Techno Q2 FY27 core EBITDA rose 63% as SPVs lifted margins

In Q2 FY27, Techno Electric & Engineering Company Limited reported consolidated core EBITDA of Rs 181.4 crore, up 63.0% year on year, while smart-metering special-purpose-vehicle (SPV) execution lifted consolidated core EBITDA margin to 16.38% from 13.2% as revenue rose 31.4% to Rs 1,107.9 crore.

Why did Techno's Q2 core EBITDA rise 63%?

Techno's Q2 FY27 core EBITDA rose faster than revenue because consolidated margin expanded by 3.2 percentage points to 16.38% from 13.2% in Q2 FY26. Management attributed the margin increase to consolidation of margins at SPV level, particularly in the smart-metering business as execution increased. Revenue from operations increased by Rs 264.5 crore to Rs 1,107.9 crore, while core EBITDA increased by Rs 70.1 crore to Rs 181.4 crore.

The revenue increase was driven by execution across transmission engineering, procurement and construction (EPC) projects and advanced metering infrastructure (AMI) installations, according to management. Operating expenses rose 26.5% to Rs 926.4 crore from Rs 732.2 crore, a slower rate than the 31.4% increase in revenue, consistent with the increase in consolidated core EBITDA margin.

The Q2 pace was higher than the first-half growth rate. In H1 FY27, Techno reported revenue of Rs 1,738.2 crore, up 26.9%, and core EBITDA of Rs 281.0 crore, up 37.9%; the H1 core EBITDA margin was 16.16%, compared with 14.9% in H1 FY26. Q2 therefore accounted for Rs 181.4 crore of first-half core EBITDA and carried a 16.38% margin.

Did Techno's standalone EPC margin improve in Q2 FY27?

No, Techno's standalone core EBITDA margin declined to 13.45% in Q2 FY27 from 13.77% a year earlier, even as standalone revenue rose 30.8% to Rs 1,096.8 crore. Management said the 13.45% result remained within its guided 13% to 14% band, but the 0.3-percentage-point decline contrasts with the 3.2-percentage-point increase on the consolidated basis.

Standalone core EBITDA increased 27.8% to Rs 147.5 crore from Rs 115.4 crore, below the consolidated 63.0% increase to Rs 181.4 crore. The Rs 33.9 crore gap between consolidated and standalone core EBITDA reflects the contribution of consolidated entities, with management specifically identifying SPV-level smart-metering margins as the driver of group margin expansion.

The same distinction appears in the half-year figures. Standalone H1 FY27 core EBITDA margin was 13.61%, down from 14.38% in H1 FY26, while consolidated margin rose to 16.16% from 14.9%. Techno therefore reported revenue execution growth in standalone EPC and AMI operations, but management attributed the reported consolidated margin improvement to the SPV structure rather than a standalone margin gain.

How did Techno's margin growth translate into quarterly profit?

Techno's Q2 FY27 profit before tax (PBT) rose 41.8% to Rs 197.9 crore and profit after tax (PAT) from continued operations rose 52.4% to Rs 158.5 crore. Both growth rates were below the 63.0% increase in core EBITDA, partly because other income declined to Rs 28.5 crore from Rs 37.5 crore and depreciation increased to Rs 6.3 crore from Rs 2.4 crore.

Management said other income was lower because capital was being deployed in tariff-based competitive bidding (TBCB) assets. Finance cost fell to Rs 5.7 crore from Rs 6.8 crore, partly offsetting the changes in other income and depreciation. Tax was Rs 39.5 crore in Q2 FY27 compared with Rs 35.6 crore a year earlier; management said there were no deferred-tax adjustments during the period, supporting the reported PAT increase.

On a standalone basis, PAT rose 10.3% to Rs 136.1 crore, trailing the 22.7% increase in standalone PBT to Rs 177.0 crore. Management attributed that gap to an effective tax rate of 23.2%, versus 14.4% in Q2 FY26, when one-time deferred-tax adjustments affected the comparison. Consolidated PAT margin rose to 14.3% from 12.3%, while standalone PAT margin fell to 12.40% from 14.71%.

What execution milestones could affect Techno's next results?

Techno reported AMI portfolio-wide installation completion of 85% in Q2 FY27 and scheduled 100% completion by the end of FY27. Greater smart-metering execution was the mechanism management cited for higher SPV-level margins, making the completion schedule a disclosed operating milestone for the business that lifted consolidated profitability in the quarter.

In digital infrastructure, Techno said Chennai Phase 1 was operational with customers onboarded, while Noida Phase 0, with 500 kilowatts of information-technology load, was operational and had a customer tied up. The Andhra Pradesh data centre, with 2 megawatts of facility load, had started construction and was scheduled to be operational by H1 FY28 under an end-user memorandum of understanding.

Techno reported total assets of Rs 6,269.7 crore on 30 September 2026, up from Rs 5,938.5 crore on 31 March 2026. Current investments declined to Rs 2,058.0 crore from Rs 2,200.7 crore, which management said primarily reflected deployment of qualified institutional placement funds toward project execution. Other current assets rose to Rs 2,042.8 crore from Rs 1,704.8 crore and mainly comprised contract assets from transmission EPC projects and AMI and TBCB concessions, to be realised as billing milestones are reached.

Conclusion

Techno's Q2 FY27 result showed a clear difference between revenue growth and the source of margin expansion. Consolidated revenue rose 31.4% and core EBITDA rose 63.0%, but standalone core EBITDA margin moved down to 13.45%; management identified increased smart-metering SPV execution as the reason consolidated margin reached 16.38%.

The next disclosed checkpoints are AMI portfolio completion by the end of FY27 and the planned H1 FY28 start of operations for the 2-megawatt Andhra Pradesh data centre. Techno's results will also reflect the pace at which contract assets, including Rs 2,042.8 crore of other current assets at 30 September 2026, convert into billing milestones under EPC, AMI and TBCB contracts.