Techno Electric & Engineering Company Ltd
NSE:TECHNOE
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
520.55
1 780.65
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Techno Electric & Engineering Company Ltd
You don't have any saved screeners yet
Ladies and gentlemen, and welcome to the Q1 FY '23 Earnings Conference Call of Techno Electric & Engineering Limited hosted by Asian Market Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ from such expectations, projections, et cetera, whether expressed or implied. Participants are requested to exercise caution while referring to such statements and remarks. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Kamlesh Kotak from Asian Market Securities Limited. Thank you, and over to you, sir.
Thanks, Michelle. Good afternoon, everyone. On behalf of Asian Markets, we welcome you all to the 1Q FY '23 Earnings Conference Call of Techno Electric & Engineering Company Limited. We have with us today is P.P. Gupta, the Managing Director, representing the company.
I would request Mr. Gupta to take us through the 1Q financial results and business highlights, and then we will begin the Q&A session.
Over to you, sir. Thank you.
Thanks, Kamlesh. And my apologies for being delayed by about 5 minutes. So good afternoon to all of you, gentlemen, ladies -- to join -- discuss our financial results for the first quarter ending 30th June 2022.
[indiscernible] this call, which reflects our outlook and part of the future or that could be construed as a forward-looking statement as to -- it connects [indiscernible] or industry [ basics ].
Let me highlight our performance, which is on the second slide. The total revenue for Q1 is around 173 CR, Revenue for our [indiscernible] ...
[Technical Difficulty]
The total revenue was stands at INR 173 crores approximately, which includes the revenue from EPC around 142 CR and from the wind segment around 31 CR. The EBITDA for completion is around 48 CR, the operating profit for our EPC segment is around INR 21.25 crores with some pressures in the EBITDA margin due to high commodity cycle, prices and also, higher overseas trains.
The other income is at around INR 13 CR, the profit before tax is at around INR 50 CR, and PAT is at around 36, which is closer to March last quarter. The EPS is at 3.27. We currently [indiscernible] the investment value in cash and cash equivalents at a stand around [indiscernible] , which is about INR 100 per share.
The significant achievement in this quarter is that we got a business, what almost 199 CR, which is the highest record in last 4 years as recorded by the company. The [indiscernible] order book as on 30th June is that 3214 CR. As completed in last quarter, we have been -- on the outlook side, we have been able to tie over the difficult times and achieved some growth last year, and we foresee growth for the coming years, which begins [indiscernible] with the rate.
We badly -- in the second half, we expect that growth to continue actually 23, 24 and 25 also. We expect large builders out of the FGD segment, payer by segment, data factors and he transmission business will continue to guide us all. In the coming years, we expect strong [indiscernible] as power and [ emerging ] converge.
Additionally, there is significant focus and stress on availability and reliability of our supply. The cost of power and improvement of overall financial health of sector [indiscernible] while renewable power will continue to be focused and related infrastructure, very significant focus on with distribution segment.
The transmission infrastructure for the [indiscernible] it's moving in the [indiscernible] by 500 terawatt by 2020, additionally 25-megawatt of [indiscernible] are planned to be delivered in the next 5 years. The FGD segment will continue to be focused as to [indiscernible] sulfur [indiscernible] considerable progress in CPU in order to project policymaking solutions, but the shape will be now having with STBs and private sector.
The order date is April 1, '21 of the [indiscernible] at plants, we are [indiscernible] capital down sell have to apply by without that at while utilities less by utility [indiscernible] but I expect but this may be expected by 2 years. The stream court are also refused to expedite the entity in government institutions [indiscernible] to take a [indiscernible] that Atlanta stop operation, select technology store mouse.
We have got orders about INR 1450 crores, INR 5 crores or [indiscernible] this quarter, this level of business will continue for next 3, 4 years and [indiscernible]. We largely expect that there will be a status for the transmission side, though we are refusing an upstream in the order of transition infrastructure over the past couple of months, initiating billing for the large lot of 60 gigawatt of renewable power of about 45 megawatts has started -- it started [indiscernible].
[indiscernible] in the last project, 22. We are seeing good interest from large investors in response to participate in above dates by making our company patiently [indiscernible]. This will enhance a [indiscernible] more competitively.
On the distribution side, [indiscernible]. We are wishing on the strengthening of our distribution networks to make them smarter, stronger and delegate the way about the government is to efficiently [indiscernible] so that [indiscernible] . Now broadband [indiscernible] electricity [indiscernible] event [indiscernible] in terms of multiple power supplies [indiscernible] mobile with internet [indiscernible], apart from making [indiscernible] divisions.
The [indiscernible] facilitate [indiscernible] distribution platform [indiscernible] distribution network. It also seeks to be [indiscernible] to continue users of the solution that launched by online [indiscernible] and the provision [indiscernible] of financial [indiscernible] with the objective of enabling competition, announcing efficiency of distribution licenses, [indiscernible] improving and also improving services and to the consumers and also ensuring sustainability.
It also seeks to [indiscernible] Section 62 of the bank provisions, which created reason [indiscernible] besides maintain fixing of maximum sealing of the [indiscernible] . it provides [indiscernible] minimum pairing by the appropriate office. It provides for a lending section of [indiscernible] function that will be [indiscernible] discharged by the respective regulators that is GRC versus [indiscernible].
