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Techno Electric & Engineering Company Ltd
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Ladies and gentlemen, good day, and welcome to the Q2 FY '22 Earnings Conference Call of Techno Electric & Engineering Company 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. The 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. Thank you. And over to you, sir.
Thank you, Pooja. Good day, everyone. On behalf of Asian markets, we welcome you all to the 2Q FY '22 earnings conference call of Techno Electrics & Engineering Company Limited. We have with us today Mr. P.P. Gupta, Chairman and Managing Director; and Mr. Ankit Saraiya, Director representing the company.I would request Mr. Guptaji to take us through an overview of the quarterly and half year results, and then we shall begin the Q&A session. Over to you, sir. Guptaji, thank you.
Very good afternoon to all of you and wish you a very Happy Diwali, Chhath Puja and all festivals, Dasara, Ganpati Chaturthi and welcome you to discuss our financial results for the quarter ending September 2021 and half year ending of year 2021.Anything said on this call which reflects our outlook for the future of that would be construed as a forward-looking statement must be reviewed in conjunction with the risks that the company or very industry segment in which we operate faces.Now let me quickly summarize our performance. The total revenue in Q2 stand at INR 273.5 crore, which is almost around 45% higher on Q-on-Q, quarter-on-quarter at 6.5% over year-on-year. The revenue from EPC is at INR 225 crore, similarly which is around 40% higher on quarter-on-quarter and 1% over previous year.[ In this ] business, revenue is at INR 48 crores compared to INR 33.75 crore last year, which is up by 42%. The [ season ] has been good this year compared to last year. EBITDA for the company stood at INR 85 crores in this quarter compared to INR 75 crore in the same period last year and up by 54.7% quarter-on-quarter at 13.4% year-on-year.The operating profit for the EPC segment similarly is at INR 41.35 crore, which is very similar to the last year. The other income for this quarter is at INR 10.28 crore compared to INR 50 crore last year, which include -- last year income included one-time profit from the sale of our Haryana transmission assets, comprising of INR 28 crore of capital gain and dividend income of INR 16 crores approximately.Profit before tax for the quarter was at INR 84.35 crore compared to INR 70 crore last year if we adjust for the one-time profit, up by 20% and INR 16.29 crore quarter-on-quarter, up by 40%. That for the quarter was at INR 63.48 crore compared to INR 52 crore last year after adjusting one-time profit. That implies it is up by 40% quarter-on-quarter and 20% year-on-year. The EPS for the quarter is at INR 5.7 crore.Similarly, now taking up our half year results, the revenue for the first half year is at INR 463 crore, which is up by 8.5% year-on-year. The revenue from EPC sales is INR 388 crore compared to INR 375 crores last year, which is around 3.5%.Revenue from wind segment is at INR 75 crore compared to INR 52 crore last year. EBITDA for the company is at INR 140.62 crore, up by 17.5% year-on-year. Operating profit for the EPC segment is maintained compared to last year, which is more or less same at around INR 75 crores. The operating profit margin for the EPC segment for this half year is at 18.9% compared to around 20% last year. The operating profit for the wind margin -- wind segment is at INR 67 crores and -- which is roughly around 89.55% compared to 84.5% last year.The other income is at INR 27 crore compared to INR 64 crore last year. As well as the other income includes the one-time income. If that is taken off, then it is very comparable. The profit before tax for the half year was at INR 145 crore compared to INR 116 crore last year, up by 24%. Profit after tax stood at INR 9 crore compared to INR 27 crore last year if we take out one-time profit, [ EPC ] at around INR 10 crore.The current investment revenues, including cash in hand, for the quarter ending September 2021 is at INR 850 crore. We have received new orders, the collection has started in the market, which is roughly around INR 500 crores in this quarter and around INR 575 crores in the first half. The unexecuted order is around INR 2,000 crores.The outlook is much better than what we have achieved. It seems COVID is behind us and now we can look forward to life as normal as possible. We expect a large business out of FGD segment. We led one in more or less around grids worth INR 20 billion [Technical Difficulty] and Rajasthan. The FGD segment will continue to be in focus for the next 5 years. As per notification of Government of India, all coal-fired thermal plants need to [indiscernible] as notified by the pollution department by December '24.There is a considerable progress with CPSUs in placing the order and for the implementation of the same will be happening now by [indiscernible] sector. We expect business of around $15 billion in this year and this level of business will continue for next 3, 4 years as 50 gigawatt is yet to be ordered out by the [indiscernible], the remaining CPSUs, mainly SUVs, at private sector.The transmission segment, we expect a kind of status quo from the transmission side. It will be limited largely to the evacuation of the renewable power. [Technical Difficulty] is bidding for 66 megawatt of renewable power out of the target of 175 megawatts, which is expected to be completed by December '21. Again, the bid submission dates have been extended over last year. We plan to bid for at least 5 projects totally to about INR 2,500 crores in different states in partnership with some of the emerging entities.The Union Budget, but there is also a new QR now in place, which also entitles us based on our construction sites. As the Union Budget allocates INR 300,000 crore for power distribution to be released over 5 years and fund will be based on the viability, demonstration and financial performance by the distribution companies. We are seeing good interest of large investors invite funds to participate in intimacy with which by making a company significant partner. If you [indiscernible] capital and with help of more projects in wind segment.On the distribution side, we see a lot of activity happening now, particularly in case of regrade automatic smart meters and also the power distribution networks to be strengthened along with it. The main aim of the Government is to improve efficiency and contain losses so that [indiscernible] could be improved.And we had mentioned earlier also that we are interested on the project in the state of J&K for 6 lakh meters, where we are already executing project for 2 lakh meters. Apart from this, there are leading in media -- number of proposal plan in the market now to grow these projects where part of the funding will be made by investors. The Electricity Act amendment is also shaping, which is going to be a big, big reform in the sector and is being awaited for many years. And Government would definitely like to eliminate loss auctioning and payment of -- and subsidy will also be paid directly to the deserving for maybe like agriculture sector, et cetera. We are very hopeful that power sector is at a very critical juncture and something should have going forward.Wind segment. We are pleased to announce that we have received our major outstanding from the discounts that is up in Q '20 under PFC REC funding scheme of INR 1.2 billion. We are also pleased to announce that after recent order of [indiscernible] certified CRC order in June 2020 and now revised CRC previous order dated March '17, wherein the trading on RDCs will be reserved with the floor price of INR 1,000 and price of INR 2,400 as usual. We are hopeful that this loss of 1.5 year will be made good by the RPO compliance happening in the next 4 to 5 months.And whatever stock of inventory we have in hand, we should be able to liquidate by March 2022. As committed in last quarter, we will be receiving -- recovering our performance from last year and shall be executing at least 50% of planned execution of the backlog during the year. And we definitely will see the growth in the year '22, '23. In the coming years, we see stock cost after reforms, based on efficiency, stability and reliability of our supply, cost of power, the improvement of overall financial and government sector. That focus will continue on the power with related infrastructure at each corridor. You can recollect that your company has been [ frontrunner ] in these corridor constructions. The transmission infrastructure required is for 500 megawatt over next year, our first turnover in overseas market. So it includes expansion of further business from the market of what we cover.Data centers. COVID-19 has impacted our lives in multiple ways but one positive outcome of this is the growth in the digital space. With the growth in digital data and also backed by IT posture and localization of data, it is expected that third-party data center industry could grow significantly from the bulk level of 500 megawatts to 2 gigawatts in next 2 years and about 5 gigawatts over the next 5 years. Till date, most of the data centers are located in Navi Mumbai and Mumbai. But now for last 1 year, Chennai has become the hub of traditional mixture of unlisted data work. Near term, Adani entity are already in the process of setting up own data centers at Chennai. Techno is largely in advanced stage of setting up data centers of 5 megawatts to 30 megawatts IP load of [indiscernible] data vendor for which the master plan is ready, as already said that, that we acquired and we are hopeful to start the construction at this point.Additionally, we tentatively resumed the operational wind power of itemized megawatts to classify the data center as far as the peripherals which aligns with the policy of major scale customers because of their ESG commitments. With CapEx of over INR 800 crores, say, 60, 65 [ caterers ] is always a electrochemical watch, which is the announced project capital investment of Techno Electric. We'll be able to give you the extra piece after we achieve such works, not only about Techno but also about our projects.With this, I just covered most of my part of the presentation. Ankit, would you like to add something?
