TECHNO ELECTRIC & ENGINEERIN (NSE: TECHNOE) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Padam Gupta — Executive Chairman
Ankit Saraiya — Whole Time Director
Analysts:
Suraj Sonulkar — Analyst
Resham Jain — Analyst
Saurabh Shah — Analyst
Abhijit Desai — Analyst
CA Garvit Goyal — Analyst
Unidentified Participant
Ashish Soni — Analyst
Lakshay Agarwal — Analyst
Chinmai Kabra — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Techno Electric and Engineering Company Limited Q3 FY ’25 Earnings Conference Call hosted by Asian Market Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Suraj Sonulkar from Asian Market Securities. Thank you, and over to you, sir.
Suraj Sonulkar — Analyst
Thanks,. Good afternoon, everyone. On behalf of Asian Market Security, we welcome you all to the Q3 FY ’25 earnings conference call of Techno Electric and Engineering Company Limited. We have with us today Mr P.P. Guptaji, Chairman and Managing Director; and Mr Ankit, Directors representing the company. I request Guptaji to take us through the overview of the company quarterly results and then we shall begin with the Q&A session. Over to you, Perjee.
Padam Gupta — Executive Chairman
Thank you,. A very good afternoon to all of you and I welcome everyone to discuss Texlo Electric financial results for this quarter, Q3 and nine months ended 31st December 2024. Anything said on this call and which reflects our outlook for the future or that could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the industry and company faces. Let me highlight our performance.
The company has as you all know the company has a SPV to set-up a 40 megawatt grid load data center at Japan. The asset is nearing completion stage for the Phase-1, but still not revenue accretive but value-accretive. It is consolidated — the consolidated results will knock-off the financials of the SPV of data centers. Let me now take-up the Q3 results for financial year ’25. The total revenue for this year for EPC business is INR676 crore, up by 85% year-on-year.
The EBITDA for the company is up — stands at, up by 120% year-on-year. EBITDA margin for the company is at 14.68%. Other income for Q3 is at INR43.86 crore compared to around INR42 crore last year. The profit before-tax for this quarter is at 138 cr, up by 71% year-on year. The PAT is at 105 cr, up by 35% and the EPS for this quarter is at INR9. The — looking on the Nine-Month results, the revenue is at INR50 crore INR90 crores, nearly INR1,600 crore by 33%, up by 33% year-on year.
The EBITDA stands at 225, up by 34% year-on-year. The EBITDA margin is at 14.17% 17% compared to 13.4% last year. The other income is at INR105 crores. The profit before-tax is at INR318 crores, up by 27%. The profit before-tax is at INR250 cring up by 25% to 24% and EPS is at about INR19, about 22 compared to INR90 last year. The current investment value that is cash or cash equivalent is around INR2,500 or INR220 per share.
The momentum for order intake and bidding has continued very strongly and for the sector as well as for techno also we have a robust order book of around INR9,700 crores as of December 2024. We have received orders worth 1,100 cr in this quarter, which takes the of this year to around 750 cr. We are further L1 in around INR1,600 CR crore of business which is expected to materialize within this quarter.
These are largely power substations or power grid at whether, Ghiri or with private sector players like Adani or. We have various bids in pipeline and are confident to get additional orders par around another 2,000 in this year, which will take the total orders book of the company booked during this year to around INR3,500 crores. We should be closing the year with an order — order book backlog of unexecuted orders of almost about INR10,000 crore-plus first time in the history of the company.
This simply reflects post order execution for the current year with growth on year-on-year basis will have enough orders in-hand to keep the growth momentum going. The company during the year have successfully raised a QYP of INR1,250 crores during the current financial year. So we have added new reputed investors on-board with us now. On the outlook, I will say the growth momentum began in financial year ’24, as I shared with you. In ’22, ’23, we were on an average doing INR75 crores per month, which improved to INR125 crores in the financial year ’24.
And this year we are targeting INR200 crore per year from INR125 crore last year. And for the — and for this financial year, we should be expecting a top-line of around INR2,400 crore. And generally the Q4 is about 30% of the top-line and this will tell you with the already achieved revenue of Q3. Next year, we will be targeting this to further move-up to INR300 crores per month for financial year ’26. We expect larger business in transmission and data sectors. As you all know, looking back with almost negligible energy growth over last eight years is as late as ’23.
In last two years we are seeing a high-energy demand and the growth is almost happening close to double-digit the present load demand in the grid is moving around to 40 gigawatt and which is expected to be 400 gigawatts by 2030, thereby employing a per-capita consumption to grow from 1,250 units to 1,750 units by 2030 to meet this demand, the power plant capacity is planned to be enhanced both in the conventional powers by 80 gigawatt and as well as by renewable energy or energy transformation to achieve a target of 500 gigawatt by 2030 and this also has been reaffirmed by PM only yesterday in the India Energy week this all implies that transmission in renewable power I would like to share with you is 4x over 1x in the conventional power sector is now full of is now transforming by deploying all the transmission capacity as required for renewable power and is now transforming by deploying high-end solutions, namely 765 KV, AIS, GIS transmission solutions, solutions,
VSC HVDC solutions best BSO facilities to make the renewable power eligible to be baseload power and where your company has a larger presence than other and any other entity in this marketplace, particularly in-building the stations.
