 crore. So that is our appetite, sir, as far as that is concerned.
But definitely now, many other companies are approaching us to be part of that, like IndiGrid or Apraava. So we don't mind to be part of them as a risk sharing. The question is, what kind of risk or appetite you have for risk in all these asset ownership? Because asset ownership is not a business of Techno. Our business is EPC. But is it possible to take a smaller and smaller share, smaller and smaller shareholding in these SPVs and get the EPC contract? That will be beneficial for us, right? Yeah. We have done that. We're integrated now in Dhule and Srinagar. The two concessions, the one. We have taken 20% stake in Dhule SPV. And we are executing, deploying their solutions. Worth about INR 1,000 crore.
Is there any new opportunity, any new tender pipeline in the smart meter?
Are you seeing that, or is it very slow right now, and most of them will get shifted to the next fiscal?
You see, in smart meter, we are not active, let me put it. If there is a good opportunity, we can get at our price and terms, it's okay. Otherwise, we believe counterparty risk is high. I mean, that with discoms earlier in power agreements, renewable power. We were the first EPC company in EPC when we set up 200 megawatts and have gone through huge litigations with the TANGEDCO, all our deals. On the EPC, we put the same.
The last question is the infrastructure, sir. Are you seeing some movement? Are you seeing some opportunity which is coming up where you might be interested, or is it very slow?
Sir, there is no perfect answer to your question.
But if there is any sweetened opportunity, we won't miss out. If it is multilaterally funded, bilaterally funded, we are always there. But if any discom wants to do or any entity of state wants to do a project out of its own resources, we will definitely not be there.
Understood, sir. Thank you in all the way, sir. Thank you.
Thank you. A reminder to all participants to ask a question. You may press star and one. A reminder to all participants to ask a question. You may press star and one. As there are no further questions from the participants, I now hand the conference over to Mr. P.P. Gupta. Thank you. And over to you, sir. Yeah.
Thank you to all of you for very active and healthy participation and for joining the conference call with us.
In case you still have any query related to our performance, please drop us a mail to us or do visit us whenever you are in this part of the country. We have equally large office in Gurugram now, so at Motorola Excellence Center in Sector 14 of Gurugram. You are welcome to drop in and to see us actually at work. I thank once again everybody for joining the conference.
Thank you. On behalf of Asian Markets Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.