In This Article:
Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Techno Electric & Engineering Co Ltd (BOM:542141) has a robust order book of around 10,800 crore, providing strong revenue visibility.
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The company successfully completed a challenging project for Seeker Power Group ahead of schedule, showcasing its execution capabilities.
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The company's revenue for the first half of FY25 increased by 16.5% compared to the previous year, with an EPS growth of 50%.
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Techno Electric & Engineering Co Ltd (BOM:542141) is expanding its presence in the data center sector, with ongoing projects in Chennai and upcoming projects in Kolkata.
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The company has successfully raised capital through a QIP, enhancing its financial resources for future growth opportunities.
Negative Points
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The company's revenue target for the year is challenging, requiring significant execution in the second half to meet the full-year guidance.
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There are delays in land parcel acquisitions, impacting project execution timelines.
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Margins have been compressed due to increased costs of services and raw materials.
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The smart meter deployment segment faces execution risks and is not yet classified as an infrastructure business by the government, leading to potential financial uncertainties.
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There is a slowdown in the FGD segment, with limited new business expected from this vertical.
Q & A Highlights
Q: What is driving the expected revenue growth in the second half of FY25, given the first half results? A: The Managing Director explained that the delay in receiving land parcels from clients like Power Grid and Adani affected the first half. However, with four parcels now received, execution speed will increase, allowing them to meet the full-year target. The second half typically sees better weather and higher activity, contributing to the expected growth.
Q: Are there any slow-moving orders in the current order book of 9,700 crores? A: The Managing Director stated that there are no slow-moving orders. All projects have specific timelines, and any delays in land acquisition are compensated by accelerated execution once land is available.
Q: What caused the margin compression in the current quarter, and what are the expectations for the second half? A: The Managing Director noted that margin fluctuations are common in project-based businesses due to timing of revenue and cost recognition. They expect overall margins to stabilize around 13-14% for the year.