Buy Techno Electric & Engineering Company, target price Rs 340: JM Financial

JM Financial has buy call on Techno Electric & Engineering Company with a target price of Rs 340. The current market price of Techno Electric & Engineering Company Ltd. is Rs 285.5. Time period given by analyst is one year when Techno Electric & Engineering Company Ltd. price can reach defined target.

Techno Electric & Engineering Company Ltd., incorporated in the year 2005, is a Mid Cap company (having a market cap of Rs 3150.95 Crore) operating in Engineering sector.

Techno Electric & Engineering Company Ltd. key Products/Revenue Segments include Income from EPC,Contracts,& Others, Power and Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 310.64 Crore, down -26.66 % from last quarter Total Income of Rs 423.58 Crore and up 39.22 % from last year same quarter Total Income of Rs 223.14 Crore. Company reported net profit after tax of Rs 37.09 Crore in latest quarter.

Investment Rationale
The brokerage builds in higher in order inflows from FGD and smart meters (new business areas), resulting in increase in our EPC revenue assumptions by 5-7%, but lower EPC segment margin assumptions by 150-200bps to 12.5%/12% for FY23/24. It maintains BUY with SOTP based TP of INR340, as it forecasts EPC segment earnings growth CAGR of 10% over FY22-24E. Key risks: Negative surprise in new business margins and cash burn in data centres segment.

Promoter/FII Holdings
Promoters held 60.18 per cent stake in the company as of 31-Mar-2022, while FIIs owned 1.24 per cent, DIIs 27.33 per cent.