No, I think we'll take on the question and answers. And if there's any clarification required, we'll address it at that point.
[Operator Instructions] The first question is from the line of Sandeep Tulsiyan from JM Financial.
Sir, first question is on this order inflow numbers that you shared of INR 500 crore in the current quarter. If you can share some more details, which were the larger orders that you have received in this. And I also heard in the opening comments that your order inflow expectation for the current year is around INR 2,000 crores. I just would want to reconfirm that number.
Absolutely. You see during this quarter, we received a very prestigious order from [ Parkgate ] to set up a GIS substation at Mohan Ganj in Lucknow City at INR 200 crores. We got an order from KSEB to set up 2 220 kv GIS station in the state of Kerala. We got the order from Sterlite Power for a soft project, one which has been KSEB, that is about INR 75 crores. And we have been further released orders by RDC and PDC worth about INR 200 crores by augmenting PMDB works. So this in total, if you put it, it will be around INR 490 crores.
Got it. So KSEB order was what value? Sorry?
Which one?
The KSEB 220 kv GIS station that you mentioned?
It is INR 83.6 crores.
Got it. All right. And sir, the annual order inflow number estimate is, what, INR 1,500 crore or INR 2,000 crores? I just got confused.
INR 2,000, sir. We are already aligning more than INR 2,000 crores in FGD order, which is going to be the major flow of orders as I've been talking. It's taking a bit of time to finalize both with DVC, State of West Bengal and State of Rajasthan, where we are actively involved, and we are L1 in all these tenders. I am very hopeful that by January next we should be able to have these orders in hand.
All right. So sir, if you can share some more color on the FGD orders, where are they now in terms of pricing on a per megawatt basis. And as you mentioned, so DVC, WB and Rajasthan, the major states, so there are no orders coming in from the private sector as yet.
You see the private -- they do take offers from us, enquiry from us, we don't list that till we receive the orders, but still follow the process. You are more sure of the process, as such, we are able to discuss that. But private also have taken a number of offers from us. And we are serious to work with one or 2 of them. But I will not commit it may happen now or it may take time. But simultaneously, there are 2 impacts we are facing, sir. One is the smaller capacity projects, the bulk megawatt costs proportionately becomes higher. So there is no one set of costs. Cost per megawatt, which is valued at, say, 660 megawatts set is different from 500 megawatts set, and it will also differ due to [indiscernible]. So that is number one.Number two, definitely, commodity cycle have also impacted the cost per megawatt but most of these centers do have a PV clause, which we generally don't quantify. That PVA cycle that is sufficient is utilized. But in the new tenders, obviously, there is an impact of almost about 20% on account of commodity price hike like steel, copper and many other and related industrial materials. If you ask my takeaway, depending on the configuration and cost flattish now, earlier if we used to say that cost per megawatt is around 55 to 70 megawatt, it has definitely gone up to now 75 to 90 megawatts.
Okay. Got it. And one last question from my side before I get back in the queue, will be on the update on that ICDs, which you were expecting. Any status update on that, by when will it be released?
Okay. Yes, there's a significant improvement. We have secured the pipeline, got all the money, number one. Other's also, DHFL money has come in. So that is another positive. And other's also in the pipeline, we are very confident to resolve these issues by close of the year.
So what is the balance amount, sir, if you can share what has come in and what is spending?
The balance about now if you ask me is no more than INR 100 crores.
The next question is from the line of Deepesh Agarwal from UTI Asset Management.
My first question is, in October, there was a bidding by NHAI for a solar project. And therein you had participated, so what is the thought process? Are you looking to deploy your cash and own the solar assets or you're looking at solar as an EPC opportunity?
