Techno Electric & Engineering Company Ltd
NSE:TECHNOE

Watchlist Manager
Techno Electric & Engineering Company Ltd Logo
Techno Electric & Engineering Company Ltd
NSE:TECHNOE
Watchlist
Price: 1 583.6 INR 0.74% Market Closed
Market Cap: 184.2B INR
Have any thoughts about
Techno Electric & Engineering Company Ltd?
Write Note

Earnings Call Transcript

Earnings Call Transcript
2024-Q1

from 0
Operator

Ladies and gentlemen, good day, and welcome to Q1 FY'24 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. Suraj Sonulkar from Asian Market Securities Limited. Thank you, and over to you.

S
Suraj Sonulkar
analyst

Thanks [indiscernible]. Good afternoon, everyone. On behalf of Asian Markets, we welcome you all to the Q1 FY'24 Earnings Conference Call of Techno Electric & Engineering Company Limited. We have with us today Mr. P. P. Guptaji, Chairman and Managing Director; and Mr. Ankit Saraiya, Director representing the company. I request Mr. Shri P. P. Guptaji to take through us an overview of a quarterly result and then we shall -- question and answer session. Over to you, Gupta ji. Thank you.

P
Padam Gupta
executive

A very good afternoon to all of you, and we are really grateful that you have spared your busy time to be part of our conference. And I welcome everybody to discuss our financial results for the first quarter ended 30 June 2023.

Anything said on this call, which reflects our outlook for the future or that could be constituted as a forward-looking statement must be reviewed in consultation with the risk that the industry and/or the company faces. Let me first highlight our performance for the quarter. Just to update what we discussed earlier that our March end balance sheet was a little difficult balance sheet to understand because we aggregate [indiscernible] divisions of the company, mainly with assets in Tamil Nadu.

And it was classified as discontinuing business for the company by our auditors. Similarly, the company created two subs to promote its two new business verticals, namely, number one, Data Center; number two, AMI business. In both, we have now in the process of setting up of the business.

See, they are not operational, nor they are generating any revenue or the bottom line in the [indiscernible]. So as such, I would like to say that our consolidated results do not reflect our complete situation. It's not a consolidation of operating companies or matured businesses. So as such, I retreat that our standalone results bring the true and fair operations and picture of the company.

And [indiscernible] please be viewed accordingly. And while going forward, I'll be discussing the progress on both the subsidiaries in addition what we are doing in the [indiscernible]. Over the period...

Operator

I'm sorry, sir, there's some cracking noise coming from the line.

P
Padam Gupta
executive

Right. My line?

Operator

Go ahead, sir.

P
Padam Gupta
executive

Yes. The AMI business will become operational earlier than data centers because it is executed progressively by number of meters to be installed at a number of consumer finishes. So as many meters becomes operational they become eligible for revenue accordingly.

The total revenue of the company from EPC business in a stand-alone mode is around INR 343 crores in the quarter which we highlighted by the last meet also between us, which is up by 135% year-on-year. We expect the similar level of revenue for the forth coming quarters as well.

As company is having a lot of business backlog now to execute and continue to experience same kind of collection in the market. The EBITDA for the company stands at INR 47.48 crores for the EPC business, that is under 10% year-on-year. EBIT for the EPC business is at INR 45 crores up by 91%. The other income is at INR 30.64 crores compared to INR 15 crores nearly last year.

The profit before tax is at INR 72 crores, approximately almost double of last year quarter. The PAT is at INR 54 crores approximately, which is 150% of the same quarter last year. There was a loss in the discontinued business operation marginally because of the expenses in winding up of the establishment, which is around INR 2.5 crores. And it is not comparable, but still the like-to-like the profit ones for [indiscernible] in this business last year.

The total profit for the company for the quarter stands at INR 51.3 crores, which is up by 42.6% year-on-year, and EPS is at INR 5. The current investment value in the books of the company is at around INR 1,500 crores, which is about INR 140 per share. During this year, we have L1 status in active award of the contracts in transmission business alone worth about INR 1,500 crores, out of which we have already received prestigious order of INR 350 crores for PGCIL and another order -- another business of around INR 500 crores from PGCIL is expected before September end, which are in various stages of approval, where we have been established L1 and competitive.

Similarly, we are also placed L1 in business worth about INR 3,650 crores apart from the order backlog of around INR 3,824 crores as of quarter 1, unexecuted business, which largely comprises of 2 AMI orders worth about INR 2,000 crores and rest is the transmission site. We have used bidding pipeline and we are hopeful of bagging at least -- further business of around INR 2,000 crores, but we would like to assure you that has committed in the last review, at least INR 4,000 crores business will definitely be further achieved this year, and we'll close with the order backlog of about [ INR 6,000 crores ] by March '24.

