Techno Electric & Engineering Company Limited (TECHNOE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Techno Electric & Engineering Company Limited Q4 FY '24 Earnings Conference Call hosted by Asian Market Securities Limited. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on 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 to such expectations, projections, et cetera, whether expressed or implied. Participants are requested to exercise caution while referring to such statements and remarks. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Suraj Sonulkar from Asian Market Securities Limited. Thank you, and over to you, sir.

Thank you, Neha. Good afternoon, everyone. On behalf of Asian Market Security, we welcome you all to Q4 FY '24 Earnings Conference Call of Techno Electric & Engineering Company Limited. We have with us today Mr. P.P. Gupta-ji, Chairman and Managing Director; and Mr. Ankit Saraiya, Director representing the company. I request Sri Gupta-ji to take us through the overview of quarterly results, and then we shall begin with the Q&A session. Over to you, Gupta-ji, sir.

Yes. Thank you, Suraj. Very good afternoon to all of you, and I welcome everyone to discuss our financial results for the quarter ended 31st March 2024 and for the full year '23, '24. Anything said on this call, which reflects our outlook for the future or that could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the industry and in turn company faces. Let me highlight our performance and I'm very happy to share with all of you that so far, this is the best performance of the company in recent past, I will say, but this is only the beginning of the journey. I had mentioned a year back that morning has happened so you can take it as a first bright shine of the sun where sun is yet to go beyond 8 AM in the day horizon. Taking -- let me quickly highlight our performance for the Q4 financial year '24. The company has created as you all know, the setup ASPV for a 40-megawatt data center at Chennai. The asset is still in implementation stage and is not revenue accretive, but is definitely value accretive. In the consolidated results, we knock off the value of the work done for this SPV as per the accounting standard requirement. And that is the major difference in the stand-alone and consolidated results. As and when this asset becomes revenue-accretive, it will start showing -- it will become part of the mainstream results. As you can observe from the details furnished on the exchanges, the total revenue of the company in stand-alone is at INR 482.67 crores for this quarter and is up by 7.5% year-on-year and almost about 30% higher than quarter-on-quarter. The EBITDA for this company is at INR 58.84 crores and is up by 52% year-on-year. The other income is at INR 31 crores approximately, and it is higher by about 40% on last year. The profit before tax, PBT, is at INR 83.5 crores, higher by about 58%. The PAT of the company in this quarter is at INR 69 crores, up by about 91%. The EPS in this quarter is at INR 6.45, which is almost double of last year. In the full year, I will say our revenue is at INR 1,680 crores, which is about 75% higher on year-on-year basis. And EBITDA for the company is at INR 226.9 crores, which is almost about double of last year, the EBITDA margin is at 13% compared to 12.5% last year. Other income for this year is at INR 131 crores compared to INR 74.30 crores last year. The company has made in addition, another OCI income of net of tax at INR 28 crores during the year. The profit before tax is at about INR 334 crores, which is almost double of last year, and profit after tax is at INR 270 crores compared to INR 128 crores of last year, but if we add OCI income to it, the total profit will be at INR 298 crores. The EPS, without considering OCI income, is at INR 25.3 compared to INR 11.73 crores last year, which is INR 11.7 last year, which is almost 115% up. The cash or current investment value as cash and cash equivalent in our books continues to be at INR 1,200 crores, which again means about INR 110 [Audio Gap] And this treasury income out of this deployment of funds will continue to be a reckoning income for the company. For the financial year '24, we have received the order intake of INR 7,000 crores, an all-time high number, in our history of the company. The unexecuted order book is at INR 9,200 crores already and we are -- after March, we are already placed L1 in business worth about INR 10,050 crores. We have won during the year 2 TBCB concessions, 1 at Gogamukh and another at Bokajan, which together means revenue over the concession period entitlement of 2,800 crores. And the expected value of EPC works out of these 2 companies will be almost about INR 675 crores. Similarly, we are also placed L1 in Punjab for feeder metering, which is a high-end meter