We then also seek Section 126 to convert the rate of punishment from imprisonment or time to file so as stable [indiscernible] will also Section 152 to facilitate [indiscernible] that it would be mandated to [indiscernible]. We are very hopeful that [indiscernible] sector and something good should happen going forward, which segment have taken debt resolution to sell a part of the assets other than required for centers.
We have 29-megawatt in 3 pockets, 16.9 megawatt, only 51-megawatt is quite [indiscernible], that is not 13- and 18-megawatt in [indiscernible]. In view of the present challenges prevailing in the power sector due to power shortage, we are having good offers for a bit power from the local investing [indiscernible].
In view of this, it is considered prudent to sign a part of the capacity and strategic [indiscernible] situation. The total requirement of power for data sector is 36 megawatts [indiscernible] have complementing capacity of energy to be transferred to [indiscernible] to acquire CGPs supply to power sector by June '23.
COVID-19 has impacted our life in multiple ways, but one positive outcome of this is growth in digital space. With the growth in digital space, that privatization, it is expected that the third-party data tractor industry will grow significantly from the current level of 500 megawatt to 2 megawatt in the next 3 years, at least to 5 gigawatt by 2030.
This day, most of the data centers are located in Mumbai and now, [indiscernible] or STT are already in the process of setting that at a [indiscernible] now shipping, further validating our choice of location.
Technically also in the advanced stage of setting up of that sector of 24-megawatt of IT work of [indiscernible] hyper density nature. We acquired the project and we see the approval of smart construction, and we have achieved significant progress on construction that is building for patients are here already down. And we are the first flow and extra for building super structure to be completed by end of this year. We are hopeful of commissioning in June '23.
Additionally, we will consume the payable power from the operational capacity to classify the data sector which likely the case of major hyperscale customers like Google, Microsoft or [indiscernible] because of their ESG commitment.
Furthermore, we are seeing aggressive interest from strategic partners from USA and China and also primary forms. We acted into a joint venture for the data sectors in India. We are evaluating the available options, and shall conclude only [indiscernible] soon.
With CapEx of INR 13, that is around 45 [indiscernible] per megawatt, 60% to 65% CapEx in the electrotechnical bonds, which is already now expertise as we'll be able to [indiscernible].
With in-house energy, we will have line EPC capabilities and [indiscernible] experience of developing infrastructure projects. We are in better position compared to the industry.
With this, I'll invite questions from our respective investors. You are welcome, please.
[Operator Instructions]
The first question is from the line of Sandeep Tulsiyan from JM Financial.
I have a couple of questions. Firstly, on the overall order book. I think we announced that the order book is now INR 3,200 crores, which is very heartening, and you have booked orders of 1,900 crores. So just wanted more details, you mentioned, there are 2 FGD orders over here that you have about 40 crores, 50 crores. If you can share more details of who are the clients over there. What is the size of each order, in terms of [indiscernible] in megawatt if you can give those details and the other large orders that you won, which is part of this [indiscernible] flow.
P
Yes, is that complete or may I participate now?
Sir, please. I think that's the first question. I'll follow up with the other questions afterwards.
Yes. We are doing 2 FGD solutions. One for the [indiscernible] project at Rajasthan and other at Kalkota. So [indiscernible] 200 to 600 megawatts at each super critical and order is around...
I'm sorry to interrupt, Guptaji, sir. Sir, your audio is not that clear. So I would request you to come closer to the speaker phone.
Yes, I've taken the handset in my hand now. There are 2 stations for which FGD already received. One is Jalawa and another is [indiscernible] from Rajasthan. Kota is 3 to 200 megawatts at each -- or 250, you can say, per se. And Jalawa is 2 to 600-megawatt, likely.
And for Jalawa order is worth about 750 CR and Kota is about 700 CR. So both put together is 1,450. Another order we have received is from [indiscernible] 300 CR for their transmission works in the state of South for [indiscernible] and another in Rajasthan. So these are the key order achievements in this quarter and one is from [indiscernible]. We are going to do a 400 kV station for 150 CR approximately there.
So this altogether is around 1,900 CR in this quarter. So we are seeing good traction starting from previous quarter to this quarter now. And most of these are new businesses as happening. So obviously, they take some time for our completion of engineering, ordering. And they will fell in time wise. Also, I will say, as the commodity cycle is cooling down, getting more affordable. So we prefer to use this quarter in closing out most of the world obligations, which got spilled over from the last quarter.
So we must have closed no less than 12 projects and realize final use. Our receivables are all time low now. Almost around 130 CR and creditors also, almost below 300 crores now in that sense. So a lot of clean slate, we are beginning going forward, and we see a great growth happening in Q3, Q4 this year, and we maintain our target of top line. But first 2 quarters will be and like-for-like of last year, maybe a little better here and there.
So referring to your press release that you have performed. I think we've announced orders of INR 680 crores, but there is an announcement for this balance, INR 40 crores, INR 50 crores that you have mentioned. I just want to understand these orders are still in even page? Or are they confirmed?