On the outlook is very promising. I will say that the -- all difficulties of last 3, 4 years are behind us. And as I said that morning has arrived, and we now see -- we focus on growth, that is what we are looking on. We expect the growth momentum has begun, but it will also not only continue for the next 3 years, but it will also make up for the last 3 years. We expect larger business out of transmission, AMI segment and as well as higher technological solution applications in transmission due to larger injection of renewable power in the grid and also data centers.

The FGD segment has been subdued because of the energy issues, country is facing at the moment. Probably this is the first year when energy demand is growing -- going to grow in 2 digit, double-digit growth, which, in the last 4 years -- 3 years, we have seen no more than 3%, 4% per year or maybe stagnating growth.

So government of India has promised another thermal capacity of 30 to 40 megawatts, but it will largely be [ brownfield ] and in [ PSU ] segment. We are also seeing strong power sector reforms as government desires to ensure payments to the generators, timely payments to the generators as well as wants to contain losses of the DISCOMs strongly, the amendment to the Electricity Act December '22 is also in place now and central government is trying to take a larger role powered out of the amendments, ensuring availability and reliability of power supply as well as billing and money collection -- last-mile money collection out of the sale of powers.

The overall financial health of this sector is likely to improve in the coming years if this focus really stands implemented in lateral -- more than lateral, I will say in spirit also. While the focus will continue to be on the renewable power and addition of almost 500 megawatt by 2030, as committed by the statement of our Prime Minister as well as government of India. So we are -- and to have injection of 500 megawatt in the grid, we will definitely need energy storage solutions like battery, BESS or pumping storage of no less than 5% of this capacity. And these will also have to be additionally supported by many kind of active reactive power management solutions in the grid and we see significant activities where your company is fully qualified and competent to provide solutions in this space, both through power grid or to any private player in this segment.

And additionally, our business of doing off-site works or balance of plant works in the thermal powerhouse will also be somewhat back, but we have not considered in our order book or as the opportunities so far. The FGD segment continues to be a bit subdued at the moment, I will say, but a lot of work is still pending. The capacity -- thermal capacity being largely in private sector, probably the owners believe that they may get more time over -- up to 2030 in future. So they are definitely reviewing and waiting for commodity cycle to be subdued further so that these solutions can be rolled back to sub 50 lakhs per megawatt as was happening 4 years back.

Our order, which we have got in Rajasthan is progressing normally. In the transmission sector, we will say that after a long gap, the transmission sector is back. There is a TBCB bidding happening, which is not limited to 50 megawatt now. It is larger than that, maybe 100 megawatt or maybe 75 megawatt or both but a lot of bidding is in progress at the moment. And we are finding that every month 4, 5 concessions are being awarded to power grid or to the private sector. The interstate transmission system for evacuation of around 15 megawatt of renewable energy from Ladakh has been proposed by the government with a center government support of INR 83 billion with a CapEx outlay of around INR 20 billion, and we are already part of it at [indiscernible] and [indiscernible].

The total bids open for transmission now -- submitted, I will say, is no less than INR 40,000 crores. And secondly, I will say that in the present networks as renewable power is concentrated in only 6 states in India and rest of the states have to be fed by transmission. That was only out of the generation in the 6 states. The substation allocation is larger than what we have experienced in the past. It is almost around 25% to 30%. So we can expect substation business out of this transmission business of INR 40,000 crores -- INR 1.4 lakh crores, rather. It will have substation business of around INR 40,000 crores by 2030. So we can at least hope to get business worth about INR 1,000 crores to INR 1,500 crores every year over the next 3 to 5 years.

As I said, we are already placed L1 in INR 1,500 crores in this segment, first time after a lapse of about 3 years. And our presently unexecuted business in this segment is already INR 1,000-plus crores. The distribution side reforms are really flying in the country. I will say there is a lot of steps on RDSS scheme implementation in the country, government have allocated INR 300,000 crores for this scheme and tenders are being called every passing week and there is a strong focus on AMI system strengthening as well as on the -- in the intelligence upgradation of the networks installed in the system by installing a lot of SCADA, ADMS solutions additionally in the distribution management as is being done earlier for the transmission network. We expect business, but no less than, I will say, INR 2,000 crores -- INR 2,000 crores out of these segment, at least every year.