work. The total meter deployed is only 1.86 lakhs, but the order value is INR 661 crores implying thereby that each meter is about INR 37,000 to INR 38,000. We hope to get more business, but putting conservatively that we should at least can expect INR 5,000 crores this year too out of the opportunities available in the market, but the pipeline is a lot more. We have announced a dividend of INR 7 per share, which amounts to 350% on the face value of the share. Similarly, I would like to mention, as you all know, that we are likely to go for a QIP of INR 1,250 crores but mainly, we would like to engage with large FII FPIs and mutual funds for the issue. On the outlook side, I will say it is a very bright after a negligible or 0 energy growth over almost continuously for last 8 years, the energy demand is back and is all-time high and demand growth is in double digit now. The present peak load demand in the grid is no less than 240 gigawatt and is expected to be 400 gigawatt by 2030, thereby employing that as per the per-capita consumption of power in India is growing phenomenally, which is, at present, 1,250 units per capita is likely to be 1,750 units by 2030 so we are catching up with the rest of the countries in the world. To meet this demand, obviously, the power plant capacity has to be enhanced, both in conventional energy by 80 gigawatt as approved by government, and also the energy transformation is happening of achieving a renewable power penetration of 500 gigawatt to the existing to our grid by 2030 is also on track. All this means that the sector is now transforming hugely, and it will necessitate deploying high-end solutions, high-end in scale and complexity, namely supercritical power plants, 765-kv, area GIS Transmission Solutions, StatCom Solutions, VSC-HVDC solutions backed by [ best order ] pumping storage solution facilities or gas-based facilities where your company has a larger presence than any other entity in the marketplace, I will say. So I can call that all that this means what implies a paradigm shift in the positioning of the company in this space. As you all know that your company is presently present in all the areas of the power sector, we can call 360-degree presence in all value chain of the power sector, namely, we are part of the transmission solutions, high-end transmission solutions, we are part of the AQI solutions, namely FGD, Air Quality Implementation solutions. We are present in the digitization of the distribution networks as well as smart metering deployment and a large [ DSP ] scheme of the Government of India. We are also present in the hyperscale as well as in the edge data centers in the country going forward. So all this means huge business, all these verticals are full of potentiality and it is for the company now to take a larger lead and harness the opportunities. All these verticals are full of opportunities. Coming back to renewable power, I will say that CA has already given a report on transmission that to penetrate 500 gigawatt by 2030, a CapEx of almost about INR 2.4 trillion will be required and which means almost an addition of more than 4 lakh in the transforming capacity and about 51,000 circuit kilometer of lines. And simultaneously with these investments, the interregional transfer power capacity will also get enhanced under ISTS mode to no less than 100 gigawatt by 2030. Thus, power grid sees a large addressable market and our estimate is they have already announced a CapEx of INR 1.71 lakh crores up to 2030 and almost about INR 2.5 lakh crore by 2032. And we expect and they have announced the revival of CapEx to 20,000 for current year and 25,000 for the next year. So next 2 years, this is the target of power grid. This makes us optimistic, pickup in power grids CapEx, asset capitalization, which again means a sizable opportunity for Techno. I'm happy to share with you that even today, just in our bag, we have 1 -- we have placed L1 in a transmission concession at Ladakh for [ milling dot ] project, value about INR 170 crores. So all this means even in conventional thermal power plants where your company has been playing -- played a significant role in setting up no less than half the conventional power capacity in the country over the last 4 decades, this also means an opportunity to us as a balance of plant or switch yards in the country. On the distribution side under RDSS scheme, a lot is happening now, apart from smart metering, a lot of digitization and -- of the networks is happening. We are already doing digitization of the distribution network of BVC in their command area in Jharkhand and West Bengal. So these distribution networks in the coming days are going to become more smarter and intelligent and obviously, they can be remotely controlled and consumer will stand served like telecom. Apart from these, we will