No, no, no. They are -- these are all confirmed as you see and advances are in process, not to be received shortly. I think I don't know what is it -- we have filed, if you go to our exchange side, you may find all the details to buy by -- and maybe the exchanges in their transmission may not be showing all of it. But if you go to the side of the exchange, you will find the whole detail, sir.
Understood. And this 40 crores, 50 crores of FGD plus INR 650 crores, what you have announced on transmission side, add the INR 221 crores, 231 crores, but you are taking in the quarter that is INR 1,900. So the difference of INR 230 crores or INR 50 crores, is it post 30that of June? Or like how do you add up that differential?
No, no, no. We have only said in this quarter, it is 1,901 CR, comprising basically of 3 clients: Power Grid, Rajasthan and [indiscernible] and the breakup is 1,450 from Rajasthan, 300 from Power Grid and 145 from [indiscernible]. So maybe some confusion over the rollover of last quarter business, which was also, again, another 500, 600 CR in last quarter.
That 250 crores would have got booked in the last quarter.
Yes, yes, absolutely.
So secondly, I heard you say that you are maintaining your revenue guidance for this year for FY '23. So that growth expectation is still at 30% for the EPC segment and margins in that 12.5% to 13.5% range?
Absolutely right. We will -- top line will grow by 20%, 25% without considering data center top line, let me be clear. You see so far, we have not decided in which year we will take our own development revenue. Maybe we spill over to next year or we may book in the last quarter this year. But without data center, we are targeting for our third customer business, a growth of about 20% over last year. So that will be around 1,250 CR to 1,300 CR.
Okay. And the margin, sir, same because you've done better in first quarter but...
We are hopeful to improve. First quarter, you see the issue where not much procurement was involved, to be honest because they were last like what's left in the projects, and then you get some kind of PV revenue also in this quarter -- in this closing of the projects.
So it is all hybrid, I will say, in essence. So actually, in our business, to be honest, the quarter-on-quarter makes a little sense because if you truly ask me as a personal experience in this segment, I will say project-specific return is more important than quarter-on-quarter per. But nevertheless, we have to perform this role. And at times, which quarter is it by what we never know. But we intentionally, strategically also pointed to play this role when the high commodity cycle impact is there, so that we don't make any high cost commitments and find an opportune time to move forward in booking new supplies or new engagements. So it is all a blended solution, I would say, sir, but -- yes.
Yes. So that is POC completion revenue under -- so just on the order in your guidance for this year, in the past call, you had guided say, somewhere around INR ,3500 crores to INR 4,000 crores of inflow we should be able to get because INR 3,000 crores you mentioned is already booked or L1 and some more orders can come in. .
So what is your guidance or refresh, which you think surely you will be able to book in financial year '23 and also all these orders, which you won of 99 crores. Of course, they would have gone after some negotiation over the last 2, 3 quarters. So do you see margins for these orders should be in line with your company level margins? Or should they be higher, lower? If you can give some perspective on that?
No, in line with the -- I'll say, the company guidance of 13%, which we have given. But we'll try to improve on it. Let me say that, number one.
And on honor, I maintained the guidance that we will attempt to book orders about INR 30,000 crores this year, plus -- so another 1,000 crores to 1,500 crores for the order ship flowing over next 3 quarters where are L1 or where we intend pushing our presence in these segments. But most heartening part now is that my dream of Electricity Act getting through and creating lives in this sector is going to happen.
So that's going to be a long-term driver, which happened in 2003, '04 when the Electricity Act was enacted. So exactly down 20 years, we are again getting into that opportunity, I'd say.
Understood. I have a couple of questions on data center defining. Firstly, on this Chennai Data Center, if you can divest how much CapEx because this guidance for the part that you had at invested on getting the technical partner on board and letting the construction kit started. It seems to be a little bit delayed than what the initial time frame was, although you're still maintaining, we will commission by June of next year. So how much money we'll be spending over there in this financial year? Do you still think you will have the partner in place by, say, September quarter or December quarter? What are the time lines and what should we get set out of this?
You see, the phase 1 of this project, which we intend commissioning by June '23 is around 550 CR in total out of the whole project CapEx. By now, we have spent about 100 CR already. So you can say it will be another 100 CR for each quarter, in next 2 quarters and balance 250 CR will happen in the -- 200 CR in the last quarter of January, March.
But we have some drum sheets on board where we have nondisclosure agreements, so I cannot share with you. Hopefully, that should also get finalized by September. We have interest from many reputed global entities. I can say that much.
Understood. And the revenue booking, which you had guided will start from financial year '24? So what kind of revenues should start coming in from the first year on this one? For the settlement above?
Firstly, gradually, all the other -- it's a 4-phase divided center, each of 6-megawatt IT load. And each quarter, thereafter, we'll be completing 1 phase of the project so that the total station is commissioned no later than March '24 in totality or earlier depending on the -- how our partner is able to get it engaged or find a tenant to it.
So you can say that other than the power revenue, which I would like to keep outside generally, the rentals, which go in this segment is around $100 per plus/minus per month. So you can calculate that way, it will be achieved accordingly.
