Ladies and gentlemen, good day, and welcome to the Schneider Electric Infrastructure Q1 FY 'twenty two Earnings Conference Call hosted by Elara Securities Private Limited. As a reminder, all participants' line will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshad Kapadia from Bilalah Securities Private Limited.
Thank you. And over to you, sir.
Thank you, Bilal. A very good evening to everyone. On behalf of Elara Securities, we welcome you all to the Q1 FY 'twenty two earnings of Schneider Electric Infrastructure Limited. I take this opportunity to welcome the management of Schneider Electric Infrastructure, Presented by Mr. Sanjay Sudhakarin, Managing Director Mr.
Mayank Golani, Chief Financial Officer and Kavily Jain, Head We will begin the call with a brief overview by the management followed by a Q and A session. I'll now hand over the call to Pankaj sir for his opening remarks. Over to you, sir. Thank you very much, and good evening to all of you. It's a pleasure to be with you this evening.
And My name is Sanjay Sudhakaran. I'm the Managing Director for Schneider Electric Infrastructure Limited. And it's a pleasure for me to take you through some of the highlights of our organization, how the quarter has been and what we feel the economy going forward. If it's okay with all of you, I would like to go straight to Page number 3 of the presentation, which is a quick snapshot of the economic highlights of India during in this period. As you can see that we came out of a very difficult financial year, a year that was unprecedented, And we had never imagined a year to be so dramatic in terms of the pandemic and the implications that it had on the economies, lockdowns and all of it.
We were expecting all of that to be behind us and we were expecting that there could be a Good amount of pent up demand in the economy, which would come back to us favorably as we go into the year. Some of that partially materialized. However, it was also kind of dampened a little bit by the 2nd wave of COVID, which began to hit as this quarter that went by, and some regional lockdowns and implications. And I think probably the severity of the health crisis was even much larger than the first wave. However, I think the economy is more resilient.
Demand is coming back. And we are hoping that the impact of this lockdown will be minimal and we will be able to recover as we go forward into the orders in this year. So that's the brief outlook that I have on the economy. I'll go to the next slide, which is Page number 4, and give you a snapshot on how our end markets we see our end markets. As you all know that we have 4 critical segments: Power and Grid, Transportation Minerals, Mining and Metals and Oil and Gas.
These are the segments that we term as electro intensive and has the most runway for our products and services here. Power and Grid continues to be resilient, I would say. There are a number of reforms that are being announced here. There is a big thrust on renewables. India is one of the few countries that are well on track to execute on the Paris agreement.
Our plans are having almost 4 50 gigawatt of renewable energy installed by 2,030, seems to be something which the government Totally committed to there is privatization happening, there is a big thrust to cut losses in transmission and distribution, introduction of smart metering and digitization projects to enable that. So all these are very good lead indicators. Though the sector was a little bit plagued due to the COVID wave, the second COVID wave And the projects were slowed down. You had certain situations where the government spending on Healthcare had to be increased and that sort of saw less funds being diverted into this particular segment and you had a kind of sluggishness in the progress of the projects, but I think this is all coming back because we have very clear backbone that the country is On the transportation side, there are a number of projects that have been announced in terms of urban transportation, bullet trains, high speed trains and corridors, etcetera. All these are expected to close.
These projects are expected to close in terms of orders for us in the quarters going forward. So we see a good traction on this segment as well. Minerals, Mining and Metals, we were kind of having a feeling that this could be the results could be next year. However, we see good amount of CapEx in this particular segment. We have cement capacities being ramped up, steel capacities being ramped up, a number of Sustainability driven initiatives in this particular sector in line with the sustainability goals of the corporations being introduced and that sort of kind of has picked up the demand here.
We see good orders here and we see good orders going forward as well. Oil and Gas as a sector remains cyclic and the demand is not expected to pick up in a big way during this year. Demand will remain muted and there will be a shift towards renewables as we go forward. In addition to this, I think the building segment, the demand will remain muted because there is not much thrust on return to offices. So there will be a kind of a slowdown on the buildings market.