definitely need some supportive areas, which will come in the future, like battery storage solutions or pumping storage solutions and also, I will say, deployment of Statcoms and HVDC solutions and your company is qualified and competent to provide all these solutions in this space because we have the presence in the power space only. The FGD segment is also we see the momentum is back. We are finding a lot of traction from the SCBs now to set up FGD plants in their ongoing thermal power plants, still almost about 125 gigawatt is yet to be fitted with FGD, which mainly comprised of leftover works of CPSUs, but mainly of SMEs and private sector. And total CapEx involved is no less than INR 1 lakh crore in this area. The transmission segment, again, the TBCB bidding is happening strongly and almost about INR 40,000 crores of bids are already in the bidding process, and we are supporting different bidders. On the station side, we have already won transmission assets, transmission station work of INR 4,300 crores in the last year. And we also won 2 TBCB orders, as mentioned earlier, with the revenue entitlement of INR 2,800 crores. Similarly, Metering segment, we are already doing 3 million meters for the order value of INR 3,500 crores in the states of J&K, Tripura, Jharkhand and MP at Indore city. And we are also now L1 in Punjab to do again a high-end meeting work of the feeders, which is only about 1.86 lakh for almost the order value of INR 666 crores. So similarly on data center side, I will say that we have reached only one concession from rail spend where we'll be setting up 100-plus edge data centers on the very prominent all railway stations of the Indian Railways under digitization plan of the railway in partnership with RailTel. We anticipate this to be a very huge opportunity as -- to begin with as a value accretive and later on as a business. Similarly, in data centers, also, we will say that a lot of scope is growing with every passing day, and we expect that almost the capacity of data centers will be about no less than 1.5 gigawatt by 2025. And this is likely to be about 5 gigawatts by 2030, I would say, so which is a huge business potential again. We have been allotted land after -- in Kolkata to set up a data center next to the various data centers being set up by STT and Reliance as well as AdaniConneX, I would say. The market size in this in terms of revenue is likely to be no less than $5 billion by 2030 year-on-year. The growth drivers of data center, you all know is basically out of the cloud services, which have become a way of life in efficiency and cost economy, also the policy of government on PDP data privatization, data localization and so much of digitization and phenomenal digitization, which has happened in the country over the last 4 years post COVID, we are next to no other country in the world now in this space, whether they are DBT or payment vehicles or e-commerce or IoT or OTT or ISP services, almost 800 million people are ISP now, even in the rural areas. So all this means a lot and additionally, this sector is also now usually charged by AI, artificial intelligence, which means, again, I see going forward, gigawatt scale data digital data centers happening in the country, just like transmission station. Probably 10 years back, none could have visualized such stations with a capacity of 10 gigawatt to 25 gigawatt each, which is becoming an order of the day now. So all this means use opportunities for your company, I will say that our data center is likely to be ready by September '25 in Chennai, and we see a lot of interest in this, and we have spent by now about INR 300 crores in this facility, I will say. Another good thing which has happened that whatever assets we had created over the last 15 years now stands monetized successfully in last 4 to 5 years, and we process no asset on hand today other than the data center under construction. Our own assets in renewable power, transmission assets, under PPP model or under [ TPG ] model, all stands monetized. This has resulted in a strong balance sheet, very strong balance sheet with a cash surplus of INR 1,500 crores in the books of the company and is available for our next phase of growth and deployment for all these opportunities. During the -- again, I would like to repeat that during the last year, I had mentioned that morning has begun. And this is only the first shine of the sun, which will keep brightening with every passing year. We are confident to achieve a revenue of INR 2,500 crores for the current year and another similar growth of growth to 2035, INR 100 crores for the next year or more. The EPS will be INR 35 for current year and INR 50 plus for the next year, ending with March 2026. With this, I will now invite your participation and anything you want to know more about us, you are welcome.

