Techno Electric: How Data Centres Could Transform Its Growth Story

Synopsis: Backed by a debt-free balance sheet, a Rs.9,566 crore order book and Rs.2,612 crore smart metering portfolio, the company is expanding beyond transmission EPC into data centers and annuity-style infrastructure assets. While transmission remains the core growth driver, management expects digital infrastructure and recurring revenue businesses to play a larger role in the company’s next phase of growth. 

Traditionally known for its power transmission EPC business, the company is now entering a new phase of growth by expanding into digital infrastructure and annuity-based businesses. With data centers, smart metering projects and long-term infrastructure assets gradually taking shape alongside its core operations, management is working to build a more diversified business model with greater earnings visibility and recurring revenue potential.

Building the Portfolio 

Chennai Campus: The Flagship Hyperscale Bet 

Techno Electric & Engineering Company Ltd Chennai facility, a 36MW hyperscale campus  came online in September 2025 and represents the company’s most significant data center bet so far. Within six months of operations, the company had tied up 0.5 MW of capacity and had active pipeline discussions covering over 2 MW with enterprise and cloud customers.

Management acknowledged on the earnings call that Chennai is a more gradual market than Mumbai, given the limited presence of hyperscalers and BFSI players, but emphasized that the city’s steady industrial and IT/ITS base ensures a consistent flow of demand. 

The fact that Chennai is one of only two cities in India connected to multiple submarine cable landing stations  alongside Mumbai  gives it a structural importance for international connectivity that management believes is underappreciated. A Phase II expansion is already being evaluated.

Gurgaon Success and Mumbai Launch Validate Edge Strategy 

The Gurgaon Edge Data Center, developed in partnership with RailTel and commissioned in August 2025, is now fully occupied and generating roughly Rs.2 crore in annual revenue at positive operating margin  a small but meaningful proof of concept. The Mumbai Edge Data Center went live in May 2026 with an active customer funnel across government, private enterprises and the BFSI segment. The company expects to fill Mumbai’s capacity within the current financial year.

Noida and Kolkata Strengthen Future Capacity Pipeline 

Techno Electric & Engineering Company’s  Noida campus (16 MW) is being built in partnership with RailTel. A 500 kW unit  was commissioned around May 2026, with strong early demand already visible from government customers. Management expects this initial phase to be fully occupied by December 2026. The full 5 MW first phase is on track for commissioning by May 2027. In Kolkata, the 12 MW campus is under construction and on schedule for commissioning by end of calendar year 2028.

RailTel Partnership Expands Nationwide Edge Network 

Beyond hyperscale, the company has a 20-25 year contract with RailTel to deploy 102 interconnected edge data centers across India. Two are live (Gurgaon, Mumbai), and management plans to begin construction at 2-3 additional locations  Indore, Lucknow, Chandigarh, Vizag and Prayagraj among them  within FY27. The RailTel rollout has moved slower than anticipated due to land acquisition delays on RailTel’s end, but management is confident that once land is handed over, each facility can be delivered within a year.

Revenue Ramp and FY30 Outlook

Techno Electric & Engineering Company Ltd data center business is not yet contributing meaningfully to consolidated financials. Management guided for Rs.40–50 crore in data center revenue in FY27, a significant step down from the Rs.100 crore figure that some investors had expected  a number management clarified was never its own official guidance. The recalibration reflects the reality of being a new entrant competing against players like Adani, Reliance, NTT, Sify and STT who have been in the business for decades.

Looking further out, management’s FY30 target for data center revenue is Rs.400–500 crore, with EBITDA margins in the range of 50%  consistent with the lease-rental nature of the business once facilities are stabilized. The company expects to hold at least 250 MW of operational capacity by that point, including a potential Eureka-type breakthrough with a major hyperscaler deploying 100 MW or more in India.

Total data center capex committed so far stands at roughly Rs.600 crore, with a further Rs.1,000 crore planned in FY27  of which Rs.250 crore will come from the parent balance sheet and the remaining Rs.400 crore from internal accruals within the data center business.

On utilization ramp-up, management noted a realistic timeline: after commissioning a new capacity block, it typically takes around 12 months to reach 75–80% occupancy  the threshold at which it becomes financially prudent to begin the next capex phase.

Record Order Book Provides Multi-Year Revenue Visibility

While the digital infrastructure business is still in its early stages, the transmission business continues to remain the foundation of growth. The Techno Electric & Engineering closed FY26 with an unexecuted order book of approximately Rs.9,566 crore, one of the highest in its history. In addition, it secured fresh orders worth Rs.386 crore after year-end and achieved L1 status for projects worth more than Rs.810 crore, further strengthening future revenue visibility.

Transmission projects account for nearly 65% of the order book and continue to benefit from India’s massive power infrastructure expansion. With the country expected to invest nearly Rs.8 lakh crore in transmission infrastructure over the coming decade, management sees a long runway of opportunities ahead.

Smart Metering Creates Long-Term Recurring Revenue

Techno Electric & Engineering Company’s another important growth engine is the smart metering business. The company has secured projects covering approximately 2.24 million smart meters under the DBFOOT model, representing contracts worth around Rs.2,612 crore. Unlike traditional EPC projects, these contracts provide long-duration revenue visibility through installation and maintenance agreements spanning nearly 10 years.

Management indicated that nearly 70% of the awarded smart meter projects had already been executed by FY26-end, with full implementation expected during FY27. As these projects move into the operations and maintenance phase, they can create stable annuity-style cash flows and improve earnings visibility.

Strong Financial Performance Supports Expansion

The ongoing transformation is being supported by robust financial performance. FY26 standalone revenue increased 35% YoY to Rs.3,252 crore, EBITDA grew 36% to Rs.448 crore and profit after tax rose 35% to Rs.517 crore, marking another year of record earnings. Despite continued investments in new businesses, Techno Electric & Engineering has maintained its debt-free balance sheet, providing significant financial flexibility for future expansion.

Future Perspective

Techno Electric & Engineering Company  is slowly transitioning from a transmission focused EPC contractor to a diversified power and digital infrastructure platform. Good revenue visibility with Rs.9,566 crore order book. Newer businesses such as data centres, smart metering, digital substations and annuity assets could become meaningful earnings contributors over the next few years.

 Management’s focus on building recurring revenue streams through smart meters and data centers, combined with a debt-free balance sheet and strong execution track record, positions the company to benefit from India’s expanding power and digital infrastructure investment cycle. Execution and occupancy ramp-up will remain key monitorables. 

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