However, there are certain sectors within the buildings market like Hospitals and data centers, which are expected to give us good returns and we are continuously invested on these segments as well. So I'll now go on to Page number 5. That is just to articulate once again our strategy and our commitment to our long term strategy, which is to lead by software, which is more digital, concentrate on more services and recurring revenues, increase our coverage across India through our licensee partner models, accelerate our resilient segments and introduce greener products into the market, which is our contribution to the sustainability journey of the country. So these are our key strategy priorities. And quarter after quarter, we ensure that we will remain committed to these particular initiatives.
Going to Slide number 6, just to bring about a flavor of how we are going ahead on and executing our strategy. Leading with software, I spoke about it as one of our key strategic priorities. We continue to stay invested here. Here is an example of an Atomyc R and D Center in Wysak that we have just completed. It uses our EcoStruxure for Grid platform, which is the Which is the ePass platform to be able to provide instant fast load shedding to the customers.
We work very intricately with the customer, connecting all their medium voltage products and providing them with the relevant software interface to be able to take informed decisions. I'll go on to Page number 7. Here again, we'd like to highlight the connected product story. We have sold almost 99 AIS Insulated panels to a customer in the Power and Grid segment, which is primarily a connected product with temperature and humidity sensors and numerical release, another example of how we are taking our digitization journey forward. I'll go on to the next slide, which is Slide number 8, our commitment to more services.
Here is an example of how we are serving a leading government hospital chain by providing them with remote diagnostics on the electrical powertrain, 20 fourseven monitoring and predictive maintenance so that they are able to take, again, take informed decisions well in advance and bring down the pressure on their infrastructure as far as people intensity of maintenance goes. This also leads to lower operating costs and make sure that the hospital invests in areas where they are supposed to invest, which is patient, health care and experience rather than in maintenance. Going forward to our story on increased coverage and our license Partner program here is an example of how our partner in Kolkata turned around a hospital for the government within 8 days 8 weeks, I'm sorry, to be able to meet with the pandemic pressure that it created on the healthcare infrastructure. So having more partners, empowered partners, licensee partner Products which are licensed by Schneider to them helps them in making sure that we serve our customers with agility and speed. And we intend to ramp this program even further going forward.
I'll go to Slide number 10. Here, we talk about our connected product story. So in the quarter that went by, we launched 3 more connected products, which is the connected FDI, the connected transformers, and you also launched the EasyPack Fixed ROF, which is another connected product. So I think we continue our journey towards digitization as far as new product launches are concerned as well. With this, I end the update on the strategy, and I will request Mayank Hollani, CFO for Schneider Electric Infrastructure Limited to take us through the financials of the organization.
Thank you. Thanks, Sandeep. So Slide number 12, so the market continues to be uncertain and We all can meet you with the new offer. Q1 of current year was impacted by COVID-nineteen and selective lockdowns during April, May and even in some places in June. Few customer sites were closed and some many other customers and the PPC contractors were facing liquidity challenges also.
And we continue to be cautious on order booking and especially in terms of securing our cash and Margins, maintaining the right level of margin. For Falsight Group order intake for this quarter stood at around INR2900 million or INR 2.90 crores, which is up by about 16% over same period last quarter last year. So considering the reinvestment, we've seen it's fairly even any good growth in others. Now moving on to sales. We have seen a strong comeback in execution and which is We were more impacted due to the lockdowns because of the site issues and the restrictions on mobility.
Still, we had a growth of about 38.6 6% versus last year same quarter. And why it has mainly come obviously due to the low base impact of last year because Actually, we were mainly invested in previous year. So that is still we have a growth of 38.6% on the sales part, And which has come primarily from systems and products. So moving on to next slide on P and L. Overall, the performance in terms of our profitability is aligned with our strategy.
We are focused on margins and cash, And we will continue this journey. The quarter was bad in terms of raw material price movement and the impact on commodity, Mainly the commodities which are used in our products like mainly copper, steel have been impacted by the inefficient And their prices have increased significantly. We continue to monitor it closely and we have to actively approach With all our customers and trying to mitigate those exposures. So we are working on getting the price amendments wherever they are required In possible. And still with this, EBITDA margin improved by about 3.9 points and that's almost at our breakeven level.