Understood. And last question, sir, I had on the balance sheet side. You did highlight the cash and investments are INR 1,200 crores, but on the receivable side, I just want to understand, is there any pending, which is left from the [indiscernible] and the other slow-moving receivables, what we had anything pending or those real estate companies where we had given some ICDs. Anything you're spending over there?
And on the wind assets, you mentioned other than that [ 35 crores ] you will be liquidating, so what should we assume like will it be in line with that INR 5 crores per net or kind of a deal value at all the transactions you have done? Or is it -- has it improved or has it gone down, where the market is in terms of your expectations? Some broad guidance, not exactly the broad guidance for that.
You see, firstly, when I say 36 megawatts, I always mean like demand load, which will also be growing in segments as we commission. And this 36-megawatt is required when food station is commissioned between you and me. When we have complete 24 IT load on the station, then we'll be needing 36 to 40-megawatt, which is equivalent to around, you can say, 80, 85 megawatts of the wind power capacity and SCUF comparison on like-to-like.
So we are -- we will be targeting first to sell out around 40- to 50-megawatt of the wind-powered assets, bringing down our capacity to around 80-megawatt, 85-megawatt or a little more. And that kind of [indiscernible] we have already entered into and price realized will range between 4 crores to 4.5 CR, not 5 crores, I will say. But definitely, whatever power we are able to put to our own captive views that will be more valuable.
But going forward, if electricity happens and openers has happened, we do see some kind of more competitiveness in the power rates in the market.
And on the receivable part, both [indiscernible] ICD side and the [indiscernible], the SCB side, any slow-moving receivables out of this [indiscernible]?
No, in [ Tamil Nadu ], now the builds are in process, and we are hopeful of getting payment something in this month and something next month by virtue of our high court interventions also. And government has also facilitating payments from DISCOMs.
But definitely, [ TANGEDCO ] is a bit of a concern. This has remained over the past, but we are able to make our presence felt now, number one. As far as ICD is concerned, we have cleaned up our balance sheet already fully, and all the amounts more or less than realized. So there are no more outstandings. But you can say claims of a certain kind of P&L interest or legal expenses still stands outstanding with [indiscernible] where we hold the post-dated checks. And in due course, we may be getting it.
So what is the total amount, all of these?
I'm sorry to interrupt, Mr. Tulsiyan. I would request you to rejoin the queue, please, as other parties waiting for their turn. The next question is from the line of Deepesh Agarwal from UTI AMC.
My first question is, if we see during the quarter, there seems to be some slowdown in the EPC revenues. So what has impacted the execution? I understand there is a seasonality, but even comparing with the past trend, there is a weakness. So any specific reason?
Firstly, if you understand our sector a little more closely, sir, I will not say it is a slowdown. Actually, project is always a 2- to 3-year cycle to deliver fully. And any new business takes some time in terms of the documentation, engineering, approvals, collaborative, before it becomes a revenue oriented. It is generally now, 6 to 8 months. And it is always productive between 8th to 20th month and then it starts tapering down towards the closing part.
So these revenue streams per projects are always cycle, I will say. This quarter, I will say that it is the most productive quarter for the company, may not be as numbers, but in terms of the managing the working capital and other related risks, commercial risks and all that because closing a contract is more important in our business than bagging order first. That must also be appreciated.
So we have significantly brought down our receivables closed no less than 12 projects to the annualized all their dues, paid off the creditors. So it's a lot of cleaning, which always should happen in our type of ops before you start, again, getting into the new commitments.
So now we are getting into a new cycle and Q3, Q4 will catch up whatever we have lost in Q1, Q2 in the process because almost INR 3,000 crores worth is a new business with us or even INR 2,700 you may say, in last quarter and this quarter. So all this will be productive in Q3, Q4 now and onwards thereafter.
So it is not a slowdown, but I will say that it is wrapping up of the leftover jobs, works, businesses, payments, realization of bank guarantees, [indiscernible], views and whatever you say. It's more hard work. In our business, banking a business is simpler than closing a business, sir, with no claims on either side. So this has been a very, very productive quarter of us.
Understood, sir. Sir, one clarification, this [ booth ] transmission line is not included in the INR 1,900 crores inflow, which you mentioned, right?
Both line? We don't do line work, sir.
In the press release, which you gave last week, you gave out some work on the [indiscernible], which are a line of some 33 crores. That is not included, right?
That is that we booked in last quarter, sir. That is from [indiscernible].
Okay. That is all, sir.
It was already backed in March quarter, sir.
Understand. And sir, what is the execution time line of our order book? So do you think that the guidance of, say, 20% [ plus growth ] this year can also be replicated next year based on the current order book as expected interest?
It has to, sir. I have no choice. I have to complete a project in time. Generally, you can say the thumb norm, year-on-year, we must achieve top line, which is 15% of the order backlog with us.
So if order backlog is presently at 3,200 so truly speaking, I should have achieved 1600 CR at this year, where we are targeting only 1,250 CR now this year. So that 350 crores impact will be visible next year and with the growth in further order book.
So next year has to be 1,500, 1,600 CR in any way. And as I have already told you at last March quarter results that we are definitely going to double up our top line by the year '25, sir.
