Ladies and gentlemen, good day and welcome to Schneider Electric Infrastructure Limited Q3 FY25 Earnings Conference Call, hosted by Elara Securities India Pvt. Ltd. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshit Kapadia from Elara Securities. Thank you, and over to you, sir.
Hi, good evening. Thank you, Manir. Good evening, everyone. On behalf of Elara Securities, we welcome you all for the Q3 FY25 and nine-month FY25 conference call of Schneider Electric Infrastructure Limited. I take this opportunity to welcome the management of Schneider Electric Infrastructure, represented by Mr. Udai Singh, Managing Director and CEO, Ms. Suparna Bhattacharyya, Chief Financial Officer, and Mr. Mohit Agarwal, Head of Investor Relations. We will begin the call with a brief overview by management, followed by Q&A session. I'll now hand the call to Mr. Singh for his opening remarks. Over to you, sir.
Thank you, Harshit, and good evening, everybody. Thank you so much for joining in this afternoon. I would like to, I'm sure you have been able to go through whatever we uploaded, the results of the quarter which went by. I would like to take you through that, just to summarize as to how the quarter has been. Just to reiterate, which I have been doing for a few quarters till the time I have been occupying this chair, as to what your company is, we have a vision and a mission which is very clear in our minds.
A vision of leading the new industrialized energy world by offering our customers and partners the most innovative connected products and solutions which are ready for the then-emerging power distribution and related expectations. Now, we also have a vision of having a balanced business model which delivers superior quality and efficient supply chain, which keeps the growth and profitability resilient and sustainable. And the mission, of course, is to be a distant partner for sustainability and efficiency. And we believe life is on everywhere for everyone and at every moment.
At this point in time, I would like to take you to the slide number where we have been talking about the market outlook. We just went through the budget, which was delivered and stated by the Honorable Finance Minister. If you look at this, there are a lot of positives as I would read it. If you go deeper between the lines as to what's there for your company, when I talk about numbers, we talk about a commitment of INR 11.2 lakh crores in capital expenditure.
We expect that the GDP growth will stay somewhat what it was, about 6.3%-6.8%, and the good news is that we also are trying to curtail our fiscal deficit to roughly about 4.4%, and the budget, if I may rate it overall, is actually fueled by reforms with a very guiding spirit of how do we be more inclusive and drive towards being a bigger part of intents to come. Now, what we have also done, if you would see, we have actually tried to break them up into five basic fundamental blocks, and these are relevant to your company, and if you see power and grid, and I will not take much time because you may be aware about this.
If you speak about power and grid, there is the Ministry of Power actually has, you know we are trying to—they're trying to put up more and more effort in impetus to solar. As of last month, we are sitting about, if I'm not wrong, about close to 98 gigawatts of solar being done. We want to take it to 300 plus as per the ambition of the nation. And the good news and differentiating news is also the thought which government has put behind the nuclear. Now, if you see, we now have a very clear-cut plan about making a nuclear nation of having about 100 gigawatts of nuclear by 2047.
And it's not only that, it's also setting up another incentive or R&D allocation for developing the modular reactors and developing the micro reactors. Now, this, as in when it comes, is a positive step taken by the government, will actually, in fact, lead to a lot of positivity around companies like us, including us, of course. The other programs which are like 600 crores being allocated for the green hydrogen under the National Hydrogen Mission and also the green corridor is something which also will fuel and it will be more conducive for actually solar development in the nation.
Now, there are certain focus areas which we have been focusing, which are pretty futuristic in nature, and that's something which India can't ignore and should not ignore, I would say, is around the energy storage systems. Now, this is going to be the future because that's what's something which will be the call of the day, as in when we have more and more renewables coming into play. When we talk about usage at microgrids, this is something which is one area which is something which we are focusing on, and we are good at it.
Coming to transport, just to tell you, we have Vande Bharat trains, we have Namo Bharat trains, we have a lot of rail network which has been put up. In fact, we added 62 trains in 2024, and we have now one in every six trains which are running. You would be proud to know that most of them or all of them are being powered and managed by the locos which we make in our company. Another good thing which actually is a positive is about UDAN. Now, if you see, we are talking about the next 10 years, and I'm sure you guys are aware, the amount of air traffic, the rate has been going up.
Go to any flight at any point in time, fly any sector, there's 100% full. So we are trying to see as to the country in which it is that in next 10 years, we need to have an infrastructure which can cater to about 4 crore passengers traveling. That's the number which we are talking, which would also mean maybe enhancing the fleet which we have a few X times and also talking about 120 new destinations which will be rolled out as years go by. And all this investment do good for us because we are good in airport, good in airport, good in driving sustainability at airport by our software and other solutions which we have around.