See, firstly, we are at the moment not a participant in any of the project nor we are a participating in it, number one. We are only looking for buying solar power for our data centers or evacuating -- creating a transmission link to evacuate solar power being set up by companies like Adani Power or declare other companies in renewable power space, I will say, that we are going as -- to be a renewable power generator in this market at the moment. If at all, we get it to down [ 3 points ], it will be best for our uncap issues, but definitely not safe to the grid or to our utilities. Our experience have been very bad in the past.
Understood. Understood. Secondly, on the wind assets, what is the outstanding receivable right now? And what is the timeline for the monetization of the same?
You see. At the moment, we got our money about INR 120 crores from PFC REC under [indiscernible] scheme of INR 1.2 trillion announced by Government of India [Technical Difficulty]. So the present outstandings are, again, as of today is about INR 100 crores. Additionally, about INR 50 crores by liquidating our RDC certificate, which was on hold due to the trading ban in July, which now stands settled in our favor that the order of CRC making floor drive zero stats set aside at the old floor price of [Technical Difficulty] will start from this month, from 24th of November, the first trade happening [Technical Difficulty].
So by when do you expect to get this outstanding INR 100 crores from the customer?
Million-dollar question, sir. These are all challenged financially. I'm sure to say [Technical Difficulty] tariff, all RDCs should come forward. But with the change in government in Tamil Nadu, we also hear that they would like to clear it before March '22. It is also hurting according to us. That government [Technical Difficulty] terminated, we paid in time.
Understood. Understood. And thirdly, what is the status on the strategic tie-up for data center?
It is all in discussion. Ankit, would you like to update?
Yes, we are under discussion with multiple data center operators based in Singapore and U.S. And the discussions are ongoing. They are getting deeper. And we're hopeful that we'll have some strategic tie-up by March '22.
Okay. Okay. And lastly, if I can squeeze one more. On the smart meters -- on the smart meter side, there is a lot of CapEx, which is likely to happen. So how far we would be from seeing a large order ring happening out there?
See, we will be very selective and choosy and will not like to commit to more than INR 500 crores to this additional segment between you and me at an even point of time. Like presently, we are doing 2 lakh meter, which is purely a EPC contract. Next 6 lakh meters, we'll have 40% component from the supplier side, which should be paid over 5 years. So our takeaway will be that we like to see top-line contribution from this segment of almost around INR 200 crore to INR 250 crore a year and with the financial exposure no more than INR 500 crores.
The next question is from the line of [indiscernible], an individual investor. As there is no response from the line of Mr. [indiscernible], we'll move to the next question, which is from the line of Sandeep Tulsiyan from JM Financial.
I wanted one clarity on the wind segment revenues of INR 48 crores in the quarter. Are there any one-time receipts that we have gotten factored in or this is purely the wind power generation revenues that we have booked?
Balance sheet is always based on revenue and not of collection. But definitely, in this quarter, we collected also about INR 62 crores from REC PFC, but this is clearly based on revenue booking [ APAC RDS ] generation.
Based on -- I mean, if you back calculate, we have typically not reported such high PLF historically in second quarter. So that's the reason I wanted to check on that.
Second quarter is the -- rich season is always the second quarter year-over-year, if you will look on it. And this year also, there's been a robust year because of the cyclonic weather and lot of depressions along the East Coast. So we have benefited out of that. And we -- just this year, we will be generating the power as good as 13, 14 -- around 250 million. As of today, we have already generated 210 million, sir. It is almost about 7%, 8% higher than last year's, you can say, in mid-terms.
And second part was on the EPC segment. Sir, we see raw material prices have gone up. How should we look at it from a margin perspective? I know we have always guided for margins in that 16%, 17% range, but we have been delivering higher margins of 17% to 18% in the last 2 years. So going forward, with this raw material cost pressure, do we go back to that 16%, 17% range or we still continue to deliver the current margins what we have been doing?
Sir, our guidance has always been 15%, which will be -- and because of GST, we do make -- because the base line becomes lower, so percentage becomes a little different, to be honest. Other way, you take it at 15%, by and large. And this commodity price line is, most of our contracts is defended by PV volumes in the contracts. So they generally neutralize, they don't benefit you, but they do neutralize you as a way of life. But we have to constantly see across our LTE networks as government has submitted now 6 months on account of COVID. So all LTE networks got really cost strained.As usual, Techno is a very hand on when it comes to operationally the management had cost for maintenance. So we are able to hedge this at -- you can safely take 15% as the overall market for the year.