And Anurag, as we look at it in terms of introspective, this is where the margin level is I close here and we'll leave the floor open for questions
Thank you. Thank you very much. So ladies and gentlemen, we will now begin the question and answer session. We have a first question from the line of Anuj Jain from Globe Capital Markets. Please go ahead.
Good evening, everyone. Actually, I wanted to know your view on this Smart meeting the kind of thing, how the domain push on this particular thing? And pardon me Because I joined the call a bit late. So if you will have given some light on the same idea, please repeat for me. So what is your view on this smart meter thing?
And how big is this opportunity? And how we are ready to grab this particular opportunity? Okay. So thank you for asking this question. We did touch upon it briefly In terms of the power and rig sector, as I was doing my presentation, the key aspect here is the government is very, very keen on driving reforms in this particular sector of power distribution.
So there is a very strong mandate to cut distribution losses. And one of the first areas in cutting distribution losses is to have good measurement. And at the same time, the government is committed to providing consumers with Good quality power and 20 fourseven uptime. So I think these are some of the thrust areas in the policy and forms which are leading to the smart metering growth. Now smart metering growth does not really come only with meters growth.
It comes along with software growth as Because at the end of the day, when you are installing such large number of meters at consumers, With consumers, what you need is an interface that can not only measure what's going on, but it can also give you diagnostics and tell you Fault protection and things like that in advance so that you can take corrective actions. So software is going to be a very key aspect of this growth as as well. And as you know, we are well poised in this area of software. We have done Projects like smart cities of Ma'araiipur, etcetera, with advanced metering software, which is called ADMS, which is the advanced distribution management systems. We have the know how, we have the technology and we feel that this provides us With a good runway as far as opportunities of projects as well as recurring revenues of annual maintenance contracts are concerned.
Putting a value to this opportunity is kind of difficult because this is going to be a multiyear deployment plan and such things are not that easy to implement in a country of our size. So I think as these opportunities come up, we will be able to quantify them. There are a number of such in discussions with the DISCOMs, And the specifications are being frozen, the RFPs are being created, but I think it's hard to put a number onto it right now. Okay, sir. And any plans of raising any capital, I mean, any Thanks for bringing capital in new features.
If you would like to touch upon the 3. Mayank, Yes. So, 3, as this is still there is no plan from the next few quarters. So we are testing something from the premium yet. Okay.
Okay. Thank you, sir. Thank you. That's it for my
Thank you very much. The next question is from the line of Viraj Mittani from Jupiter Finance. Please go ahead.
Hello? Yes, Suraj, we can hear you. Okay. I have a couple of questions. The first question is about the raw materials.
When I see this Number how do we plan to mitigate the raw material inflationary pressure in coming and days to come? Should I continue all my questions and will you answer it? Your choice, we can take it 1 by 1 as well. Okay. So on the raw materials, what we'd like to highlight is that we have a very strong governance system, thanks to the processes of Schneider Electric, globally, we have been kind of getting alerts well in advance highlighting the raw material impact.
And we have been taking proactive actions to price up in line with the RMI increase that we have been seeing on different commodities. So we have kind of, On the future looking contracts, we have managed to price this up and pass on these commodity increases to the market to the best of our ability. Now you can see that there is another impact of the commodity increases on the backlog. So on the backlog, we have been carefully studying all our contracts. Some of our contracts do have variable pricing clauses incorporated and then in line with the EMA, which exists in the country.
And we are able to pass this on, but this is a small portion of the contracts. The second Part is of the contracts which are expiring due to the contractual obligations are expiring for the orders in the backlog due to whatever relay, delays in site and execution and things like that. Here, we are going back to the customers and renegotiating our contracts or even canceling them from our backlog in case it is not viable. So we have been taking very strong actions as far as mitigating the commodity risk is concerned. And just to add to this, what happens based on the forecast which we get from our Global teams on a monthly basis, we keep revising our costing for the fresh standards or codes which we are doing so that no risk is covered.
And also if you see even with this kind of long term inflation, the numbers you see, we don't go we need to go by the exact That's comparable to last year's quarter one comparison is not the right because due to the lockdown and all the mix had changed. But if you look at this quarter's mix is more or less similar to the full year mix or even the gen to March quarter mix. And this material cost percentage has actually improved, right? So there is a it's better than the last year full year material cost So, Santelian, even better than the Jan 2 March quarter. So even instead of all these commodity inflation, We have been able to improve the term that we informed itself.