[Operator Instructions] The first question is from the line of Madhu Kela from MK Ventures.

And first of all, congratulations from my side more importantly, holding the company together in most difficult times. I think you are one of the few people.

Sorry to interrupt you sir. I request you to use the handset, please.

I said you are one of the few people I know in the power sector who have generated real positive cash flow in such a trouble time in the last 20, 30 years of the sector. So image of our company, Gupta-ji, is generally that we are conservative. And my fear is not on the opportunity. My fear is more on the how well the company is prepared to capture this opportunity, and it will benefit a lot if you can elaborate, you said that what we can achieve in the next 2 years, but if you can elaborate what the possibility and aspiration of the company is over the next 5 -- 4, 5 years, I think that will serve a lot of purpose. According to me, this company has a potential to even do a INR 10,000 crores top line if we take a 5-year view. So would you concur with that? And are we even aspiring to achieve something like that?

Your question is very inspirational and soul searching, I would say. Definitely, in my lifetime, I have been conservative and I trust this has rewarded the company. And now the timings of growth keeping behind any of the challenges on, I will say, the geopolitics or the very impact in the country, I fully agree with you that Techno can do INR 10,000 crores by 2030 without any doubt. And it is doubling year-on-year. This year, it is almost double of last year, and next year, again, it will be no less than 70%, 80% of this year and the growth will go on like this. I'm very sure, sir, that we'll be able to meet the expectation of the investor community, but we have to evolve. Can you hear me, sir?

Yes, I can hear you. I can hear you. I can hear you.

Company has to evolve and transform itself, which we are doing it. We have set up an office in Delhi, and we are now doubling or rather, I will say, tripling the size of the office in Delhi sir. It is a part of our own complex where Tata [ partner are also ] our tenants in Gurgaon. We have taken a full flow of 6 floors of the building. It is under furnishing. A lot of people are under recruitment on the IT side, data center side as well as on the transmission, smart metering. We are very focused on IT layered power solutions and we believe that is a future of power. And it is more rewarding than pure commodity solutions in power sector. So I can assure you that we will rise to achieve that project by if not '28, at least by 2020.

I have a few more questions, if you don't mind, I can carry on. One is that you -- we already have INR 1,500 crores of cash. You said that we will raise INR 1,250 crores by way of QIP that makes it INR 2,750 crores, plus the profit of over the next 3 years plus the monetization of the data center, which you had already alluded to, so this will be a lot of cash, roughly INR 5,000 crores or more based on my 360-degree calculation. So if you can elaborate as to where are we planning to use this cash. And knowing you, I'm sure you have never been in a capital intensive mode. So wherever we use this cash, when -- how this cash will come back and what kind of threshold IRR, we are looking at while we are investing this cash.

Sir, you want to know my business secrets.

No, no Gupta-ji, that is important for a shareholder like us, we only get this chance once in a quarter.

What we see in the market of investments that generally an investor always looks for phenomenal returns in India while deploying funds when project is in a buildup, construction stage, deployment stage. They don't trust our type of firms to do jobs in time, quality jobs in time, create sustainable value accretive assets. So all these challenges makes them expect 16%, 18% returns on whatever money they invest. My takeaway has always been that Techno good in it. We have successfully done it. We have delivered more than 400 projects in the past. So there is no reason to add money from any of these investors while deploying the assets, whether it is smart meter, it data centers or even TBCB projects or any other project of a large value we may like to take tomorrow, [ invest or TSO ] or any other emerging solutions, you see. So my takeaway is that I must be sufficiently funded where I build these assets out of my own farms and then monetize when they are revenue-accretive, not when they are in that CapEx mode. Once it is ready for OpEx solution, we are there with them. And then the investor is ready to be part of us at 10%, 12% also. So that delta of 5% I want my investors to earn along with us as a financial reward which we have done, like we created assets in transmission, renewable power in the last 10, 15 years worth about INR 4,000 crores. And we made a capital gain of no less than, I will say, about INR 750 crores in parting those assets, all at a gain. If equity deployed was in those assets was almost about, say, INR 1,500 crores, we received 1.5x on those assets. So same strategy we want to deploy here. You make EPC margin while deploying the asset. And after that, I said is revenue accretive bringing an investor and part of it. So that this INR 5,000 crores remains a critical investment all the time with the company. We are -- going forward, we are able to sustain even any odd happening in the market. Many infra companies in last 10 years failed because a lot of counter-party commitments were not kept by them. The biggest. [Audio Gap] Being a company called ILFS, so us and still so big a failure in the market only because of the counter-party risk. So it is always a good idea that when you build these kind of CapEx, you must have another amount in the pocket to sustain it for a year or more, even if anything goes wrong. So all these considerations are behind us, I can say, while building on it, a financial model like this.