Your company is presently focused in the following areas, the transmission solutions largely in 765 KV or 400 KV AIS, GIS, the smart metering, the MGD which we call AQI solutions, the digitize or modernization of the power distribution discourse networks of the discoms and also hyperscale of the gas data centers.
From the current mix of 43% of total installed capacity, the renewable energy is expected to be around 64% by 2030 and due to the — and the growth of deployment is also around 16% CAGR compared to 4% in fossil fuels. In the budget of current year, the significant increased allocation is there for the renewable power sector, which is almost 40% higher than the last year and is presently at around 25,000 CR. The CA report on transmission integrating 500 gigawatt of renewable energy capacity by 2030 is a grid that identifies various transmission which aggregates around 15,000 circuit kilometer of mines and another 4.5 lakh MBA transforming capacity.
Following the addition to this ISTS, the international capacity will stand improved to around 168 gigawatt by 2032. The national electricity brand in transmission alone presents a investment opportunity of around INR10 lakh crore required over next, say, 7, eight years. And in addition, I would say in the budget you have seen, the government has started currently focusing on building interest intra-state transmission system also for which they have focused allocating an additional 0.5% of GSDP, gross state domestic budget to all the states put together and this would bring the estimated opportunity to another 1.5 lakh crore.
States have given a timeline of March 25 to their proposals for by the ministry of MNRE as well as apart from this, we are now seeing also opportunities for which we did earlier in partnership with overseas companies, the power grid has amended the qualification and reached and qualified of our non-marrier now to support our grid of this critical mission. The data centers will also going to be creating additional lot of additional demand for power. As earlier mentioned, just the government has also allocated 80 gigawatt of hydro and thermal capacity to augment the generation segment.
We are also the balance of plant and switchyard facilities, deployment and grid integration will be an opportunity. NTPC and DVC both have come out with a tenders for grid integration and deployment of at four locations. On the distribution side, RDSS will see a lot of activity happening going-forward. The smart metering is in execution at in-full scale to contain the distribution losses of the discom is already visible, we are also focusing on strengthening power distribution networks to make them smarter, intelligent by their modernization as well as digitization.
So the RDSS also have allocation of the funds for city modernization which will also have opportunity within this segment around 22.24 crore meters are in various stages of award for deployment out of this about to my knowledge, about 1 30 million metres have been ordered out and only about 20 million stack installed till-date the finance minister in our budget of because he has also said the government will be election distribution and augmentation of interest-rate transmission capacity amid efforts to improve their financial health and capacity of power forms I believe this will open new opportunities party for the investors.
The budget document also will that reform based distribution schemes which also has the allocation of around INR16,000 crore and is strictly aimed at inviting private investment in this segment. I trust your company is fairly pledged and is competent to be part of this program. Basically all this implies that the government is looking on providing financial reforms which are reform with an objective of ensuring 24×7 quality and sustainable power supply for all and a financially viable power sector the government further envisages for discoms in case they adopt reform packages, LP ownership of distribution companies, adoption of various franchise models at distribution level including multiple supply franchises franchisees.
Apart from this we are definitely that we will be requiring energy storage solutions like battery, bests or publing storage of no less than 20% of this capacity and this will also have to be additionally supported by any kind of capacity power management solutions will be great and we see significant activities where Techno is fully qualified and technically competent to be part of. In FGB segment, we see a slow movement where government has finally extended the implementation period for three years and this is encouraging states to now order out the packages, which were standstill over last year, more than a year and we see that 5 to 10 gigawatt per year should be ordered out by the State Electricity Board and a bit from the private sector also in this space.
Our order on is progressing very normally in in the transmission segment the bidding is happening for almost 50 gigaw, 50 to 100 gigawatt now and a lot of building is in-progress. At the moment, we are finding that every month four to five concessions are being awarded to some player or the other in this space and the last one to enter is power — realize of — company also in this space. So that’s very exciting to know that the one more resourceful company is part of this segment and they find this space exciting and. Total bids open for transmission is around INR40,000 crore, out of which Techno is expected to book orders for about INR2,500 crores per year over next two to four years.
We currently have orders worth about more than INR6,000 crores for transmission in this space without our own orders in PVCV and we are relevant with another around INR1,600 crores worth of orders in this segment. As you know, we are also successfully executing two concessions within revenue stream of INR2,800 crores over the concession period. Similarly, we have also won of deploying 2.5 million smart meters. In the segment, we expect to get orders worth about a million meters every year and we have already got orders worth about 2.5 million with an investment target of INR2,500 crore in this space.
Out of this we have already deployed about half million by data centers we believe that digitization and services on cloud, public or cloud, private is the most prominent reason that have led to the growth of the data centers and demand for data centers apart from other reasons such as five transmission and many more ISPs or IoTs in this space. The Indian data center market size is estimated to be about two gigawatt by 2025 and about more than about 7 gigawatt by 2030 there is a substantial growth is being planned in this space, which may cumulate at a CAGR rate of no less than 20% and in monetary terms, this may mean almost $2 million investment per year and growing to $5 billion by 2030.