And this employee benefit expenses because of this So our program to it was a BRS, it was BRS? No. So that BRS thing comes into the exceptional. So what happens is the employee cost last year in Q1, due to under the pandemic, late end of the lockdown time, There were certain technical actions taken for cost savings. So now those are coming back.
And then also there is some impact of the selling efficiency, which has come and which the total Takes it to higher and in the 11.2% increase which you see, which is the growth is partially offset by the savings It is a structural changes which we did in last year. So the end of whatever year end on year end, in the run cost, the savings are coming in this year. And other expense, I understand there's exchange contracts and all which has gone on by 8, 9,000,000 There are multiple sectors, so there are certain expenses which are linked to the volume like power and fuel, Which is better, that is or not as maybe 100% proportion, but partly linked to the volume. And then there is ForEx impact. Then the travel was higher like last year.
There was almost no travel in Q1. So this was still a lot of trouble going on because business was running so people were selling emergency. So there are multiple sectors in that. Okay. My next question is, your company our competitors like EBB, ABD Power, they have been very Bulish on data centers, railways, cybersecurity and power distribution.
So do we see any some traction in this industry in India? Or can you give some color on that? Yes, for sure. I think we I spoke about it in my opening remarks as well. If you see the data center industry in India, we can be extremely bullish about because of the fact that There are there's a twin effect here.
One is the fact that there is an explosion of data, primarily driven by work from home and all the digital gateways and digital ways of working and payments, etcetera, is concerned. The second is due to regulation, wherein the government has mandated that Data for the country should rest within the country and should not rest on cloud elsewhere. So you can see that there is a huge expansion in data center segment, And you will see the benefit of that coming into the Schneider Electric Infrastructure business also as we go along in these quarters. Regarding railway infra, in which application, we don't have any part in that. Am I correct with you, Michel?
No, we have.
We have some good products like Locos, which are especially used in urban transportation such as metros, etcetera, and high speed trains. So I also spoke about this as one of the segments where we are poised very well for this year in terms of the projects and the pipeline, etcetera. We expect to do very well on the transportation side in terms of urban transportation, specifically like metros and high speed corridors and things like that. And sir, about the data centers, where do we fit in? Like what kind of offering Something to it.
If you can just give us some color on that, please. Yes, sure. I think data centers are pretty much electro intensive. If you see the kind of data centers that are being built in India now, the scale is increasing day by day and you can see more and more kono investments coming into country. You would have read about Yonder coming in with a private equity firm with India.
You have, must have heard about Companies like NTT, YUTA and all expanding, we have certain market intelligence about Microsoft and other players also setting up large data centers in India. And data centers are also highly electro intensive because they need to be powered. So you can see that you have this entire train of medium voltage products, which will go into the data centers. In addition to that, you have a software play because data centers are highly sensitive to Uptime. So you need a 20 fourseven operation, some redundant operations and things like that and have to be controlled by software.
So there is a software play in it, which we see as a very large opportunity and multi year of service revenue business, which comes along with software. That will forward a part of a medium voltage offering, am I just correct with you? Yes. Yes. That will be the automation of the electrical network, Both low voltage and medium voltage put together, we will automate the network, and that will help the customer in terms of Informed decisions and predictive maintenance, etcetera.
It's not. Maybe the powerful example is the Lambada platform for next This is very encouraging. Do we have any sort of offering from our parents in this country? This company has any play on this EV segment in Q2? Our play on the EV segment in India would be around the electrification projects right now.
We are currently we have not right Now embarked upon the charging equipment as such, but we are actively pursuing On the electrification and automation space. You see, I'll we can what is going to happen due to this rapid increase in EV charging is that you are going to now have many charging stations, which are in parking lots, which are on the highways, etcetera, which will use a mix of energy. They will use a mix of grid energy as well as renewable energy like solar. So we will be moving away from our centralized Generation and transmission of power to a more distributed network. What this will do is it will add complexity to the grid.