My last question is, while financially, we are prepared to really capture this opportunity and I trust you, can you elaborate a little bit more on the mine power requirement, what kind of people will require to execute and make this company go to INR 10,000 crores in the next 4, 5 years. And what are the real biggest challenges, which could come in our way to achieve this objective?

I will only say that the challenge is always learning and remained ahead of learning as a requirement of the very solution. And that is why we always remained in a power vertical, not as an element, but as a 360-degree presence in this sector. We understand this sector as a very electricity act, very regulatory ones, very large of the programs of the government of India and its achievements and as well as our participation in this sector, that most large players in this sector today say that Techno can do what they are capable of doing. And also, we are serving them additionally, I would say. But where we are differentiating over other peers by going beyond power into power complete solutions like data. I believe society will depend on 2 things going forward, sir. One is a data and other is energy. Like if you read the statement of Tesla's chairman, he has already said, "I can create as many data centers catering AI solutions as possible, but I don't believe energy will be available, pipeline to energy will be available." So this is where Techno wins over many others that I can. [Audio Gap] Solutions as well as provide energy to them both. And India is globally competitive today in energy. The energy if you look on Singapore, if you look upon Europe, you look on America, nowhere this energy today is less than 12 to 26. Whereas in India, we can provide at the excesses even today in these applications. So gradually what we will realize the importance of location as India, just more of our Indian capabilities, which all have served abroad successfully, but not in India, on Indian soil. That is where we want to blend with them, sir. And all this knowledge has to be part of Techno. I will like Ankit to elaborate on this. We have already done many recruitments. Ankit will elaborate that. Ankit, are you there?

Yes, I'm here.

Yes, can you elaborate what -- how you are going about recruitment and expanding daily [ as a wish ]?

Yes. Over the last 6 months, we've made a target to start recruiting leadership teams for different roles and responsibilities and addressing it more on a semi-vertical basis. So today, we largely define Techno into 4 verticals, 1 being obviously the TND, FGD, smart meter and data centers. And we've come to realize that each vertical has to have its own leadership team and its own -- each has to be kept as a business unit in itself and SBU per se. And that's how those recruitments have already started. So as we speak, we have already taken on board, Mr. James Trout from U.S., who was the founder of Vantage Data Center core site. Both the companies today being close to $15 billion each. And he was the founder who exited to Silver Lake Capital. He was also the founder of the largest DC operator -- data center operator in the world today, which is Digital Realty. He was a founding member of that group. So he's onboarded now on the Board to guide us developing largely the marketing, sales and operations team. And we started engaging with those deals in U.S. So we are trying to create a team in U.S. itself to work closely with these hyperscalers like Amazon, Google and others where the design decisions take place. Execution may happen through APAC, India, but the larger design decisions happen over there, and we want to start influencing those. Similarly, we are starting to create a business -- we are exploring to engage a business unit head for data centers, along with a very, very large sales team. For the reason that changed the strategy and going forward, we've engaged with -- we are trying to bring a good finance and accounts team also for the entire group.

Included in that, in regards to Mr. Mishra, you can highlight on the renewable side.

Yes. And on the renewables, we've also engaged with Mr. Shailesh Mishra, who was Director of Technical and Solar Energy Corporation of India, he's full time with us now. And his guidance and his visions on what renewable energy or power sector will look for tomorrow or look like tomorrow, we have already started working on that. So yes, we are becoming a little more conscious on developing top management and leadership roles are being defined, and we are aggressively looking for this year, especially we'll be concentrating on developing those things. Especially for IT, we have picked up someone from picked up someone from a PSU who was heading -- who was the Chief Technology Officer over there. We thought that PSU engagement would be the best because given Techno's relationship with customers also around PSUs and CPS, we saw that culture fit is good. We picked up someone from E&Y for heading our finance accounts and strategic planning and other things and audit. So she will also be joining very soon.

