Techno Electric & Engineering Company Limited ($TECHNOE)

Ladies and gentlemen, good day, and welcome to the Techno Electric & Engineering Company Limited Q4 and FY '26 Earnings Conference Call hosted by Asian Market Securities. [Operator Instructions] Please note this conference call is being recorded. I now hand the conference over to Mr. Vidit Trivedi from Asian Market Securities. Thank you, and over to you, sir.

Good afternoon, everyone. On behalf of Asian Market Securities, we welcome you to the 4Q FY '26 Earnings Conference Call of Techno Electric & Engineering Company Limited. We have with us today P.P. Guptaji, Chairman and Managing Director; Mr. Ankit Saraiya, Director and CEO, representing the company; Shivani Chandok, VP, Strategic Initiative and Investor Relations; and Mr. Amit Agarwal, President, Data Center. I request P.P. Guptaji to take us through an overview of the quarterly and yearly results, and then we'll begin the Q&A session. Over to you, sir. Thank you.

Thank you, Vidit. Very good afternoon, ladies and gentlemen, and thank you for joining us to discuss Techno Electric & Engineering Company Limited financial results for the Q4 and the full year ended 31st March 2026. Before I begin, a quick note on forward-looking statements. Anything we say today about the future should be read along with the usual risks and uncertainties that affect our industry sector and in turn our company. Let me begin with the key highlights in financial year '26. We continued our trajectory of delivering all-time high revenues for the company. We executed with discipline across all our business segments, delivered resilient operational and financial performance and are entering the new fiscal year from a position of strength. Two structural trends gives us strong confidence as we look ahead. First, the union budget continued support through cloud and digital infrastructure is a significant positive for data center business. Second, India's transmission sector continues to present a strong multiyear growth opportunity, and we believe we are well positioned to participate in this expansion as a key entity in this segment. [indiscernible] ecosystem. This is creating new [indiscernible] alignment between the operating environment driven by global wars and supply chain disruption have added some cost pressure in the near term. And we expect this may continue to impact the next few quarters as well unless resolved as promised in near future. The company is geared up for the same. We are actively managing costs, optimizing our procurement and staying disciplined in execution. We are confident that as these external factors normalize, our margins will steadily move back to the structural levels still have not changed, disciplined execution, efficient use of capital and long-term value for the share. Our transmission and distribution first take up business segment-wise. First is the T&D business. Our transmission and distribution business continues to demonstrate strong momentum. India's energy demand is rising rapidly driven by industrial expansion, the growing scale of our data centers and the [indiscernible] power demand increases, the need for robust transmission infrastructure becomes inevitable, and this is precisely where we are strategically positioned. We are witnessing a steady pipeline of opportunities across [indiscernible] corridors as the country continues to strengthen and expand its energy backbone. Our unexecuted order book as on 31st March 2026 stands at almost INR 9,600 crores. We have secured fresh orders after March '26 for about INR 386 crores interest order this marks a significant milestone in our smart grid journey. It reinforces our capability to deliver generation infrastructure aligned with the evolving needs of the power sector. This reflects not only the strength of the identified market opportunities but also our disciplined approach to growth remaining selective in bidding maintaining strong execution practices standards and staying focused on prudent risk management. Market outlook India's power story is unfolding faster than anyone projected. Over the last 4 to 5 years, India's power sector has undergone a significant transformation characterized by rapid capacity expansion, accelerated renewable energy deployment get modernization at major policy reforms. The sector has moved steadily towards greener energy while simultaneously ensuring the liability and [indiscernible] rising electricity demand, driven by economic growth, organization and digitization apart from electrification. As for the long-term national resource adequacy plan of March 2046, the peak demand in financial year '25 stood at 250 megawatts, up from 190 gigawatt [indiscernible] financial year '21 and by January '26 before somebody even began, we already had touched 245 gigawatt. The summer [indiscernible] all-time peak of 271 gigawatt on May 21, 2026. As the CF projects departed [indiscernible] at 495 gigawatt by financial year '25 nearly doubling within decade. To meet this, India must build [indiscernible] gigawatt generation portfolio by financial year '25,'26 from about 520 gigawatt today and largely through renewable sources. By financial year '26, 70% of India's installed capacity will be nonfossil 52% today. But as you are aware, none of the generation which is without [indiscernible] demand continues to grow at an estimated [indiscernible] CAGR through 2030, pressure on India's transmission network is expected to sign capacity is about building a transmission infrastructure capable of evacuating and delivering renewable energy efficiently across the country. This becomes particularly important as renewable energy capacity continues to export in states such as Rajasthan, Gujarat, Tamil Nadu, Andhra Pradesh and Karnataka, while demand centers remain geographically disbursed in this context. HVDC transmission is emerging as a critical technology for long distance renewable power evacuation with lower transmission losses and hybrid efficiency. According to [indiscernible] India's HVDC market is projected to grow from [indiscernible] as per CH transmission plan, we had financial year '27 at financial year '26, [indiscernible] of new lines. And [indiscernible] capacity through new stations will happen which we call a daily investment of almost INR 8 lakh crore approximately or U.S. novelty [indiscernible] Techno Electric & Engineering Company remains deeply aligned [indiscernible] the GG transition. Our expertise at 765 kV areas execution [indiscernible] voltage class in India, [indiscernible] precisely what this transition requires every solar park in equity in the aggregate corridor in the very top storage projected all through high [indiscernible] substations. And just to provide in last 3 decades, this country has, say, around 510 stations or 400 kV and above out of that, no less than 350 are built by [indiscernible]. So at [indiscernible], we are delivering more than [indiscernible] out of that [indiscernible] the country. We have capability, we have a track record, and we have a decade of [indiscernible] investment certainly behind us. Now I hand over to Mr. Ankit Saraiya for better [indiscernible] business update.

