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What TV doesn't, print can't; we deliver.
Schneider Electric Infrastructure (SCHN IN) has reported a strong performance in Q2.
NEW DELHI: Schneider Electric Infrastructure (SCHN IN) has reported a strong performance in Q2, showcasing robust growth in sales and inflows, fueled by better pricing and healthy segmental demand. The company witnessed a significant uptick in government and private sector capital expenditure, leading to increased demand for its core equipment category, which includes transformers and switchgear. Along with rising service and export contributions, SCHN has steadily improved its margins, signaling positive growth prospects.
The company’s Q2 topline surged by 21% year-on-year (YoY), primarily driven by strong performance in its Transactions and Services segment. The mounting order book, coupled with efficient execution, contributed to the growth. Equipment sales accounted for 49% of the revenue, with Transactions contributing 19%, Services 11%, and inter-group transactions making up 21%. Management anticipates this growth momentum to continue over the next 3-5 years, underpinned by India’s growing energy needs, driven by initiatives such as the Make In India campaign, renewable energy capacity targets, and a rapid shift toward electric mobility and 5G infrastructure.
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Order inflows also saw a 16% YoY increase, totaling INR 5.7 billion in Q2, with a 7% quarter-on-quarter rise in the order backlog, now at INR 13.9 billion. This growth was fueled by robust demand across all business segments, including Energy & Chemicals, Automotive, Data Centers, and Power & Grid. SCHN also secured key orders from sectors like Metals, Mining, and Metro, with some including the company’s newly launched Ecocare solution.
Despite a rise in gross margins by 140 basis points to 37.3%, driven by better pricing and product mix, EBITDA margins declined slightly by 20 basis points YoY to 12.4%. The dip was attributed to a 53% rise in other expenses, including higher variable sales costs, increased corporate social responsibility (CSR) spending, and higher customer support and risk coverage expenses.
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Looking ahead, SCHN remains well-positioned to benefit from India’s decadal growth story in Power Transmission & Distribution, with strong demand expected for T&D equipment as the government moves towards rapid electrification. The company’s decades of expertise in T&D, combined with consistent product innovation and strong parental support, positions it as a leading player in the sector.