We have already got -- we are executing an order of 2.5 lakhs meter in Jammu & Kashmir city worth about INR 300 crores under DBFOOT model. But under PMDP scheme, which is different than RDSS, and we are also L1 in INR 2,000 crores worth business for another 20 lakhs meter supply in the state of Jharkhand and Kashmir itself.

The Electricity Act management has given -- have promised, I will say, a choice of power suppliers as in case of mobile or Internet services. But this is still, to my mind, a larger promise than the LTE. Let's hope that it happens. Similarly, there are promises on the open access also and a lot of renewable power is being sold through the power exchanges as an amendment to the Electricity Act so you can expect going forward that more and more trade growing in multiples in renewable power over conventional power in power exchanges. So it should, in a way, what could not be achieved by central government directly because of the concurrent [indiscernible] issue in power sector is being attempted to be achieved indirectly by [indiscernible] and also making consumer feel more comfortable and getting power at more competitive rates.

The system also allows provisional or reasoning tariffs so that electricity boards can also share they are updating of the costs more frequently with the consumers through the regulators and regulatory mechanisms are also expected to be ramped up and made more robust and pro consumer more than the influenced politically as in the past. In totality, I will say that the power sector continues to be at a critical juncture as an uptake, which we have been hoping for the last 5, 7 years, and I'm very hopeful that something good is going to happen going forward and which is visible now.

The data center industry is growing multiply. The trajectory in the market is larger than we had anticipated. And I will also ask Ankit later on to add some more space to it. Ankit, are you able to hear me?

A
Ankit Saraiya
executive

Yes.

P
Padam Gupta
executive

Can you speak out on data center influence due to artificial intelligence and what all is going on in your data centers territory?

A
Ankit Saraiya
executive

Yes, sure. So just to give some idea about the industry. Until today, we all believed that cloud is the most prominent reason why that has led to the growth of data centers and demand of data centers apart from other regions, such as 5G and many more. But then, I guess, over the last 6 months, the industry has taken a very dynamic shift, especially because of the way AI and machine learning has become [indiscernible] accepted it on day-to-day life, especially generated AI what we understand as ChatGPT. So that has especially led to a change in the way infrastructure of data centers are thought over, designed because as the world moves towards adopting AI on a day-to-day basis, the requirement of infrastructure to cater to those kind of computing requirements will also change.

And just to give an idea, I think it's expected that about $75 million of investments will go into AI -- developing AI models over the next 5 to 7 years by all the companies involved in this sector. And to cater to that requirement, almost $500 billion of data centers are required by 2030. And this is limited to just AI. And it is -- I would expect that at least the Asia Pacific region should attract 20-odd percent of this investment, and it can be more. But on the conservative side, let's say, about 20-odd percent. And India alone is in a weak spot to attract nothing less than 30%, 40% of the entire investment in the APAC region.

Given the kind of land [indiscernible] we have compared to other countries in this region and secondly, the renewable energy capacity that we sit on. Plus very recently last week to understand about the digital data protection build. And I'm sure that is also further going to aid in demand of data centers, specifically in India. Because it starts the journey of data localization and slowly and steadily, hopefully, the data belonging to the [indiscernible], especially their personal data will continue to reside in a case. So that's the few developments that have been visible in the industry over the last 6 months.

P
Padam Gupta
executive

Yes. Can you update on progress in Chennai project?

A
Ankit Saraiya
executive

Chennai project is moving smoothly. We are in the middle of -- the construction is at it's peak. We should be able to complete the civil and structural works for the data center building in the next 2 to 3 weeks' time and then start focusing on the electromechanical works, which should take us about another 6 months to complete. Given the first data center, there is -- there has been a significant learning curve in the -- on the construction side, but we are well on top of it. We have not let it have any impact on the project itself. But there might be a little shift in the commissioning time lines, and we are hopeful that by December or maximum by March '24, we should have the first phase of the projection.

P
Padam Gupta
executive

Yes. We are -- further to what Ankit has said. I would like to add that we are seeing aggressive interest from strategic investors to enter into a JV with us in this space as well as either we partner or buy out our Chennai data center. We are evaluating the various options, and I am hopeful to contribute for the close of this financial year, which I believe...

A
Ankit Saraiya
executive

We would be very happy if any of you would like to visit the project. We would be happy to take you around the project at Chennai and the different aspects of this data center.

P
Padam Gupta
executive

It's very strategically located and in a very beautiful pocket in the IT [indiscernible] very next to the -- very [indiscernible] campus for IT services, use campus, they have employed about 1 million people at Chennai. So we'll be happy to have you there.