Thank you. Let me now take you through our data center industry outlook as well as business vertical, which is a transformative chapter for Techno Electric, India's data center industry has clearly moved from potential to execution at scale. As for Mapi, the total data center capacity in the country has increased from about 75-megawatt in 2020 to around 1,500 megawatts by 2025. While by conservative estimates, the industry is expected to grow to 4.5 gigawatt by 2030. As per many sector reports, the capacity may as well jump to 8 gigawatt, driven by the surge in data consumption, rapid cloud adoption regulatory data localization rules and the increasing use of artificial intelligence. The expansion will require an investment of more than $30 million driven by massive investment in digital infrastructure and GPUs. The union policy is also providing strong structural support to the industry. The Union Budget '26, '27 introduced a tax holiday until 2047 for eligible foreign cloud service providers operating through Indian India-based data center infrastructure, move experts estimates could unlock almost about $100 billion in investments, significantly strengthening India's position as a global cloud and AI infrastructure hub. In this environment, our differentiation is clearly powered as the AI workloads and high-density computing pusher power requirement, the industry's biggest constraint is increasingly reliable power infrastructure and ability to execute it. Given a track record and heritage in transmission and mission-critical electrical systems, we believe we are well positioned to capture the next phase of growth in India's data center industry. Some key operational highlights around the data center business, starting with our data center at [indiscernible] it became operational around September 2025. And just to give a basic idea about Chennai itself, the Chennai micro market has historically trailed Bombay, reflecting the limited presence of hyperscalers and BFSI customers. the 2 segments that drive the bulk of data center absorption, especially today in India and Bombay. That said, Chennai has consistently seen steady demand from its large industrial base and IT sector, and it remains strategically important destination as it's the only other city besides Bombay elected to multiple submarine landing stations. The Chennai market currently has 6 to 7 operators, including Singapore Telecom, Nxtra, Adani Connect, SIFI, Equinix, NTT and digital connection, which is a JV between digital reality, Reliance and Brookfield. And amongst all these players, Techno Digital, we are the newest entrant and just in operations for the last 6 months. And with no prior presence in this segment, we have already tied up 0.5 megawatt of capacity. We have active pipeline discussions for over 2 megawatts of capacity with enterprise customers and cloud operators. But we must recognize that establishing ourselves in this kind of competitive landscape with such large organizations. It will take time. But we remain confident that we'll be able to lease out the entire commission capacity within this financial year. Looking ahead, the market is seeing growing in [indiscernible] and market is seeing growing interest from global players. MMA's proximity to Singapore, access to multiple subsea cable landing stations and competitive power cost along with availability of renewable energy, positions it as a critical gateway for international connectivity evolving geopolitical dynamics in the Gulf are also reinforcing the case for network diversification and alternate routings beyond the Arabian corridor. And the demand rising out of these global factors tend to be available in near term and but in large in size, requiring immediate capacity. And therefore, we may as well plan for a Phase II expansion, ensuring that we have large capacity available for such requirements, which can be met on an immediate basis. The time becomes [indiscernible] in delivering these capacities, especially of demands coming out of such evolving structures? The first edge data center that came online was down under partnership with Railtel, which commenced operation in August 2025. and we have fully subscribed in [indiscernible]. Customer billing started in September 2025 and contributes today almost a little above INR 2 crores of annual revenue. The facility in Gorgon provides colocation and cloud services to marquee clients across government and public sector utilities, and it is currently delivering on positive operating margin. Our second etch data center went live in May 2026, and we today have active fund of prospective customers across government and private enterprises, especially BFSI segment. and we are close to filling out the entire capacity and customer onboarding will commence soon as our network services become operational within Bombay edge data center. In addition, we plan to expand our edge data center footprint in indoor, Lana, Chandiga, Visa, Prayagraj, with construction commencing at least 2 to 3 of these locations within this year. To roll out under the rental contract for edge data centers, has been slower than anticipated, owing to land acquisition challenges at Railtel, but once the land is handed over to us, we will deliver these edge data centers within a year at each of these locations. This is a 20-, 25-year-old 25-year long contract. And within that period, we are confident of delivering multiple edge data centers across the country. Our Noida data center is on track, which has also been instructed in partnership with [indiscernible] first phase or you can actually [indiscernible] will be commissioned by June 2026. And we are already seeing strong demand, particularly from the government, and we expect that this half megawatt will be fully occupied by December '26. The construction of first phase, which is 5-megawatt is also on track and will be completed by May 2027. The Calcutta data center is under construction, and is progressing as planned and remains on schedule for commissioning by end of calendar year 2028 as our data center assets steadily move towards operations, we expect them to start contributing to our overall financials based on what we see today. and the customer discussions we are having, we target around INR 40 crores to INR 50 crores of revenue from data center business in financial year '27. The pace of ramp-up will depend on leasing closures customer onboarding in lines and market conditions, but the demand environment and the positioning of adds give us real confidence. We have also received a license from DoT to provide network services we expect to gradually ramp up this business to financial year '27. While on the business front, we have been moving increasingly towards digitization, including distribution through smart metering projects, Madrid and digital infrastructure. We are also undergoing a digital transformation within the organization, and it has become a core strategic priority for Techno Electric, and this is well beyond simply digitizing records. Our digital agenda is anchored around 2 clear objectives. First, achieving full organizational visibility to support both internal and external audit requirements. And second, to build a robust framework to identify and mitigate operational risks proactively. A central enabler of this has been our EBS Connect platform, which we have rolled out across the organization to embed data accuracy into the way we work. It captures and reports data in real time across all project sites and functions, significantly improving the quality, consistency and reliability of our financial and operational reporting. We have also meaningfully strengthened our underlying digital infrastructure during the year. The cumulative impact of these initiatives is tangible. We are seeing significant annual cost avoidance a more predictable order book to cash conversion cycle and measurable improvements in our operating cash flow outcomes, outcomes that reflect the real business value of our digital investments.