The growth drivers in this space are public-cloud adoption, local data localization, policy incentives, digital transformation, technological developments to roll-out 5 G and AI and we are the increasing adoption of AI and 5G and virtual reality will evolutionize this space. IoT, big data and cloud computing will be the next-stage.
Coming to our own data center I will say that we are in a very advanced-stage now of ready for operations of first phase of the 24 megawatt IT load hyperscale data center at and this is now nearly coming to a completion with a total capital involvement of about there is some delay in this project due to regulatory and permissions to be achieved from the local authorities but use I will say it’s a state-of-the art first time carried out by and also it is one of the best-in this space in the country and will be ready for service by March ’26 and we expect it to be leased-out in Q1 of the next year we have Ankit, will you like to come in now?
Ankit Saraiya — Whole Time Director
Yeah, sure. So just to give a brief on where we stand with our data center in Chennai, as mentioned, we are very close to achieving ready for service. We should be able to achieve RFS for this project by March ’25 with the first phase of 5.6 megawatt up and ready for servicing the customers. We are hopeful to achieve the leasing of this capacity within the first three to six months of commissioning. Having said that for multiple reasons this project for sure has got delayed, but for reasons which are not directly attributable to us but largely due to the regulatory and permissions that are required to get the project up and running.
Plus there have been supply-chain disruptions due to certain crisis that unfolded in the Red Sea and as well as due to shortage of semiconductors. But ultimately, we’ve pushed through and now see a possible ready for service by March ’25, which is somewhere during the next month. Having said that, we have — now that we are in the final stages of rolling out the project, our interaction with potential customers have deepened and have increased. We have — we are in deep discussions with certain global major cloud players and we have received very favorable responses from them.
Domestically, we have reached out to customers in BFSI segment, some content delivery network operators, some domestic cloud players, some public sector enterprises, and we have received very, very encouraging response from each and every one of them, particularly, we can mention about a significant interest by a public sector bank and a multinational private sector bank. And we are undergoing formal evaluation process by both of them, which should be completed in the coming quarter plus we believe AI has really pushed the industry to greater heights and to larger opportunities.
We see a very big surge in-demand of data centers especially for AI purposes and our facility in Chennai is very much AI ready, possibly one of the only data centers which are truly AI ready because of the designed rag density and the cooling technology that we have used. Given this background, we have received significant interest from companies that are in the field of artificial intelligence and one of them is a unicorn that is actively discussing with us for an interest of two to three megawatts leap to begin with which can potentially lead to a consumption of the entire data center. Apart from this I’m sure everyone must be aware in some shape and size about the India AI mission, which was kickstarted recently and certain players are awaiting.
We are in discussion with multiple such players to offer our data center for their infrastructure requirements. And given that this data center is truly AI ready, we always find ourselves as one of the most preferred partners. Apart from that, we have started building a very deep and a strong network of distributors and channel partners through which we are reaching out to medium and small enterprises across the country for their data center requirements and we have received positive and significant interest from all sorts of enterprises through our partners and we are closely working with them to engage with these companies in their digital transformation journey.
Apart from that, as we had mentioned, we are to execute edge data centers in 102 cities in partnership with Railtel Corporation. In that we are very close to commissioning a first edge data center in Gurta. It should happen over the next seven to 10 days. We can possibly say that 50% of that capacity is — has — is very close to getting leased or one can presume that it is almost leased. The — for the remaining 50% capacity, we are in active discussion with enterprises and public sector. And within a month of commissioning this project, we are hopeful of easing out the 100% capacity in Burgaon.
This is a small edge data center of 200 kilowatt. The next location that we plan to commission is in Mumbai. This project will start construction by first week of April and we should see commissioning in the month of August ’25 Mumbai is obviously the most preferred market for data centres and we are at the heart of Mumbai, in South Mumbai itself at Mahala Akshmi couldn’t have couldn’t have expected a better location for data centres and we are in close discussion with one of the large conglomerates in India to lease-out 100% capacity in Mumbai to them from the date of commissioning itself.
Apart from this, we are in discussion with global hyperscalers for contracting at least four to five data centers in Tier-2 and Tier-3 cities. As the next step apart from and Mumbai we are looking to start developing data centers in the city of Gandhip Nadar, in Bhopal, in, and Hyderabad and these constructions will begin sometime during the year of 2025 itself. Apart from this is little beyond the contract with that we are planning to commission a very small edge data center in Calcutta because of a significant interest by a global CDN player and we are in and this will enable us for the first time to not only provide co-location services, but to also enter their metal services as that is the requirement of the customer and we look-forward to engaging with that customer soon, contractually and getting this data center up and running within the next four to five months.
As far as our data center in Calcutta is concerned, we have started the pre-construction activities the design and engineering consultant is onboarded, project management consultant is onboarded. The local consultants for building plan approvals for fire approvals and other approvals as required have been onboarded and we have even started very basic construction of compound wall at this location and we are hopeful of commissioning the project in by mid to-end of 2027. Apart from this, excitingly, we are now gearing up to start our services and infrastructure as a service space. We are launching services on the infrastructure as a service space by providing private cloud services.