Okay, sir. Okay. Sir, given that we have got these orders in the [indiscernible] in the GT segment where the competitors struggling on the profitability. Do you expect any kind of a dilution in the profitability on the new orders?
Not at all, sir, because those who are suffering in FCT, they will start -- they all happened when they booked orders 2, 3 years back. And they all got delayed and affected by the commodity cycle also. And even otherwise, the prices at which they backed the business was very low. If you did see the report on it, if you are tracking it, initially, these packages were all going at 35, 40 CR per megawatt, which today has come to almost 1 CR per megawatt, close to that.
Like our Kota Station is 750-megawatt only, and order value is almost about 740 CR. So as you go along, you are able to price it closer to the market realities. And also, these orders are protected by PV grosses, in additionally.
Understood. Sir, what would be the EPC portion of the data center revenue, which will be booking this year? Because if you are doing much of data center CapEx this year, then there would be equivalent or a case from 60%, 70% of EPC revenue also getting good, right?
No, we are not intending to book this year, sir. We will basically be carrying it as a work in progress only and may be taking care -- we will take a call in the last quarter or next year, additionally. Whatever numbers I'm talking to you at the moment is mostly PC business of third parties.
Understood. But sir, what is our cash balance right now and the current investment number?
1,200 CR, 1,200 CR.
Okay, 1,200 crores. And what is the outstanding on a
[ win ]?
Pardon?
Outstanding receivables on win?
About 130 crores is running account builds and another 200 crores as a retention money, which is yet not due.
Okay. And sir, any other slow-moving receivables?
Wind power, we have to receive about 150 crores to 170 crores, which we are expecting to be liquidated this year.
The next question is from the line of Charanjit Singh from DSP Mutual Fund.
First question is regarding these new FGD orders. Can you please help us understand the payment terms. Are they better than what we have seen in the previous orders? Or how are the payment terms for these orders?
They are relatively better, but not as good as we experienced in transmission projects. Like Bokaro, we picked up with a retention of almost 30%, which is 15% in this case now. So it is 85-15 buying a lot, you can say. But the planned properly, we'll make sure that it is like 90-10 only as we actually experienced in normal business because staggered commissioning is feasible in these projects also, some facilities. So you are entitled to get some payments progressively like that.
And sir, what is the expected completion time line for these 2 projects?
These projects, each is 30 months as per the order, but we try to do it early.
But you talked about there has been some delays in terms of FGD and overall implementation and there might be some push out on the time lines from the ministry side. So does that also apply to these customers? And they may ever look to delay the execution and that also leads to sometimes increase in the cost?
No, you see whatever station gets ordered out, they are equally keen to complete it early because they can claim to be the compliance part. I'm sure Rajasthan government will be very supportive to achieve it before [ '24 ] April, May because that is their election year also, by and large. So they would like to be pro climate change and throw compliance to the -- all regulators. So customer is well supporting these projects, and we don't expect any kind of delay happening in this side.
Okay. Sir, you also talked about this electricity amendment bill and a lot of positives which can come out of this. And as we are focusing also on the distribution side of the business, can you touch upon what kind of an opportunity it can open up for us? And which segments within that you would like to target?
You see, basically, it will be expeditious execution of the AMI solutions. And also, they have come out with a scheme called RDSS, reform and system strengthening scheme of the distribution systems.
So all these augment use investment of INR 3 lakh, 3 trillion, they call it crores, over the next 5 years. That is a program of the government has announced. It is available on the MoP website. And states have already started coming out with tenders in this segment as it happened in 0.4 to 0.8 when first time APDRP solutions, followed with rural electrification programs, all were rolled out in the country.
Similarly, now in the next phase, we see that a lot of distribution system strengthening and reforms will be integral part of it. And we are regularly part of it, this business. We did a lot of jobs in Bihar, Assam, in J&K, and many other parts of India.
Presently also, we are doing similar works for the city of Jammu and [indiscernible]. So I will say that there are great opportunities countrywide. We don't intend doing much in this segment. We'll be happy to pitch in bar, only 1% of the bar market, which may be around 3 project crores out of 3 [ this year ] budget of the government, spread over next 4, 5 years. And transmission will obviously continue to provide us 500 crores to 650 crores per year, apart from FGD and Meeting Solutions.
So once data center business becomes part of your top line in '23, '24 and '24, '25, we are sure to double up our top line.
Okay. Sir, the other thing you've talked about 1,000 crores to 1,500 crores of incremental order inflow. If you can touch upon the nature of these orders, what do you intend to pick up in the remaining part of this financial year?
Yes. Basically, we are looking for 1 more FGD orders down line, about 500 crores, plus, minus. Plus we are eyeing another transmission business of another 300 crores, 400 crores. And another 500 crores, 600 crores we'll be eyeing from the distribution business, including AMI, I will say, very easily. Mix may change here and there. But by and large, this will be the segmentation in this.
And we may also be taking opportunity to have 1 TBCB project also for us, about 400 crores, 500 crores, to be implemented over the next 2 years.
Okay, sir. Sir, lastly, on the power transmission side, if you can touch upon the opportunity size, whether we can see a further increase or it may remain stable levels, how you're seeing that outlook going forward on the power transmission, basically.