Closing with segment, I would like to say that whatever money we realized about INR 450 crores out of the [indiscernible], they all are part of our cash [indiscernible]. With this, I will now like to invite questions.

Operator

[Operator Instructions] We have a first question from the line of Sushil from Nuvama Wealth Management.

Since there is no response, we'll take our next question from the line of Deepesh Agarwal from UTI AMC.

D
Deepesh Agarwal
analyst

My first question is, is it fair to say the difference between EPC segments consol and stand-alone is primarily a data center execution?

P
Padam Gupta
executive

No, it includes both now, AMI and data center.

D
Deepesh Agarwal
analyst

Okay. Okay. So -- and the consol number would be purely which is external, right?

P
Padam Gupta
executive

Yes, it's third party.

D
Deepesh Agarwal
analyst

Because if we see the console margin in the EPC segment, that seems to have been dropped meaningfully. So what would have been the reason for decline in margin for external customers?

P
Padam Gupta
executive

You, see Deepesh, that is not fair to look at it because in AMI also, we are doing an EPC business only for the utility, but mode of payment is a little different than which we normally are offered in transmission segment on a like-to-like basis. That is number one. Number two, the EPC work is only carried out by a stand-alone basis [indiscernible], whereas AMI carries on with the funding over that FMS SLA requirement [indiscernible] contractual obligations with the utilities, et cetera, on like-to-like basis. So all expenses incurred in consol, some expenses of like overheads, manpowers and related infrastructure costs, they continue to be part of the consol as it is and not purely allocated to the job in our cost accounting.

But coming to the [indiscernible] part in AMI, as much the issue with the [indiscernible] between the SPV and the parent since we have not raised bill to the SPV, there is no capitalization of the cost in SPV level, which we want to align more or less with the revenues, which happens more significantly eligible in AMI because the revenue is per meter, per month basis for each lot of 12,500 meter. So the time lag between AMI subsidiary and parent is no more than 3 months to achieve [indiscernible], which we call scheme -- system acceptance test and it gets built by [indiscernible] and SPV. But in data center, it's wholesome asset you create like you do in TBCB [indiscernible].

So we want to create a billing only close to the revenue stream availability. Otherwise, you are out of pocket with GST costs. That is the larger indifference between the two.

D
Deepesh Agarwal
analyst

Understood. What would be the extent of data center revenue, which we would have booked in the EPC business and also AMI business?

P
Padam Gupta
executive

Roughly, you can say in data center, it is around INR 100 crores as a -- it is cost to cost, let me just [indiscernible] but in AMI, we have already executed work about 60%, I will say, but not commission as that did not happen earlier, which has happened now and start building this month already. So in the case of our policy so far is that wherever we achieved 20% of the order value, we can build it at order value otherwise, it continues to be at cost to cost. So that is how the books are built accordingly. So in data center, it continues at cost to cost so far. Whereas in AMI, it became low data to the EPC order value versus cost. So that is why in this one quarter only, you will find there is a gap in EBITDA of consol versus the stand-alone because of AMI EBITDA [indiscernible] of the goods.

D
Deepesh Agarwal
analyst

Okay. And what should be the margin we should look forward for the full year?

P
Padam Gupta
executive

As I have already given a guidance, it should be [indiscernible] plus finance. And by March '24 -- you see the problems are all quarter-on-quarter. If you take annual account, you will see that all these subs will be fully capitalized and fully ready and fully executed businesses. So these kind of ambiguities won't adjust by March '24. But in quarter-on-quarter, it has impact and this being the first quarter it speaks a little larger impact, which will get utilized in Q2. You will see in half year balance sheet. And large -- and 100% by March '24.

D
Deepesh Agarwal
analyst

Sure, sure. Also, if you can help understand what would be the execution time line of the two AMI orders which you've got of INR 2,000 crores, which are L1 and the transmission order of INR 1,500 crores? Would they be contributing to your revenue this year or they will start next year? And what should be our revenue guidance for this year and next year?

P
Padam Gupta
executive

You see this is a little difficult issue in our business [indiscernible] because the base of execution is always the partnership between the asset owner and contractor on [indiscernible], per se. But by and large, you can take even new business will be eligible for revenue bookings this year whatever new business we are getting in transmission. And they have anyway will be complete by the end of the year, whatever -- presently, we are executing. Now coming to L1 business, they are under RDSS scheme, where we get 27 months to implement the scheme. All these schemes where we are L1 in[indiscernible]. So [indiscernible], the revenue this year maybe very marginal out of those orders. But the scheme of INR 300 crores will definitely be completed fully in this year. And at least, I will say we should be able to execute another business of 2.5 lakhs meter out of this 2 million meter in this year additionally, I would say but data center will be fully done by March '24.

