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    Schneider Electric Infrastructure Q1 FY27 earnings call

    SCHNEIDER
    Capital Goods·17 Aug 2026
    Management Summary

    Schneider Electric Infrastructure Limited reported a strong Q1 FY27 order inflow of INR 915 crores, its highest ever for a first quarter, contributing to a robust INR 2,100 crores order book, up 33% YoY. Sales grew 5% YoY, but profitability was impacted by commodity inflation, rupee devaluation, and negative operating leverage, resulting in EBIT of INR 32 crores. The company is strategically focusing on high-growth segments like data centers and semiconductors, which now comprise over 20% of its order bank, and has initiated pricing actions to improve margins in subsequent quarters.

    Highlights

    5

    • Order inflow for Q1 FY27 was INR 915 crores, the highest ever Q1 booking, with 0.5% YoY growth and double-digit QoQ growth.

    • Strong backlog of INR 2,100 crores, representing 33% growth, providing good visibility for Q2.

    • Sales grew by 5% YoY and double-digits QoQ, despite Q1 being historically a soft start.

    • Strategic focus on high-growth emerging segments (data centers, semiconductors) which constitute over 20% of the order bank.

    • Initiated pricing actions to mitigate commodity inflation and expects the balance three quarters of the fiscal year to be good.

    Concerns

    4

    • EBIT for Q1 FY27 was INR 32 crores, lower than last year, impacted by gross margin pressure and negative operating leverage.

    • Gross margins were impacted by commodity inflation (copper, aluminum, steel) and the devaluation of the rupee (approx. 8% depreciation since year start).

    • Inability to enforce price variation clauses in all government tenders, leading to margin pressure on legacy orders booked before December last year.

    • Higher import content and FX depreciation contributed to increased other expenses and impacted overall profitability.

    Key financials

    Single quarter

    05 metrics
    1. 01Order Inflow₹915 Cr+0.5%YoY
    2. 02Order Book₹2,100 Cr+33%YoY
    3. 03Sales Growth—+5%YoY
    4. 04EBIT₹32 Cr
    5. 05Total Income Growth—+1.9%YoY

    Order Book

    high confidence

    Total Value

    ₹ 2,100 crores

    as of 2026-06-30

    quantified
    33.0% YoY

    Inflow this qtr

    ₹ 915 crores

    Execution

    average turnaround time for orders

    Composition

    Mix2 segments
    • Emerging Segments (Data Centers, Semiconductors)20.0%
    • Power & Grid40.0%

    Share of order book by segment · partial disclosure (60.0% of book)

    Pipeline

    other

    Underlying demand environment and opportunity pipe is healthy

    "The company achieved its highest ever Q1 order booking of INR 915 crores, contributing to a strong backlog of INR 2,100 crores, which grew 33% YoY. The order book composition is shifting towards high-growth emerging segments like data centers and semiconductors, which now account for over 20% of the total."

    Source:
    Prepared remarks

    What to watch in Q2 FY27

    4

    Sales Growth and Operating Leverage

    next quarter
    Current5% YoY sales growth, negative operating leverage in Q1
    TargetImproved sales growth and positive operating leverage

    Why it matters

    Management expects to catch up📎 on negative operating leverage and for Q2 to be better than Q1, which is crucial for overall profitability.

    The sales we talk about is a 5% more moderate growth as Q1 and we see historically linearity that yes, it's the Q1 always a soft start happen after the financial year close. [...] sales growth, we are at so moderate at 5%, there is something in the Q1 as negative operating leverage. But for sure, that is not going to be there and you must have saw in the last year that it get even it out throughout the year.

    Risks & concerns

    6
    RiskSeverity

    Rupee devaluation and FX impact on costs

    Rupee depreciated by about 8% since the start of the year, impacting dollar-denominated expenses and imported components. — Management acknowledged

    medium

    Commodity price inflation

    Prices of copper, aluminum, steel, and labor have increased, impacting gross margins. — Management acknowledged

    medium

    Negative operating leverage in Q1

    Moderate sales growth of 5% in Q1 combined with normal salary increments and cost inflation led to negative operating leverage, expected to be caught up in subsequent quarters. — Management acknowledged

    low

    Margin pressure from legacy fixed-price orders

    Orders booked before December last year had firm prices, making it difficult to pass on increased raw material costs, impacting current quarter margins. — Management acknowledged