That's my last question.
Power sector is in [indiscernible], and nobody can give you very perfect answers. Whatever we experienced over the last 2 years, if you project that forward, I will say that transmission business will be a status quo for us.
But if this Electricity Act stands -- approved by September also, then from '23, '24 onwards, I see a lot more activities happening in transmission because the pockets of demand and the pockets of generation have to be married more efficiently than being presently done by the distributing players like CPSU or, let's see, private players or state governments.
So a lot of hard money will happen as a supply chain amendment and achieving economics of the supply chain by strengthening those transmission links with generation closer to the demand pockets and generating pockets, which is not the cause presently.
A lot of power is being cycled in a gross billing manner mainly to meet quotas or allocations or prior PPAs, whatever you call it. So it is still not a free market per se. It is still a market based on bondages, historically, as we have evolved in power sector.
So all those attempt will be to minimize the inefficiencies, improve the quality of the networks, more efficient and strengthen networks, so the technical losses are brought to the bare minimum. And also networks capable to ensure least thefts or no thefts on the highways. So I see multiple technological growth, network growth. I'm very upbeat if it happens. That's what I can say.
The next question is from the line of [ Vinod ] from Bank of Baroda.
Actually, my question was also similar to what Charanjit asked just now in terms of the specific areas where you can see a large CapEx as per the new build. So I think since you answered that comprehensively, what I would like to understand is your thoughts. There is a lot of protest against this Electricity Act bill. So how do you see the final shape of the bill? Do you see a more diluted version that might possibly come in? Or do you think they'll be able to push through the bill the way it is today?
Sir, I'm not neither a power minister nor the finance minister of this country. What is happening today, in my perspective, should have happened 10 years back, if you ask me. We prefer to go for the 1, 2, 3, 4, but every time we saw sunset on the -- you see the question is you have to bring market reforms to a sector like telecom, aviation, ports, highways, which never happened in power, sir. That is the key question. Whether when will consumer benefit, whether I generate and supply power in INR 2.5 or INR 4. In my house or your house, power comes largely mainly at INR 9, 10 only.
So no cities whenever have asked this question in this country. Where is the INR 6 going, sir? Who steals the INR 6 on the way -- on the highway?
So that is the key question, which any sector has to answer. Like telecom, I can talk for hours with you, sir. In '95, maybe you -- how old you are, I don't know. In my [indiscernible] days, I remember, sir, we used to pay INR 30 a minute. We used to have lightning call, [indiscernible] call, wait for ours for a call to happen, connection to be given in my house and whatnot.
So -- and where we are now, you can see why it is free. Now whatever you pay is on data. Smartphone is so smart. It is so efficient. So that kind of technology intervention happens in market only when there is a competition, there is a market reforms. Everybody wants to smartly serve the consumers better than the others. That never happened in power sector. It remained a pseudo competition, by and large.
So if true competition happens at the last mile delivery of power to the consumers and B2C segment becomes stronger than B2B, as experienced until now, you will see it will grow like telecom, sir, or like aviation. You will have so many choices. And so many -- if somebody wants a renewable power, why I have to buy a conventional power here. I must enjoy. I should have a segmentation tomorrow. I want only solar power, sir. I want only hydropower in my house. Why not?
All those solutions are feasible and your smart meters will be able to tell you also how you consume power, what is the pattern of consumption of power. How you -- from where power is coming. And what is the cycle -- hourly cycle of consumption of power in your house.
So many things have yet to happen in power, sir. We still take it for granted that, oh, power is available. It's coming and nobody cares other than availability.
So telecom and aviation, they're probably centrally controlled. Power, I think being a concurrent subject, is I think where the road block is always. Because we see numerous reforms, which it would start with good intent, but they never see the light of the day.
Sir, my takeaway is I think these are stupid excuses. Ultimately, power is now becoming energy and the whole world knows how to manage energy. Energy can never be a subject of a state. Let's be clear, sir, number one. It is beyond their capabilities. They are not capable to manage energy, let me say.
Historically, yes, they had a role. They have been part of this segment. But now with technology interventions, when all of us are coming out of the coal combustion cycles, going more and more to renewables, climate change and more new sources of energy and power, more electric vehicles, electric engines, drives, sir, you have to understand that unless it [indiscernible] administratively, politically influenced DISCOMs cannot be technology-based solutions in the country at the end of the day. They are outdated. They are done with. Sooner, this realization happens with the governments. Better it is for the people and the country, sir. I will say that.
So central government has to have political will to dominate this transformation. And they have plenty of ways to achieve it, sir. But ultimately, you are right. I will say that this sector has become more a part of [indiscernible] today than they're part of progressive development. So let's hope for the best.
The next question is from the line of Sarvesh Gupta from Maximal Capital.
Sir, first question on this current FGD orders, which you said that we have booked at 1 crores per megawatt. So like earlier players might have lost money because they would have come at lower price. And on the flip side, had to face the brunt of high commodity price. But with commodity prices now cooling off, do you envisage some sort of a super profitability on the current orders that we have achieved or we will have to pass it on? And to that extent, 13% looks to be on the lower side given the equation of raw material versus price that we have got. So that is question number one, sir.