And as the grid becomes more complex, you will need more software like the ADNX software that I was talking about to manage the grid. And this is a good example opportunity for Schneider as it has made a number of acquisitions Recently, also in this space, we talk about etap and things like that, which have good software offerings, which will be available to our company to kind of promoting the market for our consumers as well. And sir, I'll just ask 2 questions. What's are the lower hanging fruit in this sector, which You can see that neither would be benefit coming next year. For the EV charging?
No, EV, data centers, There's railway electrification, solar power, distribution by the Government of India, the shipment reforms by government, where we see our traction in next Coming 2 years. In terms of the lower end includes, not just I guess to take part a little bit of a long term medium term to grow. So where do you see the traction happening in, say, next Q3, if I were to ask you? See, I like we spoke about, we see actually the traction in all areas. It is not just a single area I can In all areas, it is not just a single area I can name because we talked about reforms in the power and grid segment.
And we talked about the rapid investment in urban infrastructure on transportation. We spoke about data centers and the Complexity that it brings along with software. We spoke about EV charging and the opportunities that it is. So I think the entire electrification story of India tied into the twin areas of electrification and digitization going forward, which represents a very good opportunity, I would It is not it's hard to call out a particular sector to say that this is a low hanging fruit. I think all of these we are well poised to take advantage of.
Does that answer your question? Hello? Am I there,
Vinit? Yes, you're there, sir.
Yes, we can hear you.
We will move on to the next question. That is from the line of Manish Goyal from Enam Holdings. Please
go ahead.
Yes. Thank you so much. Sir, just would like to carry forward on the DISCOM side. So like it's been a long wait. And do you think now that from the government side, In terms of cabinet approval and other things, most of the things are done and now the ball is in hand of The SCVs or the implementation partners, how do you see when do you see that inflection point coming in and On ground implementation improving.
Also related question is that I just want to get a sense that now I think We probably see a different mechanism where we will have players offering integrated solutions and like ESL coming in and then offering solutions on basically monthly rentals and things like that. So for you, who would be the ordering source and just want to get a sense how do you see this evolving, sir?
Yes. So this market is going to evolve, right? Like you said, there There will be people like ESL coming in. There will be some software majors who will be coming in because a lot of it would be Very similar what you call as an ERP implementation process. So that would also be there would be large ticket software players entering this market on the end to end utilization.
So All of these could be our customers, our partners, right? It's not that we are going to do all of this alone. We are going To do this in collaboration with people and the nature of our customers would change, the nature of our partners would change. Some of them would be our strategic partners, while some of them would We have customers. So I think there's a whole lot of mix that is possible here.
Okay. So there could be a possibility that We can be part of some consortium and probably look to offer the solutions.
Absolutely. Absolutely. That's how we are going about doing it, Ashwin.
Okay, okay, okay. We stick
to our core expertise, which is the software platforms. We understand the electrical network. We have the global R and D expertise and software and solution architects available with us. So we have experience of doing these projects as well. So we are open to partner with anybody who has The scale to implement such a project in India.
So I think the landscape will change in terms of the customers.
And have we started seeing any inquiries? Or you expect that it will still take some time and
No, no. We are seeing inquiries, and we are actively working on Good prospects in this particular area.
Okay. Okay. And sir, like in your initial commentary, you mentioned that we expect demand to come back and hope to recover lost ground. So like what is the like would like to get some sense as to what is the intensity of the momentum like? Are we really seeing very strong momentum building up and then we probably, on a full year basis, we should start seeing double digit growth for us?
So I wouldn't like to comment on I'd like to comment only on the end markets, okay? I wouldn't like to comment any forward looking statements on our performance. I would like to say that the end markets are kind of mixed, as I mentioned. It also depends upon the health situation in India, the COVID crisis in India, how it pans out in the next few quarters. But we are seeing some very good demand coming back like we spoke about the Minerals, Mining and Metals Industry coming back very strongly, The transportation sector coming back very strongly.
And we also feel that with all these reforms and thrusts, I think the power and grid sector should also come back strongly. We spoke about good traction on the data center side and there the expansion goes on irrespective of whatever happens in the on the crisis side and lockdowns, etcetera, because those projects keep getting executed because you can't stop the data, work on the data. So I think all these Things should give us reasonable confidence that things should pan out well in the next few quarters. However, The second cold crisis has taught us that it's hard to have a crystal ball to try and understand what goes forward. So I think that's the cautious optimism that I would like to talk about.