We are in discussion with couple of customers for their private cloud requirement and are very close to closing these contracts and provide cloud services as a private — in a private cloud model during second or the 3rd-quarter of financial year ’26. As of now, I can say that we have an active funnel of upwards of 10 megawatt with some key cloud opportunities. On the organizational side, we have recently onboarded Mr Amit Agarwal as President of Data Centers. He was earlier the Chief Business Officer for the joint-venture of Iron Mountain and and we are building a significantly sizable sales and marketing setup to reach the market 100% by ourselves and for enabling that setup, we have recently launched and set — we have recently launched our office in Mumbai at Parel. That’s on the data center side and would be happy to take some questions during Q&A.
Padam Gupta — Executive Chairman
Thank you. As you are all aware, during the last five years, the company has successfully are created and monetized the assets in renewable power generation and transmission. We were the first-mover in ITP in renewable power or P model in transmission and all those asset steps monetized and enabling us to have cash which is along with QIP cash now at 2,500 CR to be deployed in the next phase of growth of the company. And as I mentioned, the company is almost now fourfold in last three years from 75 cr per month-to 300 cr by March 26 that is the target with 200 CR per month during the current year and we reaffirm that our EPS for this year will be no less than INR35 has committed and for next year and for next year or current year, whatever you say, 45 46, it will be almost INR50 plus so with this, we I invite the questions and we’ll be happy to detail further.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] We have the first question from the line of Resham Jain from DSP Asset Managers. Please go-ahead.
Resham Jain
Hi, good evening, team. So my question is to Ankit on data centers. If you can just given that there are multiple things which are happening in Chennai, new plant or new setup coming in Kolkata and then multiple ledged data centers. Next five years, what kind of revenue, EBITDA and capital employed will go into data center? If you can just broadly directionally tell us how are you thinking about the same?
Padam Gupta
I will say that you are asking a young person is a very mature question two you can on an average stake in next, if everything goes as projected, data center will become the face of the company. That’s how we are projecting going-forward. And if not in five years, at least by 2030, we should have a capacity of no less than 250 megawatt and at least locations no less than 100 countrywide including edge data centers and we are definitely will be looking for a revenue of no less than I would say almost about quarter of a billion-dollar to $50 million per year, if not more out of this capacity. With this Ankit, you would like to add both.
Ankit Saraiya
Yeah, sure, yeah so I think you know the way things are going today it’s very difficult to point out because the industry is very, very dynamic Resham if you see what happened over the last 15 days in the industry from US announcing $500 billion for AI infrastructure and then the announcement of largest data center in Jam Nagar and then going to what we all heard about from China, which is deep seek, that is how dynamic and disruptive this industry is. And ultimately the infrastructure when we talk about for any such application, it is data centers only. In such a disruptive industry, it gets very, very difficult for us to become very predictable in nature on seeing what we can feel in what it would be in next four to five years.
But in most conservative sense as EPG put it up that we should see at least 200 to 250 megawatt come in by Technoelectric and at least $250 million of revenue flowing in from data center and it’s allied services. And — but let me say that the way this industry is unfolding, it is a — it’s highly — it has immense opportunity and one has to keep unlocking them and growing with them and ultimately it may end-up sounding and shaping very different than what we all envisage today.
Resham Jain
Understood, very clear. And sir, the — my second question is on the transmission business. Last year, there were certain supply-chain kind of challenges whereby getting material itself was not easy, are you seeing some of those challenges residing and receding? And how is the execution looking like from your side.
Padam Gupta
Those challenges will remain and it continues the oldest player in this segment and our relationships with all the suppliers is of a partnership and we are also consuming no less than 10% of the supply-chain in this segment today in the market and this is likely to be 15% by next year. So we are hopeful to despite all these challenges, we’ll be able to get priority from our partners. Supply-chain is will remain a concern for the overall market, but not challenging, I will say. But largely the land parcels, where we got delayed in the first-half of the year, while the lag parcels are becoming difficult for the concession, to you know, arrange and hand over to us for the deployment of the facility. That is what delayed in the first two quarters. Now all those are available except one or two still to be given by and a private player but now we mostly have those lag parcels and hence you see the growth in the output also.
Resham Jain
Okay, sir. Thank you. All the best, sir.
Operator
Thank you. The next question is from the line of Saurab Shah from OM. Please go-ahead.
Saurabh Shah
Hello, sir, can you hear me?
Padam Gupta
Yeah. Welcome.
Saurabh Shah
Hi. So I wanted to check with you. These orders that we have for the edge kind of data centers and the other government contracts, in terms of margins, how do you expect them to pan-out given the nature of your contracts, the environment that you see for procurement, etc., since they could be a longer-dated execution time.