Look, these are speculative, I will say. At the moment, I will only say that we are protected as far as the future commodity cycles are concerned, whether -- and any decline in our experience of last 30 years in this industry, sir, any softening of prices of commodities always benefit CPC in some way or the other even if my -- I'm sharing the decline with the buyers through a PV formulae.
So I will say that we are definitely not going to worsen from what we have talked. If at all, it will be better only. But the commodity cycle will really soften more aggressively. So there are all type of global calls. If tomorrow, Taiwan, China goes to war or Russia further becomes more aggressive in taking away part of hived off countries around it, global situation is very, very delicate at the moment. So I'll not like to hedge on it.
And secondly, you see most of the electrical commodities are also becoming part of the new generation solutions. Like transformers, we used to use CRGO if you are connected with the industry. Now we tend to produce more CRNO, not GO because NO there is more valuable and it is a part of the batteries used in EV vehicles. So some segment can always pay a better price than the traditional, sir. So we have to keep our fingers crossed. Hopefully...
Sir, any forward contracts on the raw material side to protect us or to enjoy the better margins?
Sir, generally, our requirements are not much, number one, because they come through the equipment itself. We are not a commodity company, by and large. Still, there is no forward markets even today between you and me. But non-tariff matters, you do have forward contracts, but our -- most of the consumption happens while in the form of equipment with us, like transformer, switch gears or cables So they themselves -- each manufacturer takes care of it. It is on merit.
Understood. Secondly, sir, now INR 1,900 crores of orders have been booked, but in this 45 days after 30th June, there is no order booking. Is that a right assumption?
I will say that we are definitely bidding and we are L1 in 1 or 2 tenders. We can only claim and we have orders in hand with us because generally, we have not claimed like that. But tendering is happening. I can only share with you that tendering is happening. A lot of business has back -- business is back.
L1 in these 2 orders, right? So similarly, what will be the L1 amount as of now?
About 700 crores, 750 crores.
So that most likely will come to us?
Should, if ultimately, this kind of price levels are receptible to the customer. And many customers are finding that commodity prices are cycling -- getting better, they may prefer to have some kind of snap bidding. That is also becoming a way of life with power grid now, that they are opting for snap bidding in between.
Sir, on the DC side, why are we taking so much of discretion as to when the revenue should be booked ideally if the EPC work is currently going on and the contract is awarded to the parent? Then the parent should book DC revenues as per the schedule of construction.
Look, there is no fine answer to this, your question, sir. When we do a third-party contract, you go through the whole co-servicing of the contract and managing it from the ground to finishing. Whereas in DC, you are more of developers, sir, in this and many services are outsourced by you.
Many companies do it in the past, but we are conservative in this regard, I will say. We don't want to over-show the performance, which we have yet not put efforts strongly in it, or revenue is not visible. We like to book that revenue closer to the -- CapEx closer to the revenue happening between you and me. That is only takeaway.
Understood, sir. Sir, on your cash side, now you are already literally floating in the cash. You have INR 1,200 crores. You are also going to sell a [indiscernible] chunk of your wind power assets, which will further give you INR 300 crores, INR 400 crores or whatever, maybe INR 200 crores, INR 250 crores.
In addition to that, we are also generating significant amount of interest income. So sir, what is the solution to the cash that we have? Because even in the DC business, a, there is a debt-to-equity; b, we are looking for a partner. So again, our equity contribution would be pretty less; and c, we are pretty conservative in terms of how we are building it out so as to not affect the overall performance of the company.
So given these things, where is the cash going to be used in this INR 1,000 crore odd cash will always remain with the company? So what is the solution for this excess cash that we have? Should we not give it out? Or are there any other thought process around this area? Because there's just too much of cash which is going to remain with you for the foreseeable future.
Look, we have talked this in the last meet. Probably, you may not be there, where we very clearly categorized that around 500 crores, we are returning to the investors over next 3 years. One buyback is already in process now where we are paying out almost 160 crores, inclusive of tax.
Additionally, we are paying out about 25 crores of dividend. So over 3 years, we intend returning 500 crores to the investors, number one, sir. We have kept another 500 crores to 700 crores for our data center business and another INR 250 of our growth in EPC business.
So it is fairly balanced approach. And if this Electricity Act gets approved, then more and more EPC business will transform itself to the CapEx-based business, where you will only be called upon to make a solution. Like Europe, commissioned, performing and then only asset owner will buy it.
So a lot of cash requirement will be there as a way of life. And we had that, sir, because we have no place to be at the cost of the debt in our business, in EPC business at least. And that is what is our focus that I must close my contracts, I must realize my last-mile payments so that our fees and expenses are fully funded by the closing of the contract, which we did in this quarter and last quarter, that we have realized a lot of cash, closed many contracts, and we are again back to the new business in EPC with clean slate. That is where Techno has always kept the cycle going for the last 10 years.
And yes, I'm not the largest, but I can assure you, technologically and working capital management will be one of the most efficient one.
The next question is from the line of Amber Singhania from Nippon India AMC.