Sure, sir. And I would like to have some bookkeeping And if you like, can in terms of the breakup of order book, order inflow and revenue share, sir, as like always we share for the quarter.
Yes, hi, Manish. So, our other growth, as I told you, it was about 16%. And just to move to your question on the momentum. So even in January quarter, we had a growth of January quarter, we had a growth of about 12% on orders. Right?
And the June quarter growth of about 16% comes on a this may be normal days of previous year. So the order booking was Last few quarters, because last year in September quarter December quarter, we had seen orders coming down. So I hope that this momentum continues. So now on your breakup, our orders in this quarter, About 57% is equipment, 10% projects, 25% conversion and 13% services.
Okay. And within order info, can you also give me what was IG's part also? Yes.
So IG IG orders in this quarter of £658,000,000 while last year Q1 it was only £43,000,000
Okay. Okay. Okay. And can you please share the order book? What is the order book and what's
the Our backlog as of U9 is about RMB 817,000,000 to RMB 8,170,000,000
Right.
That was €7507,000,000 at the end of March.
Right. And the breakup, sir?
Breakup is systems as of Q9, systems 70%, transaction 19 And sorry, I will give you, it's 2.53, project 17%, transaction 19, and 3.11.
Okay. And the last piece on the revenue share IG as well as what is the IG and then the Bitcoin
Yes. So revenue share of IG is 25.
Right.
Right. And equipment is 42.
Yes.
7% projects, 17% transactional and 9% services.
No, that does not add up. Can you please repeat? Systems and equipment is how much?
No, no. So 25% IG.
Yes.
42% equipment. Okay. 7% projects.
Okay, okay, got it, got it. So IG is mostly systems only. So
Yes. No, I think IG is services once a day. So IG is a mix of services and equipment, mostly.
Okay, okay, okay. Because usually, always you give the total revenue breakup in systems, transaction and services.
So I
understand you can take up 74. So we will take up 74, yes.
Okay, wonderful. And last question, what would be our debt position as on June?
Gaurav, as of June, right? Yes. So as of June, the balance sheet is not reported As of June 18.
Okay. Right. Okay. No problem. That helps.
Thank you so much.
The next question is from the line of Parimal Methani from Credential
Hello. Can you
hear me?
[SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Yes, very much. We can hear you. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] So thanks for the opportunity and congratulating So I just have two questions, basically. Earlier, you had all of huddled headwinds to a business. Now since your call, you've been thinking that tailwinds for our business.
And how do you see going forward? Because It's been a long wait for us to hear this comment in terms of tailwinds. How do you see Schneider going ahead in Next few years in terms of major things like micro grids, EcoStruxure. And also recently, one of our parent acquired a company called Applied in U. S, which is in terms of clean energy software.
And how do you see me playing a part in role in terms of other C players in the field like ABB, Siemens and You know, of the GEA, which is to some extent there, how do we see ahead of the overhead? And what Can you throw a light on it because it's been a long waiting term? Sure. I think To be very honest, we do seem to have good runway of products, technologies and software in the pipeline with us. And like you have been saying, the wait has been long.
It's always the case because we have to move. Ultimately, you can execute only as much as the market reforms. So the market reforms and the segments that we are talking about are reforming and people are seeing the benefit of Digitization and adoption of software is definitely going up. So you can see those benefits coming back to us in the years as we go forward because we have developed a very good management team capable of serving our It's focused on our end markets and segments very, very well. And we have a good installed base and we are serving those customers as well to services and connected products and diagnostic services.
Now I think the stickiness, we have built the infrastructure around the stickiness as So we should see those benefits coming in, and I'm sure we will be able to keep pace with the reforms that are happening in each of these sectors. Now Schneider as a group is very much committed to software. So you can hear about a number of acquisitions that are being made in the global space as far as software is a concern and some of these softwares are very relevant and useful to us in our digitization journey for this organization as well. So We will have access to those technologies going forward as well. If you can't fall light on which of this like now you have It's been sold out on EcoStruxure, which is I think it's one of the flagship projects of software or how do they type it and We could understand it pretty much better for us.