D
Deepesh Agarwal
analyst

Okay. Sure. So what should be our expectation in terms of EPC business revenue this year?

P
Padam Gupta
executive

I've been suggesting INR 1,500 crores, INR 1,600 crores, but it may go above that.

D
Deepesh Agarwal
analyst

And this is including the data center business?

P
Padam Gupta
executive

No.

D
Deepesh Agarwal
analyst

Okay. This only includes the AMI?

P
Padam Gupta
executive

Right. AMI and third party transmission.

Operator

We have a next question from the line of [ Shreyans Gathani ] from SG Securities.

U
Unknown Analyst

My question relates to the data business. So last quarter, we mentioned that we would be operationalizing the first part in September. So what changed in 3 months that we are pushing the implementation by approximately 6 months. And also, you mentioned that you only recognize the EPC revenues after 20% completion. So does that mean like we are less than 20% complete on the project? Or just trying to understand how that accounting works?

P
Padam Gupta
executive

You see the first phase of the project is always be structural. And unless you have [indiscernible] being a high sensitive application, the electromechanical work does not happen in tender in progress. So you are right that there has been a spillover in completing the structural work due to [indiscernible], local factor, labor issue. So definitely, first phase is now targeted by December, January, as Ankit has said in his presentation over it. And although we have committed CapEx of about INR 450 crores by now, but the spent amount is like that, paid out amount. And we had to account revenue on a paid out value basis.

U
Unknown Analyst

Understood. Okay. And just one more thing. So is the -- do we still anticipate the same cost for the project? Or is there any escalation on that due to delays? Or -- just any color on that?

P
Padam Gupta
executive

There may be some [indiscernible] rather because commodity cycle has so far. And a lot more equipments are now competitively available than earlier. So looking back, I will say that there may be a saving of 5%, no escalation of that.

U
Unknown Analyst

Okay. Okay. Got it. And so when are you looking to have a partner in place -- like last time, you mentioned that you would give more color in the next call. So just trying to understand there that stands. Also you mentioned that you might also consider selling the entire project out to some interested parties. So I just wanted any update on what kind of talks are going on?

P
Padam Gupta
executive

We are presently in -- NDA in place and a cooling of period with one large investor and due diligency in progress. We are not authorized to disclose more than this.

Operator

We have a next question from the line of Gunjan Kabra from Niveshaay.

G
Gunjan Kabra
analyst

Sir, I just wanted to confirm, what's the kind of order book have we closed this quarter and the bifurcation of the total order book, in terms of EPC and transmission, if you can specifically mention?

P
Padam Gupta
executive

We have got one order of Kannur from [indiscernible] already in hand. And another business, as I told you of INR 150 crores is in [indiscernible] where we are held L1 and [indiscernible] those orders should be received by end of this month or may be mid-[indiscernible] September.

G
Gunjan Kabra
analyst

Okay. So sir, what's the total order book right now?

P
Padam Gupta
executive

About INR 4,000 crores plus/minus.

G
Gunjan Kabra
analyst

INR 4,000 crores plus/minus, okay. And sir, first on the segment of [indiscernible] of INR 1,400 crores of order book that we have, how much have we recognized it in this year -- how much are we recognizing this quarter? And are we expecting to recognize as per your previous guidelines, most of it in this year only?

P
Padam Gupta
executive

No, I have gave a guideline of most of it [indiscernible]

G
Gunjan Kabra
analyst

In 1.5 years, I mean, this year and the next year.

P
Padam Gupta
executive

It's a 2-year order. This quarter contains INR 50 crores out of this vertical and we are hopeful of the -- state government is facing elections this year, if there is more financially we are hopeful of doing INR 500 crores this year. Otherwise, it may be little less.

G
Gunjan Kabra
analyst

Okay. Sir, are you also seeing any new order pipeline in this segment?

P
Padam Gupta
executive

Yes. There are, but it's a bit slow in the season making -- there is more [indiscernible] with the buyers as it was visible 6 months back.

