Techno Electric & Engineering Company Ltd.[Old] share price target

Techno Electric & Engineering (TEEC) continued to report a weak performance in 4QFY18. Its consolidated revenue fell by 9.8% YoY to Rs3.2bn owing to 8.1% YoY decline in EPC business, which contributes 97% to its total sales, while PAT remained flat at Rs334mn (+0.4% YoY). Notably, other income declined by 57% YoY to Rs129mn, as last year it benefited from sale of wind asset and dividend income from subsidiaries. However, we continue to remain positive on TEEC on the back of presence across entire power sector value chain and robust revenue visibility backed by strong order book and lower execution risks. Strong order book, likely ramp-up in T&D; capex, robust FCF generation and high EBITDA margins continue to augur well for TEEC, in our view....

GST Transition Drags Quarterly Performance; Maintain BUY Techno Electric & Engineering (TEEC) has reported a weak performance in 2QFY18 with its PAT declining by 12.9% YoY to Rs690mn. Led by 32.1% YoY and 25.4% YoY decline in EPC and Wind business, respectively (led by GST impact to the extent of Rs6bn-7bn), its consolidated revenue declined by 31% YoY to Rs2.5bn. However, we continue to remain positive on TEEC on the back of presence across entire power sector value chain and robust revenue visibility backed by strong order book and lower execution risks. Considering strong order book, likely rampup in T&D; capex, robust FCF generation and high EBITDA margins, we maintain our BUY recommendation on the stock with an SOTP-based unrevised Target Price of Rs431....

Blip in EPC revenue due to GST transition Techno Electric (TEEC)'s 2QFY18 results missed our expectations. While we were negatively surprised by the magnitude of the decline in EPC segment sales (down 32% YoY), management highlighted that revenue booking had been deliberately slowed down after GST implementation, as it awaited clarity on tax rates, besides facing a few transitionary issues. The sales decline in the wind energy segment was along expected lines due to sale of 33MW capacity in Jan'17. However, operating margins were stable despite a sharp fall in sales, due to a favourable execution mix and tight controls on fixed overheads. Given the...

Techno Electric & Engineering (TEEC) has reported a strong performance in 1QFY18. Its PAT surged by 48.7% YoY to Rs690mn, as execution of several projects was advanced in view of GST rollout. Driven by robust EPC business, TEEC's net sales rose by 52.2% YoY to Rs4.1bn. We continue to remain positive on TEEC owing to its presence across entire power sector value chain and robust revenue visibility backed by strong order book and lower execution risks. Considering strong order book, likely ramp-up in T&D; capex, robust FCF generation and high EBITDA margins, we maintain our BUY recommendation with an unrevised Target Price of Rs431. Better Segmental Performance EPC Revenue Surges to Rs3.68bn EPC revenue grew by 59.3% YoY to Rs3.68bn, while segmental EBIT margin increased by 190bps...

XX Margins Improve Substantially: TEEC's overall margins surged by 834bps YoY to 21.1% aided by both EPC & Wind segments. Notably, wind segment managed to back in the black with Rs130.1mn EBIT profit in 3QFY17 from Rs87.4mn EBIT loss in 3QFY16. Reported profit zoomed by 44.4% YoY to Rs405mn on reversal...

Techno Electrics (TEEC) 3QFY17 result was in line with our estimates as subdued execution in its T&D segment ( 4% YoY) was offset by better margins, both in T&D (15.1%, 360bps YoY) and Wind (EBIT of Rs 130mn vs. EBIT loss of Rs 87mn YoY). Improved grid availability in Tamil Nadu led to profitability in the Wind business.

BUY Techno Electric & Engineering Company Ltd at CMP Rs. 299 and add on dips to Rs. 269-274 for the Target of Rs. 343

Techno Electrics (TEEC) 2QFY17 results in line led by robust performance across both segments. EPC revenue grew 47% YoY (Rs 2.97bn) and the mgmt reiterated its 30% YoY growth guidance for FY17E. With improved grid availability, Wind revenues also reported strong growth of 38% YoY for the quarter.

Techno Electrics (TEEC) 4QFY16 revenues were lower than estimates. However, the management stated that project execution was on schedule. EPC EBIT margins stood robust at 17% ( 100bps YoY). The 4QFY16 order inflow at Rs 6bn surprised positively, leading to a 28% YoY growth in the order book (Rs 26bn). Hence, we increase our revenue estimates by 2.3/8.5% for FY17/18E.

Techno Electric and Engineering Company (TEEC) is amongst India?s premier T&D; substation EPC companies with a substantial wind energy portfolio (162MW) and investments in transmission assets.