Sir, just a couple of clarification. I wanted to check on the revenue side, you mentioned that a lot of projects were under completion, and that is why the supply content was less, and that is why the revenue number is looking slightly lower. Is it -- am I correct, sir?
Yes. You are not very wrong, I'd say. Services content is larger because whatever number we put it, it is a composite of supply com services. So in cost side, services is almost 50% in that.
Okay. And secondly, sir, out of the total order book, 3,200-odd crores currently, which we have, roughly, what kind of proportion is yet to be started or in the very early stage of starting?
Yes, yes.
[ Where revenues will ] happen in subsequent quarters?
Right.
What could be that proportion, sir?
Almost 80% of the business is new with us, sir, which we have booked in last quarter and this quarter now. And the revenue growth will start from Q3 of this year and continue for next 6 quarters, you can take it.
Those will be the peak quarters starting from Q3 of '22, '23, ending with the Q4 of '24, by and large, out of this business. And then it will start again tapering in '24, '25. And unless we have, again, a new business accrued by the close to '23, which we hope to.
Okay. And out of the total FGD orders, roughly what kind of booking we might have already done, sir, from the old projects of FGD?
Presently, we have an unexecuted FGD business of, you can say, around -- this other than 1,455 as a new business. The unexecuted of DVC is around 68 crores, sir. So you can add the 68 crores to this, which will be around 15 crores, 20 crores.
Got it. And lastly, sir, on the wind side, you mentioned that the megawatt equivalent to 85-megawatt of capacity will be transferred to separate companies, [indiscernible] data center. So what is the time line we are seeing to do that transfer? And are we already -- have you all started the process of canceling the PPA on that account? Or until when we will the Tamil Nadu we'll keep on [ taking in ] the surprise from our end in that case?
Sir, we will -- this transfer will start from October because we don't want to lose out on the peak season presently as happening. It continue -- wind season -- wind is a seasonal industry, which is almost there until mid-October. And thereafter until March, it is a [ lag ] period. So we will start it around October mid and complete it by March end.
So that -- this peak season is fully built out to the government only.
Okay. So this year, it will be basically government billing and next year...
But we are selling off around 40 megawatts now to third parties, which contracts are nearly concluded and we expect to be out of that CapEx.
Okay. And at what price this separate [indiscernible] will sell the power to data centers? Any kind of ballpark numbers in that line? How that agreement will be round off?
Sir, it will be on the obviously tariff of the market, determined tariff only, dynamic tariff only, which itself is under quite dynamically changing. If this Electricity Act goes through an open assess and renewable power becomes a way of life, then tariff is likely to be lower than the generally DISCOM determined tariffs.
And if all tariffs are alike, there may be consumption. Otherwise, we would like to transfer power to the data center at the market determined range or at the DISCOM regulatory approved tariff, whichever is high.
This will be 100% owned by Techno or they will be, let's say, coming in from data center or any other...
It will be jointly on Europe. Presently in our countryside, we have to give a group captive status. A group captive status necessitates that 26% of the equity must be owned by the buying entity. It means data center company has to buy 26% equity of the power company. And balance 74% will remain with Techno only. But the capital side will keep very low so that there is no larger engagement of the data center company in the capital side. It is -- generally, the arrangements are it will be kind of a deposit, which any electricity board takes to supply power of a month to 2 months as a security deposit. So that will be taken in the form of equity.
Okay. So there wouldn't be any money inflow mainly to Techno if you are transferring 26% capable via joint venture? Or it will be...
Yes. There won't be any inflow, sir, but at least we won't have any future power juice from the state discounts. My revenue side will improve month-on-month.
Okay. And then lastly, sir, how much total equity you're planning to infuse in this Chennai data center of 24-megawatt all put together from the Techno side? Is there any cap or any ballpark number which we have kept beyond which we will not go and wait for the [indiscernible] to come in?
No. You see we are going in 4 phases in this project. The first phase is -- each phase is 6 megawatts. The first phase CapEx is INR 550 crores. And we will definitely be not envisaging to invest more than 150 crores to 200 crores as a capital in this.
And when a partner joins and the full capital of the SPV will be around 450 crores to 500 crores. So generally, these foreigners look for a little majority. So it will be either kind of 51-49 or maybe 55-45. So it means Techno engagement will never exceed 200 crores in 1 data center like Chennai.
But we will be starting data centers in other pockets also, where, again, development costs will continuously be encased. So we have definitely allocated around 500 crores for this business spread over next 3 to 4 years.
As that was the last question for today, I now hand the conference over to Mr. Guptaji for closing comments.
Yes.
Sir, any closing comments on your end?
Yes, yes, yes. Thank you all. I'll say thanks a lot once again for joining the conference call with us. With the best of our ability, we have tried to satisfy most of you. And those who still have more queries on our performance or on any of information, they are most welcome to send us e-mail, and we'll be prompt to attend, and it can be addressed to Mr. Vishal Jain, our IR person.
And if you happen to be on this side of the country, you are most welcome to visit us and see how we do our work hands on. It will be our pleasure to take you around our office. Or any project site you want to see, then just write us. We'll be happy to arrange that.
With this, I would like to close the conference and thank everybody, once again, for joining this year.
Thank you. On behalf of Asian Market Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.