Broker’s call: Techno Electric & Engineering (Buy)

Techno Electric & Engineering Company recently showcased its edge data centre facility to provide a closer look at its infrastructure, operating model, customer traction and expansion plans. The facility presently boasts 800 kW of total capacity, of which 430 kW is dedicated to IT load capacity. With 50 racks and a Power Usage Effectiveness (PUE) of 1.86, the business is engaged in colocation and managed services, and is currently experiencing a steady RailTel-led demand.

During the visit, management revealed a capital expenditure (capex) of ₹18-20 crore for the existing facility, which is attributed to the readily available civil structure. Colocation capacity is priced at approximately ₹9,000-11,000 per kW per month, while the broader portfolio yields range between ₹10–11 crore per MW. Management has highlighted a 40-45 percent margin for the current business, with the potential to expand to 70-75 percent excluding power costs.

With approximately 60 MW of projects in the development stage and significant capital expenditure planned over the next two years, data centres are poised to become a significant growth opportunity for Techno Electric. The company has received a Buy rating with a target price of ₹1,600, implying a valuation of 31 times earnings per share (SOTP) for FY28.