In This Article:
Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Schneider Electric Infrastructure Ltd (BOM:534139) reported a significant rise in sales, achieving the highest ever sales in a quarter with an 18.2% increase over the previous year.
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The company experienced a robust growth in orders, with a 13.8% increase over the prior corresponding period, indicating strong market demand.
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EBITDA saw a substantial rise of 34.5%, reflecting improved operational efficiency and cost management.
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The company is actively expanding its capacity, particularly in the transformer line, which is expected to enhance production capabilities and meet future demand.
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Schneider Electric Infrastructure Ltd is well-positioned to benefit from government initiatives in renewable energy and infrastructure development, including solar, nuclear, and green hydrogen projects.
Negative Points
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The order intake growth for Q3 was relatively slow at 5.3%, indicating a potential slowdown in new business acquisition.
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Other expenses have risen significantly, by 35-40%, which could impact profitability if not managed effectively.
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The company faces challenges related to currency fluctuations, although it has a hedging policy in place to mitigate risks.
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There is a noted shortage in critical components like CRGO steel, which could affect production timelines and costs.
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The company's order backlog growth was modest at 7%, suggesting potential challenges in maintaining a strong pipeline of future projects.
Q & A Highlights
Q: Your order inflow was a little slow in Q3. How is your deal pipeline and future outlook in terms of orders going forward? A: The slowdown was more of a timing effect due to multiple project orders from various stakeholders. The pipeline is healthy, and we don't foresee any roadblocks. - Managing Director and CEO
Q: Your other expenses have risen significantly. Can you provide insight into this trend and whether operating leverage will benefit the company moving forward? A: Other expenses have grown by 35-40%, mainly due to sales-related provisions and internal investments to strengthen the organization. We are building capabilities for the future, and we expect to optimize these expenses soon. - Chief Financial Officer
Q: What is the status of the expansion at your Kolkata factory? A: The expansion is on track, and we are working to make it one of the key factories of the Schneider Group. It is expected to go live very soon as planned. - Managing Director and CEO