I really, really appreciate giving you an opportunity, wishing you all the very best I. wish that you create the most respected and the most valuable company out of this sector considering the opportunity which is there in front of us over the next 4, 5 years. All the best.

The next question is from the line of Venkat Subramanian from Organic Capital.

Most of my questions have been answered. If you recall, over the last couple of calls, I have always been asking about how we are going to import ourselves with -- on the people side. So some of Ankit's answers are pretty useful. From whatever, I can see we have now clearly transcended to be a technology provider than just be a contractual obligation provider. Given this growth just now, are we getting paid sufficiently? In some of the segments, we probably should get much better margins. So are you seeing those opportunities? And if you do in which areas are they?

Absolutely, Venkat. That's why I used the word this. This is a paradigm shift for Techno now that we are no more rubbing shoulders with our conventional players limited to conventional solutions in all low end or mid-end, all this sector is now having opportunities as a, I call it, videocracy to technocracy or high-end complex solutions. And definitely, they have rewards in it. And we are definitely built for it. We definitely look forward to enhancing our rewards to more than 15% going forward over next 2, 3 years. And even what Madhu-ji had asked, I will say, the IRR looked upon by us will not be less than 18% to 20% on all these investments put together.

That is lovely to hear. We have always known you to be ultra-conservative and I've never seen you this excited. We can now clearly see very, very exciting times coming ahead, best wishes Gupta-ji, looking forward.

For 8 years, this sector has only suffered, suffered and suffered, but what could we have done better? Anybody going aggressively in those times would have bought itself. I can assure you. Today is the time to benefit now. We have cash. We have a strong balance sheet. We have good credentials, and we have good knowledge to -- and cash going forward opportunities. I can assure you, Venkat, tomorrow is day for us.

The next question is from the line of Mohit Kumar from ICICI Securities.

Congratulations on a good set of numbers, sir. A few questions from my side. First is, what is the current order book and L1 position? And can you break up the order book into generation, transmission, distribution, data center?

Yes. No issue, sir. We have a total order book of about INR 9,200 crores as of now unexecuted and we are almost INR 1,050 crores in L1 position as of now, not March, as of now, I would like to use. Out of this, I will say that about INR 5,000 crores is in transmission which includes about TBCB transmission assets of all-in, about INR 3,000 crores, and TBCB won by private players and Techno is about INR 1,500 crores put together. FGD is about INR 1,300 crores impact, that is a power plant generation side. In distribution, if you -- without smart meter, I would say that we have business worth about INR 350 crores now, not INR 350 crores, about INR 400 crores, you can say, including infra. And that smart meter, we have worth about INR 3,000 crores to INR 3,500 crores already with us and data center, of course, we are not able to place a value on this concept of 5G data center. It can be a total game changer for the company going forward, but I can say minimal over next 4 years, it will be at least INR 1,000 crores even if I take INR 10 crores per location in other division sets.

Sir, is it right to say that we have won around 100 data -- 100 edge data center? And you are saying that [ Techno per ] data center, right? That's why you're arriving at INR 1,000 crores.

Yes, yes, absolutely. We have partnership with RailTel on a concession of 20-year basis, and we will be deploying in all prominent places these data centers for them.

Understood, sir. My second question is the order inflow. So you gave a target of INR 5,000 crores. And if you look at all the underlying businesses, I think be it FGD, be it data center, be it smart meter or be it transmission. I think the opportunity size will only ramp up compared to last year, isn't it? Is it given the fact that all the Internet at least CTU and RA and PSC, done INR 47,000 crore worth of bidding last year.