So 15% pre-benefit of GST. So post benefit should be that same 18% what we have been doing? Is it?
No. I would say that you take 15% on [indiscernible], less GST because it is not a part of a book. Earlier on as such, but it may not happen in future. So overall, we should gain around 15% as an EBITDA, operating margin, whatever to say.
EBITDA, okay. And lastly, sir, in terms of order inflows for the year, which where we are guiding, sir, this INR 2,000 crores, if you can broadly segregate, I mean, smart meters, FGDs and the base T&D, how much you're building in? And have you built in anything on the data center in this or not?
No, it does not include data centers order, because that is our in-house, number one. INR 2,000, we have been only talking of utilities business, which largely comprise of INR 200 crores for smart meters, about INR 500 crores for transmission and another INR 15 crore for GDP. That is the break up we carry between us. Data center business will be add-on to it.
And this is -- basically we are expecting 2 out of 3 FGDS, so INR 1,200, INR 1,250 out of...
Now it is 2 out of 5, [indiscernible] we should get 2 out of 5. It's not 3 out of 5.
[Operator Instructions]
Kamlesh here. Guptaji, I wanted to understand, you touched upon the bidding pipeline under the joint venture route for the projects. Can you just share some more details, how is the pipeline looking and what kind of biddings we are looking at in terms of the newer projects?
This is basically a TBCB participation in a JV route. But with the recent amendment, which we got only a week back, now we are qualified of our own. Because they have made eligible the construction experience also in these systems. If you have done INR 500 crores of construction in last 5 years, so you are also eligible to bid in these practices. But just you know that the market is extremely competitive, it's basically like solar is a [indiscernible], where I doubt personally that Techno will win. They are going to -- of adding significant competition unless it's a very strategically located pocket where others may not have interest like we did Kohima, Northeast package, which we are now handing over to CRP in a month's time. So those kind of strategies are coming up now on the balance sheet side as well as to the main renewable evacuation packages. So we have good performance in that Sterlite or Adani, we have EPC because now they need a project to be done in 15 months as against 2 years or 3 years earlier as the industry norm is. So all put together, I will say that we will be able to -- rather we may or may not, we need a bid. But definitely, we will get EPC business from any developer who wins that bid. We will definitely remain a preferred supplier for them at EPC.
But are we looking at deploying our own capital and bidding for our own project as well, sir?
Yes, we will be taking a chance, as I told you here and there, which we will believe will be a difficult pocket where others may not be. So those kind of opportunities do keep coming one or 2 in 10. If there are 10 bids, then 1 or 2 bids are always we can opt. Like with Sterlite, we got a breakthrough in Nangalbibra in Assam, which is crossing Brahmaputra, but I'm only doing -- but Satellite will be doing that crossing. So we do support that at the time of bidding itself so that they succeed and it becomes a back to back comfort watch. Like we were back to back partner of power grid when it came [indiscernible] we succeed with that. Already we have completed Nagpur [ Sambal ] for that. So it became a very mirror image project in the state on an ongoing basis. So those kind of relationships of Techno is very strong in the market and we adjusted for our time, we had quality performance.
The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.
Sir, just want to understand, on the Kohima project, you mentioned you're selling it to CLP. So what are the pending milestones as of now?
Only if you technically ask me nothing, but major one is we have to get officially [indiscernible].
Sir, pardon my ignorance. So if you could help us, what is 281?
It's generally a procedural requirement that when you're part of a fixed asset from your books, you need an income tax department consent audit.
So the approval from the Central Government, the Union Government has now been accorded.
That all has been obtained. They are all obtained. Lenders approval is also obtained now. So we are hopeful to compete in this month, failing which December latest.
Understand. The second question was, you highlighted that the transmission TBCB has become extremely competitive. Now when the developers win the project at such competitive tariffs, they usually try to pass on the buck on the next value chain of EPC or equipment. If you could just comment on the margins or the profitability on the EPC side, are these developers able to pass on and companies like are able to maintain the profitability?