Now, one important thing which I would like to call out is the development of the ports. Because the new ships will be built, the old ships will be repaired, renovated, and government has this time also gone in terms of paving the duties on the raw material which are required for these works. This will perhaps propel the shipbuilding and ship rectification and regeneration activities which are required for futuristic movement and the strength which we will have in maritime area.
Now, if you talk about semiconductor data centers, I mean, it's a general knowledge that we are sitting at a cusp of data center, which would pour in greatly in India because of two reasons. One, the invention of AI, and two, the extensive usage of phones and the cost of data which actually is available to Indian consumers. Now, there are people, there are government, there are hyperscalers, there are colos who are putting up facilities at breakneck speed, and we are there to support and make these data centers run with our solutions and equipment. Now, one good thing which has happened is, if you notice, is typically in the areas of the customs duty again.
We are talking about clean tech manufacturing. We are talking about the incentive schemes being rolled out to manufacturing of mobiles. And now, first time, India is talking about infusing INR 500 crores into AI vision, which means it all drives towards inclusive growth. And that is the area where we can make an impact. Now, if you speak about infrastructure, good. I'm sure you would have noticed there is one Urban Challenge Fund which has been announced by government. I'm talking in this budget. This talks about INR 1 lakh crore being put in trying to make cities as growth hubs. Now, what does it mean?
This means that we will actually make cities as a growth hub for India and exports. We need cities which are better equipped for infrastructure, be it electricity, be it urban development in terms of the sanitation or the water resources, and the point which I was trying to make is when these amounts of money are being pushed in and pumped in by government, these means a lot because we can really do great things. We have done jobs in the water distribution where we are managing large-scale projects which are towards water penetration, whether you call it desalination or any other treatment like that, and last but not the least is the auto and the e-mobility sector.
The way government has been treating, the way rightfully government has been driving about penetration of e-mobility where we expect to have 30% by year 2030 and penetration which goes down by 45% from the base year is something which we have been working on. Now, this means two things. This means that EV manufacturing will pick up pace. And more importantly, the cell manufacturing and battery manufacturing will also be looked into very deeply and not belittling the recyclers in the battery space, which also will get flourished.
Now, the incentive, which you may clearly have read and understood, is on the customs duty, which has been either waived or reduced drastically. Actually all triggers this growth. And we at Schneider are fully geared up in terms of helping our customers who are in areas of either cell manufacturing or EV setup or charging infrastructure. We are one of those people who can effectively deliver solutions which make a lot of sense and a lot of appreciation by the customers who are going to use it.
I go to the next slide, which happens to be slide number six, where I probably would like to share a few of our wins and what we have done like we used to do before. It's trying to see as to how we have been contributing in India's net zero ambition, and I'm sure you are aware this is a discussion which we must have had in the past. We are one of the most sustainable companies around the world. What it means? It means that we are driving those technologies which are making environment better by reducing the potent gases which are around.
One of the gases which is very clearly, I would not use the term misuse, but is used is SF6. We have made equipment where we have actually removed this gas and we have actually replaced it with pure air. This is a very futuristic technology which we have been talking about in India with the policymakers, the users, and other affected stakeholders. We are happy to share that we actually are now selling these pilots at one of the progressive Discoms which we have in India at two locations. So this is something which we have done. The world is changing, and we are helping it to change.
The other is, if you see in the solar space, is a special inverter EV transformers where we are helping one of our key accounts, or rather a solar farm developer in his 150-MWt plant which he's trying to make in India. The third is, I don't want to name it, but the first green steel manufacturer, I'm sure you know about it, we are helping him to make green steel by giving a green transformer to them. When I say green transformer, it is a transformer which is actually equipped with all digital sensors and making predictive and preventive maintenance easy, in a way, making the transformer more efficient.
So two things, two firsts in this. The first on the slide is the SF6-free secondary distribution. The second is the third one where we actually are trying to help one of the steel producers in India in the field who is actually into making green steel to make his green steel in a greener way. I would like to turn it to the other point where we talk about our wins in the digital area.
Again, we have actually had three deals. The first deal is in energy and chemical space where we have provided transformers which are again equipped with two layers of sensors and a lot of analytics around it. It is also actually embedded in these solutions which we have given to one of the, I would say, government-owned enterprises.
The second is a power grid space where we actually have been electrifying one of the leading transmission utilities in East India where we have provided state-of-the-art automation systems which also comes along with an opportunity of having recurring business from this utility, and the last is where we are trying to work along with a very established carbon black manufacturer in terms of giving our primary distribution in AIS. Again, this slide is fully sensitized. If I turn page and I go to page number eight, as we are talking about, while we do digital, we do sustainable, we are not leaving behind the core. Core stays as a core.
Therefore, we actually again, three tiles for you, one on the power and grid, the other one triple M, which is nothing but metal mines and minerals and energy and chemicals again. In power and grid, we have actually made inroads at East India Discom where we have provided E-houses of state-of-the-art and also supplied equipment which are all of our equipment. If you read GIS and something which is insulated busbar GIS and RTU panels and the regular GIS and substations.