Thank you, sir. So now let me take you through the financial performance for Q4 and full year ended March 31, 2026. I'm pleased to share that Techno Electric has closed FY '26 on a strong note, demonstrating both revenue and sustained growth across our stand-alone and consolidated operations. Our results reflect the project ever nature of our business and the new set of seasonality of HCC. Historically, our performance has followed a 46 days split between the first and second half of the year. Before being the closing quarter has again contributed from these are full year numbers. On a stand-alone basis for the year, our revenues stand at INR 252 crores, demonstrating a growth of 35.42% over FY 2025. For the full year, our EBITDA reached INR 448 crores, giving a growth of 36.4% over FY '25. Our profit after tax for FY '26 stands at INR 57 crores, a robust growth of 34.8% over FY '25 reflecting strong operational leverage and capital efficiency underpinned by our debt-free philosophy. Our stand-alone APUs for FY '25, '26 stands at 46.6% compared to 37.6% in FY '24, '25, a growth of approximately 24% year-on-year. For the quarter, our revenue for Q4 is at INR 1,043 crores with a growth of 28.5% over Q4 FY '25, and EBITDA reached INR 132 crores, a growth of 28.6% over FY '25. On a consolidated basis, our full year results are as under. The consolidated revenue for FY '26 is at INR 250 crores, a growth of approximately 43.3% over FY '25. EBITDA grew to INR 462 crores with a growth of 36.13%. EBITDA margins remained healthy at 14.2%, although there was a slight decline as compared to the previous year. Consolidated profit after tax reached INR 449 crores, a growth of approximately 18.7% over FY '25. Our consolidated EPS for FY '25, '26 [indiscernible] INR 40.7 crores as compared to [indiscernible] in FY '24, a growth of approximately 10% year-on-year. On a quarterly basis, our revenue for Q4 is at INR 1,010 crores with a growth of 23.8% and EBITDA at INR 132 crores, a growth of 4.26%. The quarter was impacted by certain macroeconomic challenges, including supply chain structures due to the contract in PCC reset, which also led to high energy cost. As a result, our expected top line for the quarter was impacted and procurement costs also increased a bit in Q4. We believe that these are temporary and short-term challenges. While the company has continued to invest in digital transformation and capacity building, which is invaded in our OpEx cost, we believe that these are important foundation for long-term value creation for our stakeholders. With this, I now hand over to Mr. PPG to cover our [indiscernible] businesses and closing remarks.