Padam Gupta
No, this edge data centers are concessions to us for 20 years extendable by five years more. So these are revenue-sharing agreements with the and the margins will be all guided by the tariffs or leasing rentals on which we can deploy these facilities and for what application they get deployed. So as Ankit has already mentioned you, these are bit growing up, disrupting but rewarding situations so it is the margins are difficult to share in a acquisition because they will be all measured as a IRR of the investments in this case at which we hope it will be not less than 20%. Ankit, will you like to add?
Ankit Saraiya
Because these are BOT contracts, sort of a BOT contract over a period of 20, 25 years, one has to look at it more from the perspective of cash-flow and IRR and we are hopeful of achieving high-teens or early 20s in IRR for these projects. So there is not real upfronting of any margin as an EPC that we can really compare it to a transmission EPC that we do additionally.
Saurabh Shah
Right. Well, we have followed the company for many years and in the past, we have been very careful about that we take high-margin projects. So this just seems to be slightly more open-ended and you know the question of pricing and all that then to some extent it will stay-in our hands. So I just want to check how you guys were looking at it in that decision.
Padam Gupta
This will be I can with more. It is more diverting that our EPC. That’s what I’ll say.
Saurabh Shah
Okay. Thank you.
Operator
Thank you. The next question is from the line of Abhijit from ICICI Securities. Please go-ahead.
Abhijit Desai
Yeah, thank you for the opportunity. Sir, first of all, on the data center business, what is the kind of capital that we have employed already and going-forward, what is the capital allocation plan for the Chennai data center? Thank you.
Padam Gupta
Yeah, we have deployed 450 CR by now, that is for Phase-1 and maybe another balancing requirement of 25 CR plus-minus 4 in closing out and next phase we will take-up only after this phase is fully deployed so you can say that we will be spending another about 500 to 600 CR over the next two years Chennai data will see another 600 CR but that may start only second-half of the next year.
Abhijit Desai
Right. Sir, and the revenue accretion from this capital that we’ve employed already of INR450 crore. So that revenue accretion we’re expecting from maybe H2 FY ’26 or FY ’27. Is that the correct understanding?
Padam Gupta
No, it starts of ’25 ’26 Q2 you can say it will be start flowing.
Abhijit Desai
Right. And sir, on the non-hyperscale data centers like the edge data centers like Kurka, Mumbombay and the retail ones. So what is the kind of capital allocation plan there? Is there a plan in terms of capital allocation or it is like as and when we see a good opportunity in the edge data centers, we’ll go for it?
Ankit Saraiya
No, so let mesh. So let me clarify this for you regarding Chennai first and then coming to the edge data centers. As mentioned, Chennai data center should start seeing revenues start flowing from second-quarter of financial year ’26 and going-forward, one can expect INR200 crores to INR250 crore of capex behind Chennai data center annually for expansion of the phases until we have commissioned the entire 24 odd megawatt.
Having said that you’ll see revenue start flowing from second-quarter of financial year ’26. In regards to edge data centers, obviously, it also — it depends on how things shape up in the industry, but we target to at least put in as contract — as contract requires, we have to set-up 20 locations every year. But on all practical basis, we assume we will be starting anywhere between eight to 12 locations every year and that is due to the contract that we have with Railtel. But the locations that we choose will dictate the capex involved because each location may not be of the same size data center.
Each location may be different. For instance, was a smaller one with 200 kilowatt, while Mumbai is a larger one, which is going up to about a little more than half a megawatt. Similarly, the ones which we are discussing in Gandhi Nagar and Indore may go up to anywhere between a megawatt on an average. Similarly, Bhopal may be around a megawatt again. So each location is differently sized, not all locations are the same. And depending on the number of locations we pick-up in a year, the capex would be dictated accordingly. But in all possibilities, you will see at least INR150 odd crores to INR200 crores of capex annually once the retail project comes in smooth operating procedure.
Padam Gupta
But I may like to add, as you rightly said, there will be opportunity based that the priority will be decided based on the opportunity and capex will be, as Ankit has said, around 200 cigarh plus-minus year depending on capacity mix at each pocket.
Abhijit Desai
Right, sir. So essentially around eight to 10 to 12 locations in terms of the edge data centers per year and each one would be about 500 kilowatts to 1 megawatt on average.
Padam Gupta
But now absolutely right. To start with, but they will keep building up as they get that location gets formed up over the years, they will go up into the capacity.
Abhijit Desai
Right. Sir. And secondly on the T&D EPC business, I did not catch the order info number, if you could repeat for Q3 and the nine months FY ’25.
Padam Gupta
Yeah, this year, as I said, the total order intake will be about 3,500 CR. We have already booked orders worth about 750 CR by now or 1,800 CR and this quarter it is around 1,100 CR. And we are also L1 in another 1,600 CR, which will be converted into orders and concessions won by the developers already. So it’s a near a formulty of their acquiring SPV lag parcel and then releasing out the orders by pocket. Lately they are believing unless they have a land parcel, they will like to delay issuing NOI, but they are committed to issue so. So it will be about INR3,500 crores this year and we should close the year with the order backlog of 100 CR plus.
Abhijit Desai
Right. So this 3.500 CR is essentially entirely claimed EPC.
Padam Gupta
Yes, absolutely EPC.
