Techno Electric & Engineering Company Ltd. share price target

We downgrade (on recent sharp run-up in the stock price) Techno Electric (TEEC) to REDUCE with revised upwards TP of Rs1,600/sh (+2% upside).

Techno Electric & Engineering Co Ltd (TEEC) reported a strong set of numbers with revenue/EBITD/PAT up 138% / 110% / 146% YoY to INR 3.5bn / 475mn / 539mn. Along with the strong operating performance (on a low base), PAT was further boosted by sharp increase in other income and lower tax rate during Q1FY24.

Techno Electric & Engineering’s (TEEC) Q3FY23 revenue declined 38% YoY to Rs1.9bn, impacted by supply-chain issues, resulting in lower execution. Gross margin expanded 500bps YoY to 25.9% on account of softening of commodity prices.

We interacted with the management of Techno Electric and Engineering (TEEC) to take an update on the company’s new initiative, its data centre business, and the long-term opportunities which the company foresees.

Techno Electric & Engineering’s (TEEC) Q2FY23 revenues declined 17% YoY to Rs2.3bn impacted by deferment of execution in the EPC segment to H2FY23.

Techno Electric & Engineering Company’s (TEEC) FY22 annual report highlights its strong business from FGD segment mainly led by States and private sector.

Techno Electric & Engineering’s (TEEC) Q1FY23 revenue declined 8.7% YoY to Rs1.7bn
impacted by lower execution in EPC segment.

Techno Electric & Engineering (TEEC) has reported 193bps YoY increase in margins to 31%, offsetting the subdued 6.4% YoY revenue growth to Rs2.7bn. Order intake is likely to pick up in H2FY22E led by FGD and Power Grid ordering.