The power sector, spanning generation, transmission and distribution segments, is set for fairly healthy growth ahead, thanks to the demand from existing and new-age businesses, apart from robust residential demand.
Between FY25 and FY32 as much as ₹9.1-lakh crore worth of capital expenditure is expected, with significant allocation to infrastructure roll out. This is part of the national electricity plan.
Techno Electric & Engineering is a key EPC (engineering, procurement and construction) player in the power generation (flue gas desulphurisation), transmission and distribution segments. It has also forayed into the data centre space in recent years.
At ₹1,212, the Techno Electric stock trades at 19 times its likely per share earnings for FY27. It has corrected about 30 per cent from its 52-week high as part of the broader market decline in mid- and small-cap stocks.
Among small- and mid-sized EPC companies, Vikran Engineering and SPML Infra trade at 25-30 times forward earnings. The BSE Capital Goods Index trades at nearly 56 times.
A large order-book, healthy mix of projects to ensure reasonable margins, a reliable execution record and a solid client base, spanning public and private sector players, are positives for the company.
Given the relatively-attractive valuations and strong growth prospects, investors can buy the shares of Techno Electric from a three-year perspective.
Between FY23 and FY25, the firm’s revenue grew at a compounded annual rate of 51.6 per cent to ₹2,402 crore in FY25. Net profits expanded at the rate of 32.5 per cent over the same period to ₹383 crore in FY25. The company’s EBITDA margin of 13.6 per cent is among the highest in the industry.
In H1 of FY26, the company’s revenue grew 48 per cent to ₹1,352 crore, while net profits rose 29.4 per cent to ₹247 crore.
Techno Electric is a debt-free company, a rarity in the space. Also, it has cash and liquid investments of ₹2,600 crore, as of September 2025, translating to over 18 per cent of its market capitalisation.
Strong pipeline, client base
As indicated earlier, Techno Electric operates as an EPC player across the power sector spectrum — generation, transmission and distribution. It has executed over 500 projects over the past 40-odd years.
EPC offerings account for almost the entire revenues (over 99 per cent).
Though it has capabilities and executions in a few other areas in the generation space, its key operations are in flue gas desulphurisation (FGD), which is a process to reduce sulphur dioxide emissions from coal-based thermal power plants. This segment accounts for about 10 per cent of the order-book.
In the transmission & distribution segments — the company’s mainstays, the capabilities include planning, engineering, construction and operational support across high-voltage and distribution networks.
Specifically, areas such as regular transmission projects and TBCB (tariff-based competitive bidding)-based contracts on a BOOT (build, own, operate, transfer) model are part of its strong execution record. This segment accounts for about 68 per cent of the order-book.
Another key area relates to smart electricity meters. This involves the development and deployment of advanced metering infrastructure (AMI) and smart prepaid metering solutions, with the division making up over 21 per cent of the order-book.
Techno Electric has a total order-book of almost ₹10,000 crore, as of September 2025. This figure translates to 4x its FY25 revenues, thus giving it a long visibility.
Power Grid Corporation, Rajasthan Rajya Vidyut Prasaran Nigam, Adani Energy Solutions, Indigrid, Nepal MCA, J&K Discom, CESC, IOC, Tata Chemicals, Suzlon Power Infrastructure, NHPC, Karnataka SEB and Vedant are among present or past clients.
Thus, the company has a deeply-entrenched footprint across the power landscape.
According to Power Grid Corporation’s CMD, India’s transmission lines network is set to rise from 4.85 lakh circuit km (ckm) in 2024 to 6.48 lakh ckm by 2032. This gives sufficient scope for a player like Techno Electric to ride on the expansion.
The data centre business is a relatively new business. However, it has already operationalised (August 2025) a data centre in Chennai (Phase 1) with a capacity of 5.6 MW and has set of clients who have been onboarded. The total capacity of the Chennai project is 24 MW.
Its Gurgaon Edge Data Centre has also started taking in customers, though RailTel will take about 60 per cent of the installed capacity. The second edge data centre in Mumbai is expected to be operational by the end of this fiscal. Techno Electric has started construction of another 16-MW data centre in Noida, in partnership with RailTel and a 16-MW data centre in Kolkata.
The company expects ₹125 crore in revenues from the data centre business in FY27.
India’s data centre capacity is set to rise 5x in the next five years to 8 GW by 2030, according to a Jefferies report. This could generate $8 billion in leasing revenues and entail a capex of $30 billion.
Key risks to this recommendation stem from any delay in payments from public sector clients. Any delay or slowness in power capex spending by the government could also delay project rollouts. Though margins are healthy in the data centre business, increasing competition may result in lower realizations.
Published on November 22, 2025