Thank you, [indiscernible]. In Smart Meter as of March '26, we have already executed approximately 70% of our Smart Meter order book of about 2.24 million meters, up significantly from 50% at the end of quarter 3. Our current priority is clear, complete all ongoing projects on time and with full efficiency. Given the margin pressures we are observing in recent tenders, we have consciously adopted a selective and diet approach, we are focused on protecting tutor quality within our existing portfolio rather than eluting pursuing incremental volumes at the cost of beta. Progress remains healthy across all project sites. Our digital execution to label real-time monitoring, earlier dedication of bottlenecks and shift [indiscernible] ensuring we stay on track across geographies. Outside the [indiscernible], we are on track to include 100% of the spot projects at current financial year, we have 4 ongoing concessions while or [indiscernible] be completed within the way that [indiscernible] project will be completed in [indiscernible]. FGD over the last few months policy uncertainty have delays [indiscernible] had slowed down new LGD tenders. We are watching the mix closely and remain [indiscernible] to participate when that picks up. As the [indiscernible] execution is on track, and we expect it to complete it [indiscernible]. With this, we now put the house to question and answer.

[Operator Instructions] We will take the first question from the line of [indiscernible]

My first question is on the data center side. Management has built impressive brand visibility for Techno Digital on the platforms like [indiscernible] where we are showcasing the capabilities that appear eager to the industry PL side. But there seems to be a disconnect as this has not yet translated into the tangible top line growth or the improved consolidated EPS. In fact, if you look at the numbers, the gap between the annual on EPS and the consolidated EPS is getting wider than expected initially. So although in the opening remarks, you highlighted the [indiscernible] for it. But are we -- what are the specific go-to-mark hurdles which are causing these slower-than-expected utilization ramp-up in the data center business because as I remember, in an earlier call, we were targeting 100 [indiscernible] from data center. Now you mentioned [indiscernible] year. So what are the challenges are you facing here, and when can we expect a meaningful contribution to the bottom line? So that's my first question. .

So let me take that question. So firstly, we've been in operation with data center only for the last 6 months. Our commissioning of Chennai data center in all honesty happened in September with first clients moving in from October 2025 onwards. And within 6 months, we have seen a consumption of about 0.5 megawatt of capacity within Chennai. Now as I mentioned in the opening remarks as well, that we need to appreciate the fact that we are new to the industry, and we do not come with a background of even an IT ICS sector. for being data center. And with the competition landscape that we are dealing with, with most players well established over the last couple of decades and with large organizations such as Adani, Reliance, CIC, NTT, SDT,multinationals. We are still trying to find a foothold for our wholesales. In an industry like data center, which is largely mission-critical in nature, where it takes a lot of time to develop confidence with customers and industry at large. It is going to be a slow but a rewarding journey but a long journey as have mentioned earlier, with RailTel as a partner, it has helped us in achieving some putting much before than any other new entrant would have taken and therefore, we've seen absorption of capacity in Gerdau and Bombay faster than other locations. And Chennai being our first data center of being operated 100% of our own one can expect that we will take some time in this competitive land. Secondly, as also mentioned that selling micro market is quite different than micro markets we hear most about, which is Bombay with Chennai having limited presence of hyperscalers and BFSI segment, the absorption largely comes out of the industrial base within the city and out of the IT IPS sector within that city. The good part about Chennai is though that there's always a tricky demand in the industry. It may not be large, but there's always a constant demand which is available for us to fulfill, but it takes time to fill up capacities of the site. But because you are catering to more enterprise and retail customers in the city like [indiscernible] margins are superior than pulp customers which come out of hyperscale or PSS. So in all honesty, I would say we are still gaining ground in the industry. We are competing with large organizations have been established for decades in it. But the journey is solid. It will be rewarding, but it will take some time. And therefore, what we are seeing today will start improving from FY '27 and onwards.

