InCred Equities issues Buy call on Techno Electric Engineering with ₹1,600 target

The brokerage highlights the company's growing focus on data centre infrastructure as a key driver of future growth. Techno Electric currently operates an edge data centre facility with a total capacity of 800 kW, of which around 430 kW is IT load. The facility hosts 50 racks and operates with a Power Usage Effectiveness (PUE) of 1.86.

Management has indicated that approximately ₹18-20 crore in capital expenditure will be required for the current facility, leveraging its existing civil structure. The company charges between ₹9,000 and ₹11,000 per kW per month for colocation services, while the broader portfolio yields are currently in the range of ₹10–11 crore per MW.

Current operating margins for the data centre business stand at 40-45 per cent, with potential to reach 70-75 per cent when power costs are excluded. Techno Electric has about 60 MW of data centre projects under development and plans significant capital investment over the next two years to expand across Noida, Chennai, Mumbai and Gurgaon.

The visit to the facility provided insights into the company's operating model, customer traction—including demand from RailTel—and its expansion strategy. InCred Equities views the data centre segment as an emerging growth opportunity that could significantly contribute to Techno Electric's future performance.