    medium

    Inability to enforce price variation in all government tenders

    While new contracts include price variation clauses, it's challenging to enforce them in all government tenders, posing a risk to margins if project execution is delayed. — Management acknowledged

    medium

    Execution delays impacting gross margins

    Delays in customer project execution could further impact gross margins, especially for orders without price variation clauses. — Management acknowledged

    low

    Q&A highlights

    8

    “Mr. Dhruv, we actually -- the products which we have, as you know, are transformers. We have equipment which handle and distributes power up to 33 kV range. And then we have the control and relay panel, which also becomes an essential part of any power system, I would say, which we go to any class of voltage. Now especially what we do not have is transmission line conductors. We do not have transformers, which are which we call as a high-voltage transformer or extra high-voltage transformers, which are 400 kV and above. So that really is not the transmission sector, if I may say so, is not the real work for us in the transmission space.”

    Clarifies the company's specific product portfolio and market focus within the broader transmission sector, highlighting what they do and do not offer.

    asked by Dhruv Rawani

    3 min read6 chapters

    Detailed Narrative

    01

    Macroeconomic Outlook and Growth Drivers

    India's macroeconomic outlook remains strong, with GDP expected to grow 6.5-7% for the next four years. Key drivers include a projected 1.5x increase in per capita GDP to INR 4 lakhs by 2030, and per capita electricity consumption rising to 1,800-2,000 kWh by 2030. The company identifies four fundamental levers for long-term growth: electrification (non-fossil fuel share, energy storage systems expected to reach 200+ GW by 2030), data centers and digitalization (capacity to grow from 1.6 GW to 8 GW by 2030), urbanization (EV penetration to 30% by 2030, Vande Bharat trains to 800), and the 'Make in India' initiative driving capex requirements.

    02

    Q1 FY27 Financial Performance and Margin Pressures

    Q1 FY27 saw an order inflow of INR 915 crores, the highest ever for a first quarter, contributing to a robust backlog of INR 2,100 crores, up 33% YoY. Sales grew 5% YoY, which was considered a soft start for the quarter. However, EBIT stood at INR 32 crores, lower than the previous year, and total income growth was 1.9%. This was primarily due to gross margin compression caused by commodity inflation (copper, aluminum, steel) and the approximately 8% devaluation of the rupee, which increased import costs. Negative operating leverage also played a role, as fixed costs and salary increments impacted profitability on moderate sales growth.

    03

    Order Book Composition and Strategic Focus

    The company's order book composition is evolving, with more than 20% of the current order bank coming from new emerging segments, primarily data centers and semiconductors. Power & Grid segments continue to represent around 40% of the backlog. Management emphasized its strategic focus on these high-growth areas, leveraging government PLI schemes and the 'Make in India' initiative. The average turnaround time for order execution is about six months, indicating a steady conversion of the backlog into revenue.

    04

    Capital Expenditure and Capacity Expansion

    Over the past three years, the company has invested approximately INR 500 crores in capex across its three plants. This investment aims to enhance capacities in its medium voltage factory in Baroda, transformer factory in Baroda, and the new plant in Kolkata. The Kolkata plant, which started operationalizing earlier this year, is specifically geared towards catering to the export market. These expansions are intended to reduce import dependency and align with the government's RDSS scheme, which focuses on strengthening power distribution infrastructure and digitalization.

    05

    Pricing Strategy and Commodity Volatility

    To counter commodity inflation, the company has initiated pricing actions. However, legacy orders booked before December last year, which had firm prices with a revision period of around six months, are still impacting margins as raw material costs have risen. While new contracts now include mandatory price variation clauses, enforcing these in all government tenders, especially those backed by EPC, remains a challenge. The company's import content is 10-15% of COGS, but this is naturally hedged by a similar range of exports.

    06

    ESG Commitments and Skill Development

    Schneider Electric Infrastructure Limited highlighted its strong ESG commitments. All four manufacturing sites achieve 100% CO2 emissions reduction, with 100% electricity sourced from renewables. The company maintains a zero-workplace incident record and has increased gender diversity among workmen to nearly 20%. Significant efforts are also directed towards skill development, with approximately 1,900 skills trained through 16 centers in Gujarat, and community electrification programs benefiting around 220,000 individuals.

    This is an AI-generated summary of a publicly available earnings call transcript.