Abhijit Desai
Okay and what about the non-T&D part of it like the power gen or the smart business?
Padam Gupta
No, then we are executing FGD order as you know about unexecuted part is about still about that will take another two years to complete then also we have a distribution side business on the digitizing or modernizing the distribution network about INR300 crores, we are doing one DVG and we expect more business in this space. Similarly, we are deploying smart meters that is another business of 2,500 CR additionally we have our own TVCV projects with a capex of about 700 CR plus.
Abhijit Desai
Hi, sir. So thank you so much for answering that. That is all from my end. Thank you.
Operator
Thank you. [Operator Instructions] We have the next question from the line of C.A. Garvit Goyal from Invest Analytics. Please go-ahead.
CA Garvit Goyal
Hi, am I audible?
Operator
Yes, you’re audible, sir. You may proceed.
CA Garvit Goyal
Good evening, sir. Congrats for a decent set of numbers. My question is on the data center only. Like you mentioned from Q2 FY ’26, Chennai data center will start contributing to the revenue. So I just want to know like what is the anticipated contribution that will be there in FY ’26 from that data center to our top-line, sir.
Padam Gupta
Honestly we have not considered it. If something happens it will be upside you can take it, but on an average we do expect that we should at least target to have about 100 CR with a ranging from anywhere 50 cR to 100 minimum for the year.
CA Garvit Goyal
Understood, sir. And secondly, on the guidance part, like this year we have a guidance of 2 crore to 50 cR on consolidated basis. So are we sure like to achieve that guidance, we have to do around INR800 cR in Q4. So are we confident enough to do that number, sir? And secondly, for next year, I think earlier you have guided for EPS of INR50 and this time in opening remarks, if I have heard right, you mentioned 45. So what is the reason for this decline?
Padam Gupta
No, I have not mentioned 45. Firstly, I have mentioned this year we should be doing an average of 200 CR and generally Q4 is about 30% of the top-line. So definitely it will be 750 crore to 800c up there as Q4 and 35 will be the EPS. And Q — 25 26 I said, our top-line will be about INR300 crores per month. So you can expect a top-line of about INR3,500 crore INR3,600 crores and EPS of INR50. That’s what I read from.
CA Garvit Goyal
Got it, got it. I think I heard it right wrong. But I think these are standalone numbers. What about the consolidated top-line, sir?
Padam Gupta
Sir, in consolidation, there is not very large difference because they are only meant for our own concessions. They are only accounting requirement per se. So it is not going to be very different, I will say at least for next year.
CA Garvit Goyal
And what is? What is the margin guidance, sir?
Padam Gupta
It will be same about EBITDA of 30% to 40%. You can take 14% plus-minus.
CA Garvit Goyal
Thank you very much, sir. Thank you.
Padam Gupta
Thank you.
Operator
Thank you. The next question is from the line of Murta Za from Avendus Capital. Please go-ahead.
Unidentified Participant
Hi. My question has already been answered. Thank you.
Operator
Thank you. We will move to the next question, which will be from the line of Ashish Soni from Family Office. Please go-ahead.
Ashish Soni
Sir, regarding data services, data center, the services which you want to offer, I think you said about lot of services. So any particular services because you gave a whole — so what’s our view in terms of leasing out what sort of services? Because I was not clear on that.
Padam Gupta
Ankit, you will like to answer.
Ankit Saraiya
Yeah, so in data centre is always the basic, most basic service [Technical Issue]
Padam Gupta
Ankit are you there?
Operator
Ankit sir, are you audible.
Padam Gupta
He is dropped out, can you repeat your question sir?
Ashish Soni
I think the data center I think you may I think Ankit mentioned about gamut of services. So because you mentioned a lot of customer discussion. So what is our take, which services we want to prioritize and any particular reason behind it? So I just want to understand because I heard colocation, I heard infrastructure as service. So I just want to understand that in better shape.
Ankit Saraiya
Am I audible now?
Padam Gupta
You drop me in our office. Ankit, are you back?
Ankit Saraiya
Yeah, am I audible?
Padam Gupta
Yeah, you are audible.
Ankit Saraiya
Yeah. So as I was mentioning, apart from core location services, which is the basic service that we plan to provide, we also now looking to expand our services into bare-metal services, infrastructure as a service. Infrastructure as a service can include the your line is not clear, sir. Hello. Yes, sir, please go-ahead you can go-ahead yeah, so as I was mentioning infrastructure as a service, we include fair metal services, we include cloud services, private cloud services, white services amongst others.
Ashish Soni
So let me be more specific. So for Chennai, which of the services you want to sell and maybe for next round for Kankata, which of the services you want to sell, right? Because interest by the way, heard lot of interest from a lot of customers. So what’s our take on that?
Ankit Saraiya
So when we talk about any data center, we will build our portfolio of services around them. So for all the data centers that we come up with, whether it is Chennai, whether it is Calcutta or whether it is the edge data centers, we will be having the operational bandwidth to provide all these services from all of these data centers.
