According to reports from The Hindu BusinessLine, Techno Electric & Engineering Company has received a Buy rating with a target price of ₹1,600, representing significant upside potential from the current market price of ₹994.80. The recommendation is based on a sum-of-the-parts (SOTP) valuation methodology, implying a 31x P/E multiple on FY28 estimated earnings. Recent site visits have provided comprehensive insights into the company's data centre operations, infrastructure, and business economics.
The company's edge data centre facility currently operates with 800 kW of total capacity and approximately 430 kW of IT load capacity, featuring 50 racks with a Power Usage Effectiveness (PUE) of 1.86. Management indicated a capex investment of ₹18-20 crore for the current facility, leveraging readily available civil infrastructure. The facility serves as a key growth driver for the company's data centre expansion strategy, with recent site visits confirming strong operational metrics and customer traction.
According to the report, Techno Electric charges approximately ₹9,000-11,000 per kW per month for colocation capacity, with yields across the broader portfolio currently ranging between ₹10-11 crore per MW. The company operates with 40-45% margins for the current business, with potential margins reaching 70-75% excluding power costs. Management highlighted strong customer traction, particularly from RailTel-led demand, as key drivers of the business model, with recent site visits confirming robust occupancy levels and customer engagement.
The company has 60 MW of projects under development and has outlined significant planned capital expenditure over the next two years. The expansion strategy includes data centre facilities across Noida, Chennai, Mumbai and Gurgaon, positioning data centres as a key growth opportunity for Techno Electric. This multi-city approach aims to capitalize on the growing demand for edge computing infrastructure across major Indian metropolitan areas, with recent site visits confirming the company's commitment to scaling operations across multiple locations.