G
Gunjan Kabra
analyst

Also, on the AMI segment, I wanted to understand that this order, which is -- of the Jammu & Kashmir order that you have got it was supposed to be executed by December. So with so many margin, so I wanted to know how does the model of revenue recognition, if you can explain, how does the revenue recognition happen? And what stage do we get orders like, for example, it's only smart meters projects being awarded in the last quarter. So what's the share that we are targeting because there are a lot of businesses doing their own EPC project, and there are other big AMI players also getting new orders, so how are we targeting? And how are we placed? And how does the revenue recognition work in this model, if you can explain in terms of accounting also in terms of execution?

And I also wanted to understand if there is a smart meter order getting tender to the smart meter players then what's the lag between the AMI players who are executing the project, getting those orders?

P
Padam Gupta
executive

You see, firstly, your question -- multiple within a question. booking in this segment [indiscernible] the contract. Till such time, you are eligible per meter per month revenue from [indiscernible]. That particular meter is not considered that eligible for revenue. So far that process is defined that meter has to be involved a lot with communication modules, having [indiscernible] gateway and loaded with softwares called [indiscernible], which are further housing data centers on our cloud as required by the -- and they have to [indiscernible] work with a [indiscernible] module of the utility [indiscernible] consumer is all configured properly.

If we are able to build that consumer, they will not give you approval as a set of that very meter. So it goes like that. Now the depending on the size of the orders, a lot size is defined by -- there are a lot of crack noise man, can you check it?

Operator

SP1.

Gunjan, [Operator Instructions] You can keep it on mute when you're not speaking.

P
Padam Gupta
executive

Yes. Going forward, a lot size is defined by each utility in the order like the one we are doing for 2.5 lakhs meter now to be over by December, the lot size given is 12,500 meters, per lot. So that is now the making of lot size is to be taken as a commission. So by now, we have completed work for about 1.2 lakhs meters already in Jammu & Kashmir. And will be complete by 2.5 lakhs meter by December. And presently, the pace of work is almost about you can say, no less than 2,000 to 3,000 meters per day in installations.

So this is how it goes. When our SPV is able to achieve that with the utility, it provides the same approval back to back to the EPC partner, which happens to be the parent company in our case. To be conservative, we want to align all this on back-to-back basis. Unless SPV is eligible for revenue, there is no good idea to book revenue in the parent company. That is how we don't build to the SPV [indiscernible]. So we've been out only that SPV becomes eligible for revenue for those many meters, which, in August, we have already achieved our 1 lakh meter already. And we are hopeful of achieving it for 1.5 lakhs meters by September end.

G
Gunjan Kabra
analyst

I also wanted to understand, suppose we are like 3 segments, right, SGD -- sorry, EPC, which is SGD and then we have transmission and AMI and then data centers. So in some segments, if there is a slowdown in orders, say, for SGD, is the employee capability fungible to cater to the higher demand which is coming from maybe AMI or transmission sector? Or how does this work? I mean in terms of employee costs or something if you can explain?

P
Padam Gupta
executive

Ma'am, in our industry, the manpower is inter substitutable to a limited extent, not the whole of entire venture. The specialists are at par given vertical only whereas there are full of the staffs, voting those specialists who can be deployed on multiple applications from one use to the other, like staff like commercial, staff like vendor development, staff like HR or even accounting or tax compliance or field management, you have a lot of flexibility, but not in the specialist role as conceiving scheme, layout, detailing and specifying equipment parameters. So that is especially [indiscernible]. So specialty [indiscernible] is all specific to the vertical, whereas detailing growth, there is a lot [indiscernible]

Operator

We have a next question from the line of Sarvesh Gupta from Maximal Capital.

S
Sarvesh Gupta
analyst

Sir, just wanted to understand this 7.8% consol margin that we have received in this quarter. So you said that some of it might be due to the AMI EPC third-party work. But [indiscernible] of that, how much it will be, sir? And how much is the AMI EPC third-party work that we have built this quarter?

P
Padam Gupta
executive

No, I could not question -- your question itself as an answer to my mind. The consol numbers are third-party work, you can take it. And expenses are also matched as an established side expense, I would say, our goals are meant for all verticals of the company, including data set [indiscernible] by third party, et cetera.

S
Sarvesh Gupta
analyst

So how much is that? I mean, I just want to understand that for our -- if you remove the AMI and the [ DC ], which you rightly said are upcoming businesses and they might be in losses. How much for our regular EPC business, what has been the margin profile for this quarter?

P
Padam Gupta
executive

At least 13%, you can take another 5%, 6% is out of the AMI business. So you go by stand-alone that will give you the true picture, as I stated here. Because there the expenses are more appropriate than in a consol level because consol level as I earlier explained to take away confusion was that the subsidiary are today not operational, they are not just generating any revenue. They are not any -- they have not made any CapEx, capitalized any of the revenues. So that is why you might be [indiscernible].