So yes, EcoStruxure as a platform has 2 parts to it. 1 is EcoStruxure on Edge, which is the Edge Control Software. So we spoke about some of the projects that we have executed in my opening presentation as well. Like the EPAS software, which is the grid, which Manages the grid. You have ADMS Software, which is the advanced distribution management systems.
In addition to that, we have now acquired another company, which is ETAP, which is more into design as well as electrical networks management, so that is another software that is applicable. So I think we have a complete suite of software like PowerScada and things like that. We have, And on top of that, we have diagnostic platforms of EcoStruxure, which is like the Asset Advisor, the Power Advisor, Building Advisor and products like that, which provide not only which are hosted on the cloud and provide Analytics to customers to be able to take preventive action rather than corrective action. So I think we are bringing This entire suite of products to our customers, saturating them with our offerings and also providing them with lifecycle maintenance for these products as well. And so how do you see the is this safe haven, the infrastructure will be the backbone for in terms of main So for all which you built the entire system around or how does it work, basically?
I couldn't get your question. You mentioned Is it safe to assume that EcoFlex is a base platform for you? Or it's just one of the plugs in play? Or it's like What is the base platform for you to be in terms of senior software structure? Structure is the overarching theme of our software journey.
So it encompasses, It's built on certain principles like interoperability, open architectures, The capability to put together disparate systems and integrate with that, not locking in the customer with a particular platform and not He not being able to access and integrate any other platform to this and things like that. So it's a very open architecture. It Gives flexibility to the customers. It's modular in nature. So EcoStruxure is the overarching theme of the software, and it's like a backbone.
And you have different modules that are available, which serve a particular purpose. And on top of that, you have analytics. EcoStruxure platform also enables analytics, which take data to the cloud, able to, for the customers to build a command and control center, control a large number of buildings or a large number of grids from a Centralized location. So these are some of the aspects. So it's got a wide suite of products within the same platform.
So is it fair for my assumption that it will be the base for everything in terms of open architecture then you can just have to The customer just has to take a product from there and he can plug into his other software as well, right, maybe, please? It's not one single platform that can be used by any customer, okay? Don't, I don't want you to misunderstand on It is an overarching theme. It's a, what, it's a, what do you call, it's an operating system, But the modules are independent and perform certain functions. So it's not that you take just EcoStruxure and you will be able to do everything under the sun.
Okay. And sir, you mentioned in your opening remarks that government is committed to the renewable energy product Again, according to Bharat Ekon, how do you see in terms of order of inquiries going ahead from here? We are very well engaged with all the DISCOMs you see on their digitization journey. We are very actively working with all the DISCOMs in the country to help them navigate this journey towards cutting losses and digitizing their networks and reducing the harmonics and things like Okay, sir. So thanks for the answers and thank you very much for your time.
Thank you. Thank you.
Thank you very much. The next question is from the line of Viraj from Jupiter Finance. Please go ahead.
Yes. Sorry, I have disconnected. Yes. Yes, sir. Now I have two questions.
One is this, coming back to your competitors, they are meeting India as a way, Especially ABB, ADB Power, that's what they've been openly saying is that the parent is committed to India because of Supply chain issue, China pandemic. So does neither parent has any sort of plan for this company? That's one. And Can we verify? Can we benefit us by any chance?
Because more connected network would be you can give some I didn't get the second question. I understood your first question. I didn't understand your second question. I think, turning to India, would it benefit I think I'll answer your second question first. I think 5 gs coming to India will benefit everybody, right?
It It will increase the speed of your networks. It will make things much more simpler in terms of data usage and storage on the cloud and like that. So it's going to be a huge enabler for digitalization. But it's not something that will benefit only one organization. It's going to benefit All the organizations that are committed to the journey of digitalization.
And on your first question, you were asking about the commitments of Schneider Electric as a group in India, right? So already I would say that Schneider Electric We We are building in India. All this from me are planning to the parent is looking to make this from Indian companies the base of the world I would just like to I wouldn't want to Going into too many details on this particular front because today, we are speaking on behalf of Schneider Electric Infrastructure Limited. But I would say that Schneider Electric in India has a group has a very huge base. You would have heard of some of the large In large ticket investments that Schneider has done in this space, including the acquisition of L and T electrical and automation products and the company at large.