Ashish Soni
So that is okay. What I’m trying to understand when we want to lease it out to our customers, so what’s our preference in terms of what — what we want to sell? Because now what I heard is there are a lot of customers already in pipeline. So how are we picking choosing the services and customers?
Ankit Saraiya
No, so we would like to address all sorts of customers. We are not limiting ourselves to any particular type of customer or a customer which prefers a particular type of service. So for instance, in Chennai, today, we are in discussion for co-location service. We are also in discussion for bare-metal services. Similarly, in Calcutta, we are in discussion for bare metal service to a content delivery network while we are in discussion with a couple of customers for private cloud services out of a data center in Gurgaon and Mumbai. So they are different depending on the customer and their requirements.
Ashish Soni
So is there a strategy to get like a reference for each of the services with a good customer or is the profitability? I’m trying to understand that strategy from management.
Ankit Saraiya
So profitability is not that we are compromising when we are providing any of the services. All of them are equally or more profitable than each other. There is no preference of the management when it comes to choosing which service we rather choose over the other.
Ashish Soni
Okay. Okay. Thanks and all the best.
Operator
Thank you. The next question is from the line of Rohit Singh from Invest Analytics Advisory LLP. Please go-ahead. Rohit, your line has been unmuted. You may proceed with your question.
Unidentified Participant
Yes. My question already answered. Thank you.
Operator
The next question is from the line of Samil Shah from Paras Investments. Please go-ahead.
Saurabh Shah
So my question — hello. Yeah. My question is, yeah, my question is really related to the data center business only. Recently, we have heard that Deep Seek’s entry into this industry will have an adverse impact on the data center companies. So I just wanted your views on the same. Are we seeing any negative impact on our business?
Ankit Saraiya
Actually look at Deep and its development, I would say it’s actually a very, very positive development instead of negative. I do understand where the negativity stems from, but one needs to appreciate that in a very disruptive kind of a technology which has recently got innovated such kind of disruptions are a way of life and we’ll see more of it coming in news time-to-time. And these disruptions are actually very, very good for any industry because the more affordable and accessible the technology becomes, the cake size increases, the market size increases and therefore the demand always remains at peak. So there is never that any disruption causes lack of demand.
So if tomorrow infrastructure requirement reduces and prices for the end-consumer improves, we’ll see more market participation and therefore automatically the cake size of the industry will increase. That is what happened in telecom sector when GEO entered. It never — never while they were able to run at their minimum infrastructure and reduce the cost of telecom services to the end-customer, but the entire market size went possibly four times.
Saurabh Shah
Basically, I mean, we are seeing a positive impact and rather than a negative impact?
Ankit Saraiya
No. Absolutely.
Saurabh Shah
Yeah, okay. Okay. And sir, my final question, sir, we have been guiding INR50 rupees EPS for FY ’26 and INR75 EPS for FY ’27. So — and in one of the calls, even we mentioned that we are expecting INR25 to INR30 EPS only on the data center business by FY ’27, FY ’28. So this would — this would be over and above our guidance of INR75 for FY ’27.
Padam Gupta
No, no, no. That will — data sector will become part of this INR75 going-forward.
Saurabh Shah
Okay, okay. Okay. That’s it from my side. Thank you and all the best.
Padam Gupta
Value-accretive will be reflected. Of the EPS, yes, but not value-accretive will remain in the subsidy separately.
Saurabh Shah
Sorry, I didn’t understand.
Padam Gupta
Yeah, one is a revenue part and one is a value accretiveness because businesses are valued differently, you know, whether it is transmission or AI or data centers. What I’m saying is the value as we be part of asset is not part of EPS. EPS is purely revenue-based.
Saurabh Shah
So basically you mean to say due to data center business, we can get more valuation. That’s what you mean to say?
Padam Gupta
No, no, no. Not that. Whatever revenue we generate or EBITDA we generate will be very different from the transmission business. That is why 50 becomes 75. That’s what I’m trying to say as in a rating.
Saurabh Shah
Okay. Okay. So the increasing business would be from the data center side.
Padam Gupta
Right 27 on the basis. Okay. As in EPS, I top-line may not grow proportionately.
Saurabh Shah
Okay. Okay. Thank you.
Operator
Thank you. The next question is from the line of Sam Sangwan from investors.com. Please go-ahead.
Unidentified Participant
Sir, congratulations for putting a good set of numbers. Actually my question is answered. My question was regarding data centers effect of deep seek like AI advancements on data center business that I think already as you have covered already.
Operator
Thank you. The next question is from the line of Lakshay Agarwal from Ventures LLP. Please go-ahead.
Lakshay Agarwal
Hello, sir. Thanks for taking my question. So my question is directed to Ankit sir. So I just wanted to understand that we have like two data centers, which we are working on, the Chennai data center and the data center and both previously which we were planning to just do the EPC part, but now we are focusing on co-location. So I just wanted to understand that on a per megawatt basis, how much is the rental which we are looking at either on a monthly basis or on an annual basis? And how much margins we foresee from that?
Ankit Saraiya
Yeah, you can presume a rental of about 20 — if you are looking at a pure co-location service without any infrastructure as a service, then in that case, we can expect a revenue of about 10 crore to 12 CR per megawatt annually of the commission capacity.