Let me add more to it. You see from given background of Techno Electric, we are probably first to be in this space, number one. And secondly, I will say no industry, no expansion of high-tech deployment like this becomes profitable in the very first year. At least it takes 2 years to gain ground and be profitable and dividing. But I can assure you, by 3. Our takeaway is that the data center or digitization will become the face of this company and transmission will be the second side of the client, which is presently the face of the situation. And coming to the target, I will say this INR 100 crores or more we have never said [indiscernible], investors may have been anticipating now the capacity of 5 gigawatt can deliver that kind of rewards. But nevertheless, we are conscious of investor expected in this segment. And I can assure you, [indiscernible] we will outperform the industry like transmission. .

Understood, sir. And secondly, on our stand-alone business, we had targeted [indiscernible] are at 46.5%, which is a combination of commodity price headwind that we mentioned and [indiscernible] and apart from that, there is a significant spike in receivables benefit at [indiscernible] on our operating cash flow. So given this environment of persistent commodity inflation and current working capital sale, how confident is the management in scaling up the revenue target of [indiscernible]

Look, here, nobody anticipated comes -- so in the [indiscernible] now we are visible. So an has definitely shaved off INR 200 crores top line and as well as gas loan availability have increased costs of certain vital equipment in our sector maintains later. They have medium matters, commodity prices, all time. So macro is [indiscernible], as we said in the beginning, and you have to perform within the macro and micro opportunities as it happens. So I will say that a loss of INR 3 EPS is now great. It will definitely be made them going forward. But definitely, we stay committed an EPS of INR 75 by [indiscernible] as we have always with minded at the current year will be at around INR 60. It will be better than this year, much better than this year because we have we're changing our product mix station mark, which is focused more on I component than on AIS. But let's hope [indiscernible] as the impact to only large [indiscernible] and not beyond. So that's what we can issue. But otherwise, India is very bookable as you all know, to the fuel cost effect optimal cost and the impact on interest rates emerging out of [indiscernible] and already under pressure that will also add to the cost of the equipment, having started in [indiscernible] so these challenges are on the table of the sector, which will also be impacting us a bit. But I can assure you, all the cities in this segment, we will be the least impacted.

Just a clarification, sir. I think earlier, 75% was a target for [indiscernible]

No. You see, we were expecting -- even today, you may achieve more than 60 also, but we are factoring this mark number 1. And secondly, certain bottom lines were to happen out of the [indiscernible] exits of our Smart Meter projects happening, which leads or in which in foreign funds flowing out of the country, they impact that. So we want to be [indiscernible] with we convey it. And if that happens, that will definitely add another INR 10 to the bottom line if we are able to take it out of our ideas. There are [indiscernible] in that [indiscernible] that had to be part of our operations. So it's how it evolves going forward. .

[Operator Instructions] We will take the next question from the line of [indiscernible]

Sir, for FY '27, what is the top line target?

[indiscernible]

INR 1,000 crores [indiscernible] and what is the EBITDA margin [indiscernible]?

EBITDA margin, you take around 13% [indiscernible] impact large port than H1. But certain cost impact will continue to be there. The oil prices are not going to roll that is quite far being not [indiscernible] some cost effect will continue in H2 also. But still, we should be able to have 13%.

We will take the next question from the line of Ravi Naredi from Naredi Investment. We have the next question from the line of [indiscernible] from JM Financial.

Noncurrent investments have jumped from INR 648 crores to INR 1,316 crores in FY '26. So what will be the breakup among smart meter and data centers? And what do we plan to invest in FY '27 and '28 in both the businesses?

In data center, we intend to invest in [indiscernible] during the current year at 250 and 650 CRH Smart Meters. But the CapEx outflow will be [indiscernible] will be self-funded. That is with generation as internal accruals from that business segment. But what you see basically as a CWIP, the major difference has happened because we are executing to EPC contracts rather in joint development, along with [indiscernible] gas. There Ishana project will be completed by [indiscernible], they go up to the shopper because of the delay in the acquisition of the [indiscernible] so those deployment of funds have created contract assets, which will no longer be visible in the current year closing. So that is the only impact. Out of this, you can take for these 2 projects alone the contract work in progress is almost about [indiscernible] of these 2 projects. So if you minus that, you will find that it is at par with last year. .