So I think There has been some large ticket investments in the space that Schneider has done. Schneider has a large number of factories and a very strong Sports based out of India with a large amount of investments in R and D and global R and D being done out of India. So I think There's a lot of investments being done by Schneider as a group in India for the globe as well. So I think Schneider is extremely committed to the journey in India of localization, talent, moving talent into different roles across the globe, building R and D centers and manufacturing in India. So I think there's no question about that.
Okay. And sir, what level of localization our company would be here? It would be the import content Yes, let me speak today. In terms of our I said we are highly localized in India. We are localizing more and more, And we want to build more and more products within the country for the country.
So I think we are already highly localized in India. Our idea is we start with a platform which is available globally. We import, we sell, we look at the market readiness And then we subsequently put in a road map for localization in India, which is on a gated basis, we start localizing components and Finally, we localized the entire product. So I think that's the journey which we have been following all throughout. Can you give some number to that?
As of today, 50% to 70% Number is? I would say that we are almost in the ballpark around 80% localized in India. Okay. And sir, my last question is regarding the smart meter, which you spoke about in your this phone call. As I understand, smart meter sounds a part of B.
Balaji:] That's correct. And how do we benefit from that? So as I spoke to you in the beginning that Smart Meet has someone asked that question, how does it benefit us? See, we as an organization, we understand electro intensive markets. We are very close to utilities.
So What we what this represents to us is not just a play on the meters. The meter decisions can be taken by the customers independently or they can award us contracts on a turnkey basis for the entire digitization, including meters. But the Exciting piece is the software and the services play that come with or without the meters. We execute projects like for Nairaipul, we have executed, which is a smart city. We have executed these projects along with the software and the meters, etcetera.
So it's possible to do it with or without. The customer could take an independent on the meters, but he could come to us for the integration with the software and the maintenance contract going forward. So That revenue would come for a service certificate in this case? It would be project execution and services revenue put together. But do we set a fixed annual revenue or deals on the transaction basis right now?
More usage of Retail, the consulting method? So how is the No, no. It is not it need not be structured based on the usage of meter. I think that would be a very complex transaction. And what we would be doing is we would be providing service contracts to the customer as far as maintaining the software and the customization of the software And adaptation to his use is concerned.
In terms of like annual revenue for everything, right, something like that? Yes. It's like an annual maintenance contract, yes. And sir, any play for the cybersecurity product? Yes.
So cybersecurity, as you see, it's a big threat across the world. The world spends almost $1,000,000,000,000 on cybersecurity issues Globally. So I think it's a real problem. And with digitization, you have to live with the problem of circumventing Cyber Attack. So cybersecurity is something that we pay very large attention to.
We also consult with our customers and provide them the necessary inputs that are required to make their networks and their software cyber secured. We Also spent quite a lot of money on R and D to make sure all our platforms are highly cyber secure. But do we have a product in cybersecurity? Or should we No, it's not a product that we have in cybersecurity. Cybersecurity is Engraved into our products, I would say.
And we provide the customers with the know how on cybersecurity. Okay. Thank you, sir. All the best. That's it for me, sir.
Thank you.
Thank you very much. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Harshal Saparia for closing comments.
Thanks, Bilal. We would like to thank the management of Schneider Electric My Mr. Sundesh Zakarin, Mayank Kolani and Manik Jain for giving us an opportunity to pursue this call. Any closing remarks, sir, that you will join the DSO Investors and Earnings. So I'm very delighted to be on this call along with all of you and the interest levels that you have shown in the various aspects that we spoke about.
I think the short term issues of COVID and all that, I think are issues that we can surmount and We can work towards it, the long term fundamentals of the country as well as the company remains solid, so look towards continuously engaging with all of you going forward in the next quarters as well. Thank you. Good evening and good night. Thank you.
Thank you very much. I'll turn on behalf of Alara Securities Private Limited. That concludes this conference call. Thank you for joining us and you may now