Sure. I always maintained profitability is something which is a very dynamic journey of any EPC company. It is linked to the quality sourcing, optimal engineering, time bound execution, wastage management, productivity management, you see, no doubt markets are competitive, all are flattened out. Now there is no more special margins for the developers or equipment suppliers or EPC, they are all on the same line. But still experience helps you. Your maturity in business helps you. You make some money more than the competitor. And that is the experience all about. If I cannot make 5% more than my competitor, that's my tall challenges in adding [indiscernible]. Can I qualify myself as experienced company over others?
Understood. I appreciate it. The last follow-up on the same lines, because a couple of the transformer companies did highlight about the increasing lead time because of surge in the demand conditions, wherein earlier the transformer could have been delivered over a 3 to 4-month time frame, now the lead time has become as high as 14, 15 months, and the underlying value chain has become really tight. And consequently, we are talking about better profitability. So on the value chain, on the equipment side, how are we seeing now? And are we seeing that after the imposition of quasi-ban on the Chinese with respect to the border areas, neighboring areas, are we seeing tightness on the EPC or on the equipment chain and that can have some impact on our profitability?
Not at all, number one, is one line answer. Because we have sufficient capacity now in India, which we have built over last 5 years for GIS site and transformed by over last one decade, more or less I will say, in this country. We have a capacity of almost 500,000 every year now, by and large. The threat which transformer people are telling you is another way of expressing the same thing that we are all becoming cautious of the IDC cost in the process of setting up of these packages. We want to bring the equipment at site, which you can put to use immediately on the seat at site. Like transformer is one large value shipment, which earlier we show the top line used to bring at least 6 to 9 months before requirement.Today, we bring only one month before the requirement because it is the last equipment at site to integrate into the value chain. So this is how everybody is re-arranging his finance, cash flows, cost of finance as well as productivity gains associated with it. When everything else is ready, your control room is ready, ablations are ready, all enabling works are ready, bring transformers, put it on the foundation and make it ready for charging in 2 months. When you need date one to audit as we used to do earlier. You see, so a lot of things that's innovated, I do not say, like there is some kind of compulsions around you. So it is a natural process of improvement. Like in automobile, they have family shops only. Everybody -- every supplier warehousing is done by the supplier itself. And every week, he gets the component in his [indiscernible]. He does not carry more -- any inventory in auto shops. So similarly, we are also learning and innovating how to rearrange our sequence of supplies, readiness of the seat of supply in the field, related works in the field, optimized way of creating facilities in that field. So let me carry on challenging growth in any business. As you mainly felt, we will survive, sir.
The next question is from the line of Amber Singhania from Nippon India Asset Management.
Sir, just 2 things. Most of the questions have been answered. Just 2 small things. If you can just give us some color about the total CapEx required for the data center on an annual basis, FY '22, '23 and '24 and will that include just Chennai or there is other side also which will be counted in that?
Ankit, would you like to take this?
Yes, sure. So the total CapEx requirement for the data center in Chennai will be approximately INR 1,000 crores. And I think one can assume that the CapEx by the time we commission in March '23, it will be about INR 500 crores. And post that, maybe gets divided into somewhere around INR 200 crore to INR 225 crore per year for the next 2 to 3 years.
Okay. And out of this INR 500 crores, mostly, it will go into FY '23 only, right?
Yes. And the remaining INR 500 crores will be divided among the next...
It will be '20 to '23 -- not '23 -- ending March '23.
And Ankit, any color on the other site which we were planning, will that also go towards construction from FY '23 or prior to that?
We are hopeful that we should be able to bring another site into construction by December '22. Depending on the allotment of land from the state government, we are awaiting favorable allotment from them over the next quarter. And once the allotment is finalized, hopefully we'll be able to take another data center into construction by December '22 or maybe first quarter '23 calendar year.
Just one clarification on the current order book of INR 2,000-odd crore. This does not include the second FGD order of DVC, right?
No, not at all.
The next question is from the line of [indiscernible], individual investor.