[indiscernible] crore number, [indiscernible] is data center and smart meters?

In smart meters, our investment today is about INR 500 crores already up at INR 250 crores this year, INR 750 crores total [indiscernible] data center, we have invested about INR 600 crores by now and further INR 1,000 crores during the [indiscernible]. .

We will take the next question from the line of Pankaj from Axis Capital.

When do we see the P&L, but I have some questions on the balance sheet side. Question number one, which is one of the emphasis on the metal, which has been highlighted by auditors also, and this is regarding the receivables from 3 large partners, the old outstanding some amounting to some INR 88-odd crores. And I think management is of the opinion that no impairment is required for that. So I request you to put a color on that because considering the last pad we did in FY '26, the amount is fairly, fairly meaningful. So that is one. Second, I think on -- again, on the receivable side, the receivables actually have increased a lot. So is there some reason? I mean, is there some rationalization we are actually looking forward to in terms of collection of money from these at receivables. Last question on the working capital side is on the other current assets. So there is a meaningful increase, again from INR 8.7-odd crores to INR 160-plus odd crores in FY '26 from last year and I'm talking about the consolidated numbers. So what is the breakup of this meaningful increase, sir?

Simple issues. Firstly, coming to the book debt. This is the first year when book debts have been considered along with the retention on money receivable. Earlier, we were giving this in 2 parts: receivables and retention body. If you look separately, the receivable is INR 950 crores another INR 240 crores INR 250 crores [indiscernible] which is unbid, you can take it. And definitely, in Q4, you see our turnover is almost 1/3 of the top line. So it skews the book that size of March closing, which comes down like in [indiscernible] we have almost collected [indiscernible] out of this INR 950 crores also. . So if you look at our type of funds, we are lowest in book test by September and highest buy March end, number one. But it is generally not more than 2 to 2.5 month cycle, which generally anybody takes to process, including project time of [indiscernible] reaching sizes documenting approvals and payments. Coming to your INR 88 crores issue, let me say this is a contract we had in [indiscernible], which was due to political reasons was suspected 4 years back. Now Europe have taken responsibility. ADV, the letter has take up responsibility to pay out the executed till [indiscernible], the day of close out of the previous comment at that time. I can only say with satisfaction that all of our bids have been approved. Now they are about 8 million plus. They have been set to the ADB for payback and we are very hopeful to get it by Q1 and for maybe Q2 as [indiscernible]. But in our books, this outstanding is now more than I will again say 50 to 55 [indiscernible] and not -- but [indiscernible] have to receive today, that rupee depreciation has definitely in rewarding per watt. And number two, simultaneously, we do all retention money payable to our suppliers also against the very outstanding year. That also is also is about another 20-year results. So that impact [indiscernible] the books of the company.

Sir, can you be able to -- will you be able to adjust this the retention, which you have kind of hold for the creditors against the receivables we have on the [indiscernible]

Absolutely, that is back to [indiscernible] .

We will take the next question from the line of [ Aniket Madwani ] from [indiscernible]

So I just wanted to understand the impact of the [indiscernible] you mentioned that it's impacted around 200 top line and the margins in this quarter. So could you just touch upon them the exact reason, I mean were you not able to exhibit those INR 200 crores worth of orders or -- so how does it really impacted your top line and deal margin? And secondly, in this situation now carries forward -- I mean, let's say it goes on, where do you look at the terms of top line and the bottom line for FY '27?

You see, coming to the INR 200 crore erosion for the supply is basically dependent on gas. The gas got most effected after this Middle East was and the industries could not supply the material or could not produce the materials. They are capacity utilization and has come down to more or less than 50%. That's what I will say. So the materials could not be made ready by our equated suppliers like API or like GE, they could not get insulators there such years, [indiscernible] by ESV category, like 765. So those impacted us, and it continues to affect even now, number one. Number two, in the current year, we have already said our top line is about INR 4,000 crores and EPS of INR 60.

And so 3 months...

Next year, again, I will say '28, we will be definitely giving you [indiscernible]

EPS of 85.

75 [indiscernible]

[indiscernible] '27 will be around [indiscernible]

[indiscernible]

We will take the next question from the line of [indiscernible] an Individual Investor.

My first question would be around -- I want to ask a year-wise road map for the data center business over FY [indiscernible] and how much capacity is expected to go live each year across Chennai, Noida [indiscernible] and other as data center? .