Absolutely, right, sir. It is always more gratifying or satisfying you say INR 5,000 crores, achieve INR 8,000 crores, way around sir, and we will like -- look -- we like to pick and choose going forward now. That is our aim. This reward must be evaluated very properly, which we have done and we should be able to do a contract in time. So all these factors, we will keep in mind, sir. But you have a point, the opportunities are a lot bigger than what I have given you. Hopefully, I will beat my own number sir, and I am happy to do that.

Understood. Last question, do you intend to keep bidding for TBCB assets on our own balance sheet? Or do you that the 2 which you want is enough for now?

Can you repeat your question, sir?

Do you intend to keep bidding for new TBCB assets on our own balance sheet?

Yes, we are doing it sir. Absolutely.

You want to - -last year, but you want to do more given the TBCB pipeline is humongous this year, right?

Sir, but we don't want to aim at each concession CapEx or more than INR 500 crores, INR 600 crores. On an average, we want to be in a low CapEx solutions so that IRR available to us is larger than what is available in competition to giants like Power Grid and Adani or others. So we want to be in a safe havens.

The next question is from the line of Abhishek from Nareli Investments.

Sir, my first question, what is CapEx stand for our entire company and especially for Smart Meter and Transmission segment for next 2 years?

Sir, already, I've stated it will be in total, you can take almost about INR 5,000 crores for 2 years, INR 2,500 crores each year.

Okay. And second question regarding Smart Meter, it is perspective cash consuming business before the Smart Meter delivered today and you received money in 93 months, 93 months, sir. Can you rethink this business model because it is a heavily cash consuming business?

See, there is a period to deploy meters, all meters are not to be deployed on the [ general ] gauge, sir. What the system means that you have to deploy it in 27 months, and the first lot of 5% must be achieved first 6 months thereafter 5% every. [Audio Gap] That is the model, sir. So from seventh month itself to the [PFC] part of everything happens after 27 months. So you have a progressive completion, progressive revenue accretion [ is invested and register ]. Can you hear me now, sir?

Yes, yes.

Yes, some disturbance was coming here. So in short, there is a revenue accretion from 7 to 27 months also. All is not happening after close of the scheme. That is a duty part of it, number one. And number two, you see if we like it between, we can always discount or scrutinize our bills with RDC PFC under the very scheme. And they are very eager to build up their books, if we like post revenue attrition. What I have said is that the CapEx we want to do out of our books, but once a meter or a lot of meter is ready for OpEx, we can always monetize it, partially also progressively also and completely also as SPV. So all those choices are on our table.

So going forward, we bid INR [ 2 ] million smart meter annually?

No, sir, monthly. We have a DDF -- there is DDF facility. They call it direct debit facility in the program, sir. The agreement with a banker itself of the utility. Banker is a party to it. He gives -- he is supposed to debit the [ amount ] collected month-on-month from the consumers, so he has to debit. [Audio Gap] as the obligation. So the mechanism is healthy, and we hope that there is no abuse to it.

Okay. And sir, last question, how much CapEx -- so much capacity you are planning. So why you give such a handsome dividend, you must keep the money for long growth of the company?

We have been always rewarding our investors and still keeping a fiscal discipline. We are totally a debt-free company. We ourselves have a cash of INR 1,500 crores, so paying a dividend, I think my investor deserves a dividend payout of at least, as a dividend payout policy of the company, which is 25% of the bottom line. So we are honoring the dividend policy of the company.

It goes one side you pay dividend and other side, you raise money from QIP. It is good.

It is good for the investor, sir. QIP gives you the value accretion to the stock and dividend gives you the cash. I think every investor looks for that, sir.

[Operator Instructions] The next question is from the line of Dhiral from PhillipCapital.

Congratulations for the great set of numbers. Sir, you talked about INR 5,000 crores the CapEx for next 2 years. So if you can bifurcate where this amount will be utilized for which segment?

Sir, at the moment, you can take it about 25% into data center and 25% into your TBCB another, 50% into smart metering.

Okay. And sir, any time line by which you want to raise QIP? And when can you raise the fund?

We'll complete it by September of this year.