I've got 2 questions. One is on the investment policy we have as a company, because in the current annual report, I can see that we have invested in shares obviously, and then we have invested in that top 2 companies like [indiscernible]. It looks to me that we are taking a little bit of risk here in that part. So first question is on the investment quality of power? And -- yes, first question, if you can answer, and I'll ask next.
You see, we have gone through a huge learning curve, as I shared with you, we have also. Company used to do some ICD in some areas, some debt funding. At the post trial efforts, we also went through a learning curve. At the moment, our policy is very simple. We invest our money only in business or keep it in mutual funds or we will at best utilize them for buybacks or dividend to the shareholders. So you can see now whatever money we had recovered from ICD and debt funds, they are part in cash. That is how our cash has gone up to INR 850 crores now, which used to be below INR 500 crore a year back. And we will be shortly coming out with the buyback option, that's what we are waiting maybe in the last quarter of this year, if you like [ part of this batch ].
If I just ask if we have got the money from Talwalkar also because I think it was due in last year 2020?
Right, absolutely.
So we have got the money?
We got part, 40%, not the full money. From the promoters, we could get 40% of it.
But we are not writing it off as of now, is it?
No, no, no. Because it is still in HCLT and whatever the outcome will be, we'll deal accordingly. It's a very small amount in the total corporate. So it is not an alarming issue.
Sir, my next question is with respect to the data centers. The first one we are talking about is in Chennai and then followed by Hyderabad and Mumbai. Do we have the land for these data centers? Or are we planning to acquire them?
Chennai, we already have. Master plan is ready and construction starts this month, which we want to make it ready by December '22 and commissioning by March '23 latest. That is number one. Calcutta, we have already -- you can say, allotted but registering yet to be done. And it is spending capital approval. Similarly, in Hyderabad also, we are in discussion with government -- state government as well as wealth fund for acquiring land in their industrial estate at Chandanwadi. So all this will be achieved by March '22. And we are hopeful to take up the construction by second half of '23-'23 in both the pockets additionally.
And had we tie up with any companies or we will be looking up for the clients after once we have the plan in execution?
So as I'll keep highlighted you, we are seriously in discussion with large data center operators who generally takes care of clients, users and as well as they invest money and they also operate. Our role will be only to maintain infrastructure and as a power supplier.
And what is the IRR we are looking at from these businesses?
Yes. Ankit, you can take up this question.
Yes, I'm saying, you may look at an IRR at approximately 23%.
The next question is from the line of [ Venkat Subramaniam Raman ] from [ Organic Capital. ]
We had some -- a couple of -- almost about a year ago, I indicated that the current financial year and the next one will probably be one of our best years. The pandemic should have actually pushed it back by some time. With almost INR 2,000-odd crores of orders coming through in the next 6 months, do we have capacity to a rollout fairly large execution for next couple of years? And -- yes, I have couple more questions. I probably will join after you take this first.
Techno always had a capability to execute projects no less than 25 to 30 pockets, as I have discussed. Present scenario is -- what is changing policies that our pocket output is growing. It is not adding to number of pockets. Now it is a very concentrated focused business. And each pocket will be INR 250 crore-plus, by and large. So we have the capacity to deliver these projects to INR 2,000 crore by '25, as we have discussed in execution. But order booking also generally in FTD, you require no less than 30 months to deliver a project because these are chemical process based electromechanical solutions. So it has a number of facilities to be executed, cement, structural, mechanical and electrical instrumentation. So it's a kind of a process plant. So capacity will not be a challenge, and we'll be able to strengthen wherever required in the process in the timeline.
Can you say what it is, Guptaji? What kind of EPC billings can one look forward to actually over the next year or 2?
You see, this year, as I shared with you that it's been a stabilizing year, and we are definitely looking for an INR 1,000 crore to INR 1,100 crore as billing in vision only between you and me. Out of which we have achieved INR 400 crores. So in next 2 quarters, we should do about INR 700 crores at least. This quarter, we are assured of INR 350 crores.
In the years that follow, Guptaji, '22-'23 for one year?