They are not consolidation of matured businesses, operating businesses. There are still other installations.

S
Sarvesh Gupta
analyst

So there is some OpEx in these 2 subsidiaries, which we are booking and that is why consol is showing a much lower margin?

P
Padam Gupta
executive

There is no OpEx here. It is all cost in AMI, no billing has been done by [indiscernible]. So no cost. In data sector, some costs are directly incurred by that, some are incurred by the payment on their behalf. But costs are all taken as a out-of-pocket cost only with the third party. So [indiscernible] of our overheads [indiscernible] cost other related costs.

S
Sarvesh Gupta
analyst

Understood, sir. And sir, in this difference between consol and stand-alone, which is around INR 72-odd crores for this quarter. How much is AMI and how much is data center, sir?

P
Padam Gupta
executive

This is 95%, you can take AMI, 5% data center.

S
Sarvesh Gupta
analyst

Okay. Because last quarter, sir, we were -- had said that of the INR 540 crores of DC order, we had invoiced INR 120 crores last quarter only. So this quarter, why has it dropped to less than INR 5 crores, INR 10 crores?

P
Padam Gupta
executive

That was all data centers, last time.

S
Sarvesh Gupta
analyst

Yes. Yes.

P
Padam Gupta
executive

It's cost to cost, we are not preferred to book any costs. Whereas in AMI, we actually did 50% profits. So we prefer to take that in the books over the data center. Data center for we'll see happening in third and fourth quarter now.

S
Sarvesh Gupta
analyst

Okay. Okay. And one question on the order book. So you are saying that -- so we have INR 2,000 crores in AMI and L1 and INR 1,500 crores in transmission in L1. Is that right, sir?

P
Padam Gupta
executive

Not L1. I can say that about -- out of this INR 350 crores in this quarter, we have booked already. We have got the order.

S
Sarvesh Gupta
analyst

So INR 1,150 crores in L1 in transmission and INR 2,000 crores in AMI?

P
Padam Gupta
executive

Right. AMI precise number is about INR 2,350, that way you should take that.

S
Sarvesh Gupta
analyst

So Around INR 3,500 crores, we are in L1 basically?

P
Padam Gupta
executive

Absolutely.

S
Sarvesh Gupta
analyst

And then -- so this INR 3,500 crores is in L1, INR 4,000 crore of order book we already have got. And then in -- then you have a bidding pipeline where you expect another INR 2,000 crores to come?

P
Padam Gupta
executive

Right.

S
Sarvesh Gupta
analyst

Understood, sir. Sir, the other question was that like in FGD DC, so we are seeing delays. And as you mentioned that the client side, they're also waiting for the cost to come down because of raw material prices easing out. So are we also sort of slowing down things from our side in both data center and FGD, so that we can be able to procure at much lower prices and make higher margins on these contracts?

P
Padam Gupta
executive

No, it is not fair to include data center into FGD because FGD is always the EPC business. which is as much client or contractor deeper. So it suits both to bring down the cost. But in data centers, we look for revenue. If it is -- overall IRR is good, why will you mind marginal extra cost of it?

S
Sarvesh Gupta
analyst

Okay. Because most of the call there also will be your electromechanical stuff. So...

P
Padam Gupta
executive

Sooner I complete and become revenue entity, more value that asset has acquired. So why I would like to delay data center?

Operator

We have a next question from the line of Abhijit from YES Securities.

U
Unknown Analyst

My question is on the AMI business. So we are executing a 2.5 lakhs order in J&K and we are L1 in INR 2,000 crores. Another order for Jharkhand and Kashmir, so sir, I wanted to understand what is the total opportunity size that we're looking at going forward, maybe some other states coming up through ordering. So in the medium term, like 2, 3 years, what is the total opportunity size in the AMI business that we're looking at?

P
Padam Gupta
executive

Sure. The Government of India has announced a target of 250 million meters. That is a very, I will say, ambitious target over next 5 years. So that may -- and out of that, our takeaway is now more than 100 million may happen as far as our take rates. So we are looking for no more than 5 million out of it considering next 3 years.

U
Unknown Analyst

Okay. So we are looking at a number of 5 million over the next 3 years?

P
Padam Gupta
executive

Order book over 3 years to be executing [indiscernible] over 5 years.