Yes, Ankit, will you address this? .

Yes. So we are already, as I mentioned, we are live in Chennai with 5.6 megawatts. And hopefully, by end of calendar year '27, we should have another phase of Chennai commission. If we are able to onboard customers for the initial capacity of 5.6 megawatts, which is already commissioned. So maybe by December '27, we'll have another 5-megawatt commission. And meanwhile, by May '27, we'll have the first 5-megawatt in Noida commission. And by then, we should have at least a couple of more edge data centers of at least 0.5 megawatt each commissioned apart from the one which we have in [indiscernible] and Bombay. So this brings our total commission capacity. By December '27, you should have a commission capacity of about 15 to 20 megawatts expandable to this 20-megawatt odd capacity will be expandable to another 35, 40 megawatts on an immediate basis. because the common infrastructure would have been developed for all these data centers. So 20-megawatt is actual life capacity, expandable to 40 megawatts, and that should be the target for December '27.

That was fairly detailed. And I just want to have a follow-up question on the [indiscernible] should we think about the utilization ramp post the commissioning?

Come again, I couldn't hear you.

So my question is a follow-up question on the same. How would -- how should we think about the utilization ramp up post commissioning of these data centers?

To reconsider that [indiscernible] the commissioning of capacity can take about 12 months to reach occupancy levels of close to around 75% to 80% which is quite ideal to begin CapEx for the next phase of the same project.

We will take the next question from the line of [indiscernible] We have the next question from the line of [indiscernible]

Sir, all my questions have been answered.

We will take the next question from the line of [indiscernible], an individual investor.

So is there any possible collaboration with the MNCs in chip in [indiscernible] data center and do you see this [indiscernible] the government [indiscernible] is there any [indiscernible] .

I couldn't hear clearly, voice was breaking in the middle. .

Let me come again. Do you see any -- is there any possible collaboration with the MNCs for data center chip segment or constructing your data center or sharing? And then my next question is regarding the Australia, the government is announcing. Is there any reduction of capital [indiscernible] by government in transmission sector? Are you seeing any in the future?

If I hear your question rightly, you're asking whether there is a potential collaboration with the multinational in data centers.

Yes, that's correct. Exactly. Or when we can expect it?

We have potential discussions going on with multiple organizations who are strategic in nature to the data center industry and to our company. And we are constantly exploring a partnership with them to expand our footprint, expand our products and services as well as to onboard large customers. So that may trigger at any point of time, it's difficult to put a time line to it, but that may figure at any point of time when both the parties see potential opportunity to do something more than what we are already doing. So that's always on the card.

And do you see any reduction in transmission business?

No. We see it growing only multiples going forward with so much of capacity as I liked to be added. But I will also include the answer to your question in my closing remarks.

We will take the next question from the line of [indiscernible]

Sir, what I see -- I just wanted to know out of INR 9,500 crores, how much is the T&D order book? Because what I see your execution has ramped up massiveness. And going forward with smart meter completion will see a sharp fall in the order book? So your book-to-bill ratio will correct significantly. So in terms of feasibility and who are our plans for the pipeline order book that we have? That's my first question.

I think these details are already available on our website also. As you see, our transmission order book is about 7 projects another one is [indiscernible] you can take FCD and another 1,500 you can take interior distribution business, I can say by and large. And so -- and with the INR 4,000 crore execution, and with the orders already [indiscernible] about 2.5 of the current turnover projecting. So which is quite healthy in the [indiscernible] we hope to add another business of no less than INR 4,000 crores in the coming years as we execute. So this ratio will be maintained [indiscernible] 2.4 to 2.5 to the top line going forward and major customers are well known who are the asset holder in our country. They are namely [indiscernible]. And similarly, they are the major ones, but others are also now coming in the field. So any concessionary our customer like we are working with [indiscernible] China Light and Power. They are also our customers are deploying their assets. They know that of customers opportunity in this segment. .

Got it. And sir, my second question on the same business. What is your working capital cycle or environment for the full T&D business? Is it currently being positively impacted because of the data center build-out?