Lakshay Agarwal
Okay. And in terms of the margin profile for the same, like how much would it take to operate it?
Ankit Saraiya
So EBITDA margins of about 80%.
Lakshay Agarwal
Okay. And secondly, as you mentioned that we are also working on infrastructure as a service. So how much is the additional cost which is required to — for a per megawatt basis to get the server setup and everything and then additionally, how much is the rental which we can expect for the sale?
Ankit Saraiya
So generally, infrastructure as a service can be set-up in two models, which can be largely capex based or opex based, we would possibly adopt a more opex model for infrastructure as a service rather than capex.
Lakshay Agarwal
Okay. Can you like be a bit more elaborate on the opex part, like when we say that OpEx, so will we be like leasing like will we be taking the server on rent itself or how are we planning to do?
Ankit Saraiya
So yes, you can possibly take the hardware and the technology, which is built on the hardware for these kind of services on more of a lease model or more like a subscription model from technology service providers and then provide it at a higher-margin to the end-customer.
Lakshay Agarwal
Okay, understood. And in terms of our edge data centers, so is it just a build, operate transfer model or we will also be managing it for.
Ankit Saraiya
No, so we will — it’s a build, operate transfer model where we transfer the asset back to Railtel after 25 years. For the first 25 years, we have to operate and maintain these assets as well as bring customers for these assets, provide them with ONM services or any other service that we want to and then the revenue gets shared with Rail.
Padam Gupta
This is called DBFO OT model develop finance all operate and transfer post congestion period.
Lakshay Agarwal
Okay, understood. And sir, would it be possible if we could visit the Chennai data center?
Ankit Saraiya
Yeah, absolutely, most welcome. And we would love for you to even visit one of our edge data centers in, which is now almost commissioned.
Lakshay Agarwal
Okay, sure. I’ll reach-out to you for the same. Thank you so much, all the best.
Padam Gupta
Please drop-in our Gurgaon office and you will have a more insight into the business.
Lakshay Agarwal
Okay, sure. That will be very helpful.
Operator
Thank you. The next question is from the line of Kabra from Emkay Global Financial Services. Please go-ahead.
Chinmai Kabra
Yeah. Hi, sir. So just in continuity of the previous participants question, just wanted to understand the rentals that we are projecting from the IS services that we will be offering. And just wanted to really understand by when are we maybe planning to bring up the IAS service on a full-fledged basis?
Padam Gupta
Ankit.
Ankit Saraiya
I’m not clear on the question.
Chinmai Kabra
What so the costing aspect, you mentioned that there are two models, CapEx and OpEx. Wanted to understand the rentals that we are projecting from the IAS services that we will be offering.
Ankit Saraiya
So these services will be to really count them numbers because the opportunity is new for such and in percentage terms to revenue contribution, the — sir, I’m sorry, I’m not audible. Your line is breaking up in-between, sir am I audible? Am I better? But this is much better, sir. Yes. So saying that any kind of value-added services or services out of infrastructure as a service, it’s very difficult to today estimate a revenue out of it or a margin out of it, because these opportunities are today limited with us and they will take time to build. And at least for the initial few initial year or two, they will be contributing a few percentage only to the co-location services.
Chinmai Kabra
Understood. And for the IAS services that we are planning to again provide, since we will be sourcing the hardware and the tech, do we have any plan in terms of — will we be sourcing it from outside India or from India itself?
Ankit Saraiya
So see most of these today, most of the technology is available in India and there are global players as well as some domestic players which are providing these platforms. So depending on the end-customer requirement, we may source from either of them because some customers have a preference for domestic players given neighboring country regulations and rules and some customers have a preference of global player given the majority of the technology. So it would really depend from customer — as per customer preference.
Chinmai Kabra
Okay, understood. Just wanted to take one last question, if it’s fine. Yeah. So just wanted to understand in terms of the smart metering business, what is the number of smart meters that we have, I mean, which have been given operation go-live status and how — I mean is the receipt of money for setting up the smart meters, I mean moving smoothly?
Padam Gupta
Yeah, it is going very smoothly. We have already achieved a chat of about 4.5 lakh metres in the state of NB at for about 1.75 lakh metres, another about 2.75 lakh Srinagar and Japu in Kashmir and they are going very well there is no challenge. Ministry of power conducts a review meeting every week with all these state discoms and they are very serious to make sure no wrong happens in smart meter deployment and payments.
Chinmai Kabra
Understood, sir, thank you.
Operator
Thank you. Ladies and gentlemen, we will take that as our last question for today. I would now like to hand the conference over to the management for closing remarks. Over to you, sir.
Padam Gupta
Yeah. Thank you very much. I will say to all of you for joining the conference call and in case you still have any query related to our performance please drop a mail to us. And if you happen to be this side of the city, you are most welcome to visit us. Our data center and smart business happens office, which is on MG Road. So you are welcome to visit whenever you are on of that side of the tau and I thank you once again for each one of you for joining the call.
Operator
[Operator Closing Remarks]