U
Unknown Analyst

Right, right. And sir, I mean, right now, what I can see is we are present in J&K and we are also like L1 in J&K and Jharkhand. So these are two states. So some other states that you're looking at penetrating into this AMI business?

P
Padam Gupta
executive

Yes. We are definitely looking on more prospective states, bidding is still pending. And we now are also learning how to harness more potential out of smart meter more than nearly use smart meter for [indiscernible] or energy billing. So this subject will upgrade as an application going forward technologically. So it will go beyond meter. That's what I like to say.

U
Unknown Analyst

Understood, sir. Also, sir, on the data center business. I mean we talked about two options. One is to be a part of a JV or something and the other is to completely sell the our interest in the asset. So sir, how -- what is the thought process behind this? I mean do we want to be a part going forward in the asset or we want to completely sell it off?

P
Padam Gupta
executive

Look ultimately, we are an EPC company by core. Our idea is to develop data centers for ourselves as well as for third parties. The first data center, we took up as [indiscernible] earlier in [indiscernible] to prove that Techno is capable of doing in this space, which was not accepted by [indiscernible] I would say [indiscernible] because we had never done work in that space earlier, like or this [indiscernible] company which is [Foreign Language]

Operator

I'm sorry, sir, his line is disconnected.

P
Padam Gupta
executive

In Bombay, this -- yes, I'll come back to you after some [indiscernible] day goes out of your buying, [indiscernible], I mean. These two are the leading companies in the data center space. So both have become relatively [indiscernible] out in this space because they are not very large value and they have multiple faculties as a G&A to be additionally and requirements of the owners are very stringent. So that makes good business sense for technology, and we were keen to put that. So that is how it is. So we don't mind for us, both opportunities are like whichever gives higher delta, we locked for that.

U
Unknown Analyst

But we are also looking at it as a sustainable EPC business, the data center?

P
Padam Gupta
executive

[indiscernible] Absolutely.

Operator

We have a question from the line of Naveen Vijay from NS Capital.

U
Unknown Analyst

Sir, my question is on the data centers. Unfortunately, Ankit looks to be disconnected. But I just wanted to know, is there any other locations apart from Chennai where we have bought the land and started breaking the ground, sir?

P
Padam Gupta
executive

Not yet. We are awaiting land allotment and handing over in Kolkata next, and we are ready to have a data center in Hyderabad location. So we want to do around 250 megawatts as we have announced by 2030. And we are finding it is feasible to achieve the structure. And even Tier 2 cities are getting popular now with IT companies. So that will obviously give us a nice choice, also to be there.

U
Unknown Analyst

Got it. And my second question is on the AMI business. There seems to be some additional receivables that might get added on if we start the platform kind of a business, how do we plan to tackle that, sir? Do we do discounting with the financing company? Or is there any strategy that you have thought on that, sir?

P
Padam Gupta
executive

Yes. At the moment, we intend discounting only with the finance company or we have our own -- a lot of cash to deploy. We will see how competitive we are able to achieve that loan. And even investors are approaching us to invest in our AMI to acquired majority position like GIS has done with [indiscernible] or [indiscernible] has done with [indiscernible] Power. So those investors are approaching us also in the market. Let's see how it pans out.

U
Unknown Analyst

Okay. And my last question is on the FGD business. It seems to have lost a bit of traction because the deadlines keep getting postponed. So how do you see that going forward, sir?

P
Padam Gupta
executive

No, it does not impact us per se financially because all contracts have its own price variation clauses, time over compensation clauses. So we deal the situation as it evolves appropriate.

Operator

Mr. Ankit Saraiya is back on the call. If you have any questions, sir, you can go ahead.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments. Over to you, sir.

P
Padam Gupta
executive

You see, it is always saying -- closing is always a painful. What I will say, I will only say that from current quarter onwards, you can expect a topline of INR 400 crores minimum, if not INR 500 crores in the last 2 quarters as we anticipate. And as I stated, again, I will retreat the [indiscernible] in Techno Electric has happened. And the future is definitely larger than we could have ever believed this market will be visible to us or available to us, which was used for last 3, 4 years, I will say. .

So a lot of new wave of growth is there in Techno in this space, [indiscernible] space. We will be announcing more technology-based solutions, which this sector will need, and we will be part of it other than multinationals. So thank you all for joining the conference call with us. In case you still have any queries related to our growing journey in this space or performance, please drop in the mail to us and do visit our office, wherever you are in Kolkata or in Delhi or anybody wants to visit our data center. So we'll be very delighted to host. Thank you very much.

Operator

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.