So data center has nothing to do with working capital. Please don't mix that transmission working capital is met by its own operational generation of cash and operational obligations to beat at project sites and suppliers. So it is [indiscernible] by and large, I can say. As far as data sector is concerned the CapEx for us. And then data sector subsidiaries, they have their own OpEx operations in their own companies. At the moment, they are yet to become cash positive or cash accretive. But the MI business has become already cash accretive down. This year, we expect a cash generation from a business of about INR 400 crores to INR 450 crores, whereas the additional CapEx will be not that -- so that's why I said our additional capital advisement will be limited to INR 250 crores and [indiscernible]

We will take the next question from the line of [indiscernible] JM Financial.

I'm sorry if this question has already been answered. But sir, what would be our stand-alone guidance revenue margins in order [indiscernible]

Already at tier INR 4,000 crores as a revenue, 13% EBITDA was more depending on also [indiscernible] which is not in the control of [indiscernible] of India and EPS of 60 [indiscernible], we'll be targeting.

So this is on stand-alone level and not [indiscernible]

Stand-alone absolutely. .

The order in front. How many orders?

Order intake [indiscernible]

We will take the next question from the line of Piyush Koya from Bativala Karani Capital Private Limited.

Sir, I just have a very small question on the depreciation part. So if you see on the December quarter, the depreciation comes almost INR 9 crores. And again, in this quarter, it has moved back to INR 3 crores. I was figuring out what has happened.

You kindly -- I cannot answer this question off and I [indiscernible] write us e-mail, we'll reply you.

We will take the next question from the line of [indiscernible] from Avis Capital.

Yes, sir, this is regarding data center. So what is our steady-state expectation of EBITDA margins on data centers? And say, if you take a financial year what percent of business we expect from data center side as a percentage to our overall revenue, sir?

Look, let me answer this question as against kits. By 2030, our target, we definitely we do have a top line of almost INR 400 crores out of this business, if not INR 500 crores and EBITDA will be around 50% in this segment, which is generally prevailing or above depending on how India plays out in data center or cloud services or the AI more largely. All these factors will influence this [indiscernible] we should be holding a capacity at that time to buy in role as the 250-megawatt by the operationally. We are -- we need on Eureka as the breakthrough, maybe AI-based so capacity of 100-megawatt also with [indiscernible] in some part of India that will create magical transformation. And with the power procurement and power delivery ability with Techno. I'm very sure it will happen [indiscernible] market we expect. We'll give you a surprise.

And your conviction on 50% EBITDA margin is strong, sir.

That is the industry market. I've told it because these are these renters largely. And the only cost you carry with you is that [indiscernible], which is not very great. I probably [indiscernible] see now it depends on mix of these services, which are not included, that will be upside like our IP services, which we have acquired a license additionally, all power supply business, which may further give us a delta. So all those are not [indiscernible] our leasing of data center space.

Thank you very much. Ladies and gentlemen, we will take that as the last question for today. And with that concludes the question-and-answer session. I now hand the conference back to Mr. P.P.Gupta for the closing comments. Thank you, and over to you, sir.

Thank you, [indiscernible]. I will again repeat what I have said today with a strong financial foundation, execution, track record and a growing order pipeline. We are very well positioned for India's next phase of growth in energy transition, energy consumption growth as I've already said, we'll be targeting a top line of INR 4,000 crores in the current year with an EPS of 60. And for next year, a top line of INR 5, 000 crores with the EPS of 75%. To support this growth, we have outlined a CapEx of INR 1,250 crores this year which include [indiscernible] in our data center, [indiscernible] smart meter. But the [indiscernible] and that of [indiscernible] this year, the additional CapEx from the [indiscernible]. . Importantly, nearly 60% of smart meter CapEx will be funded in total [indiscernible] been, reflecting by improving financial strength at self-sustaining on this segment now. Our EPC business remains fully self-sustaining, generating its short working capital required bank while continuing to make a debt-free gas surplus balance sheet. This provides us with the flexibility to pursue growth opportunities while preserving financial discipline and balance sheet strike. While near-term geopolitical tensions, particularly in the GCC region, they continue to impact supply chains. These developments are alternating investments in renewable infrastructure to support this transition [indiscernible] and creating a long-term business opportunities for companies like ours. Any energy glycine, it calls will create alternate forms [indiscernible] of our growth. We remain committed to delivering sustainable value to all stakeholders through disciplined execution, potential [indiscernible] capital allocation and higher standards of transparency and integrities while continuing to maintain our debt cash plus situation. Thanking you all for joining. And if anybody remains [indiscernible] or if you happen to be [indiscernible] are welcome to drop in our office at the [indiscernible]. Thank you very much.

Thank you, members of the management. On behalf of Asian Market Securities, we conclude this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.