Yes. So '22-'23, we will be given the order book, obviously it will become to roll out the execution. '22-'23, we should target no less than INR 1,300 crores and growing by at least 25% in '23-'24 which will be INR 1,750 by then.
My second question was on the Electricity Act. It's been a work-in-progress for quite a while now. Qualitatively, what can -- how can things change? And Techno, we all know, is extremely well positioned. What kind of opportunities can it grow? And it probably can even help us deploy some of the chairs that we are sitting on. Do you want to kind of paint a broad picture?
Sure. This Act and implementation of Act, 2 things in our country has always been a challenge which it comes to confrontation. Act is very promising, let me say. Government is very assuring or aspirational when you reach something which looks like that. But the problem is the period of implementation. I will love to have simpler reforms, more market-related reforms [indiscernible] telecom or in airports or ports. But hopefully this again seems to be little guarded kind of reforms, which should give some level of political stability, still making sectors more financially healthy and stable. So let's see how it -- when it gets legislated and how it rolls out. But definitely I see one thing that whoever may -- whatever may -- the lower private sector will definitely grow in the private sector. The format content, I am not able to, at the moment, translate. But definitely, like in -- you can see now, most of the schemes are on 60-40 basis, that's 60% funded by government and 40% by the EPC. So with a lot of escrow account, guarantees on government. So all those are in place, they will definitely create a bankable model. But I wish they should have left the sector more to the market forces and market reforms. Consumer would have been better taken care of.
And as regards to data center, Ankit kind of indicated that we are in discussions. When do you think we will have some announcements to make with respect to either a client or with respect to funding pattern, et cetera, Ankit?
Could you come again?
You had indicated, Ankit, that your discussions are on with respect to the Chennai data center. When do you think you will have some announcements to make with respect to either funding pattern, participation by investors and also about that possible client?
I'm hopeful that we should have some strategic partner onboarded by March '22.
That's when the other 2 announcements can happen, which is, A, funding pattern, their participation and also the client?
Yes. I mean, once a strategic partner on board, we'll have much clarity on the funding -- the involvement of equity from both the partners. And the responsibility of client acquisition will be with the strategic partner because that is what he brings as a capability on the table.
But I must add here, Venkat, one thing. We are not stopping, irrespective when partners crystalizes. We have taken best of the consultants. Ankit, can you highlight what arrangements and how you are going about doing this project, irrespective of the partners?
No, absolutely. Because partnership is not extremely important to us today. It will be a pleasure to have them onboard indeed, as far as client acquisition is concerned. But on our own strength, we are very confident that we should be able to deliver the data center. And we will, when the time comes, acquire customers. Today, we have best of the consultants on board with us, whether it is on design consultancy side, we have a design consultant from New York. We have peer review consultant from Hong Kong. We have project management consultant from U.S. We have business consultants, again, U.S.-based firm. So we have best of the people associated with us. We have our independent data center division team. And we are confident that we'll be able to deliver the project whether a partner comes on board or not. To be transparent here, we already have a term sheet with one of the partners. It is us who have been delaying the further deepening of relationship with them because we believe that somewhere, as we are getting deeper into the relationship, our confidence of delivering the data center independently is increasing as well. So we want to explore more. We want to see how things develop going forward and then hopefully have a stronger strategic partner by March.
Ladies and gentlemen, as this was the last question for today, I now hand the conference over to Mr. Kamlesh Kotak for closing comments.
Thanks, Pooja. On behalf of Asian Markets, we thank everyone for joining for this call. Special thanks to Mr. Guptaji and Ankit for providing us the insight about the company's business and financial performance. Guptaji, any closing remarks you would like to make, sir?
I'd like absolutely, Kamlesh. I'd like to thank each one of you and all of you for joining the call and making it so huge a success. And again, if you have any query related to our performance or the industry or business we are having or you happen to be on this side of India, you are welcome to drop in mail or drop in our office or, as you like, you are welcome. You will be honored guest with us and your company will continue to outperform as usual and with the past.And with that, I wish you again and I'd like to close the conference and thank everybody for joining and wish you a very happy festive period and recently gone by. So thank you very much.
Thank you, sir.
Thank you. On behalf of Asian Market Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.