Techno Electric & Engineering Q2 Review - Healthy Margins Offset Revenue Miss: ICICI Securities
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ICICI Securities Report
Techno Electric and Engineering Ltd. has reported 193 basis points YoY increase in margins to 31%, offsetting the subdued 6.4% YoY revenue growth to Rs 2.7 billion.
Order intake is likely to pick up in H2 FY22E led by flue-gas desulfurisation and Power Grid ordering.
The management is guiding Rs 20 billion worth of order intake in FY22E and is level-one in Rs 4 billion worth of orders.
Techno Electric plans to enter data centre market with an investment outlay of Rs 10 billion over the next two years – it expects 23% return on equity from the same.
Given the muted H1 FY22 execution, we cut FY22E and FY23E consolidated earnings estimates by 10% and 22%, respectively.
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