If I speak about triple M, and this is one area where we have been working with all metal manufacturers in terms of waste recovery, waste heat recovery scheme. And we have given lots and lots of AIS and transformers to one project with the repeat orders through either directly or through different contractors in India. Energy and chemicals, the last title I would like to speak about and share with you all is in this space, again, we are trying to give the power transformers and AIS in one of the largest petrochemical industries in East India. Here we have been leveraging over one full SE solutions along with customer engagement and interaction which we take pride of.
Turning to the last but not least, to page 9, is something which we are talking about the new emerging segments because which are very relevant and pertinent because they will carve out the future for us, especially data centers where we have supplied as the same engagement which we have been doing repetitive with one of the colo developers where we are electrifying one of the largest centers which they have developed in India. As well as when we talk about semiconductors, we are actually also supplying in continuation with what we did last year in the same location, power transformers with ET. We are here, I would like to have a special call out.
This is one such plant being first put in India for semiconductor where we have actually given most of the electrical distribution from Schneider, so this is one good thing which I am proud of, and so I am sure you will be. Now, I'm turning it to page 10, and page 10 actually just gives you a sense as to what's happening inside and which is leading to all this. We initiated, I'm sure you are aware about the assessment which we got done from ESG.
AI, and it's a special focus which your company has been giving on ESG, and we have installed a tool which we call as a recording tool for BRSR, and this eliminates and facilitates multiple things. One, it gives you real-time information. Second, it gives you a it removes any error which human intervention can make. Third, it uses, and the backbone is our own software which is making it happen. Fourth, and the last is that it gives a lot of advisories and it actually tells you as to how do you course correct and where are you lacking. This is one.
If I go to quadrant two, which is nothing but XROA, this is nothing but an extended reality advisor. This is a demonstration which we have actually done. It's again from the EcoStruxure platform where we have demonstrated this to one of those sites which are in Discom in East India where we actually have been engaged in the past in supplying multiple equipment and also renovating and modernizing the substation where we have demonstrated this. This is a digital solution which leverages the extended reality which leads to an increase in safety and operational efficiency of the system.
It has been deeply appreciated by this agency. Now, other two things are the new offers which I would like to take about two minutes and explain each one of them. One offer is what we call is PowerLogic P7 series of merging units. Now, this is the PowerLogic series which actually enables a lot of simplicity, and it is actually driving towards not only simplification but more efficient communication within the master and slave. Now, what it does is it eliminates running of multiple control wires between two devices, and it actually assimilates everything and just communicates on a single fiber cable. This is something which is again futuristic.
It's something which is required for industry in power and grid, in any industry for that matter, and this is supposed to be coming future in times. The last, if you notice, is something which is again a very progressive step which your company has taken. When we speak about medium voltage, I think one element which is one of the critical elements is how do we see the safety and longevity of the equipment, which is being done by measuring the partial discharge. I'm sorry, we're using some very technical terms, but this is something which is actually very critical to measure the health of the asset which you have in the substation.
Now, these are the sensitization which happens, and this helps via our EcoCare to actually make can be leveraged by customers as they move on. This is another element which I wanted to share. I go back on the next slide, which happens to be slide 11, where we are thinking of enhancing our capacity in the transformer line at Baroda, which means that we are typically trying to take this capacity from 5,500 MVA for transformers to about 7,000 and investing some money, about INR 14 crores into this. Now I come to an end, and I would request my colleague, Suparna, who's sitting beside me, to take you through the financial performance of nine months and the quarter which went by. Over to you, Suparna.
Thank you Udai. That was a brilliant explanation of what the market has in store for us and the good work that we have done for our investor community. Of course, the support which is coming from the investor community is tremendous. Thank you. And please share the financial performance for nine months and the quarter which ended on 31st December 2024. So coming to slide number 13, we have the nine-month performance. We are happy to share that we have consistent growth in orders and sales.
Orders are up by 13.8% over the corresponding period of last year. We are at INR 1,546 crores. Sales have seen a significant rise at 18.2%. We closed nine months at INR 2,050 crores. Gross margins, 26.4% rise at INR 783.3 crores. EBIT, a great rise of 34.5% at INR 277.1 crores. At the PAT level, we have increased by 26.4% at INR 213.3 crores, and we have a robust stock of INR 1,086 crores, which definitely would ensure subsequent business in the coming quarters. So highest-ever sales in a quarter, that's how we ended this quarter.
Better EBIT and PAT, better order intake and product mix, material productivity, volume leverage, better sales mix because we have a good growth in the transactional and services pieces that has given us better margins. The strategic levers that we are looking forward are to accelerate segments, leverage emerging segments, and strengthen resilient segments, as Udai already talked of. More stress on services, focus on modernization, digital services, and remote asset monitoring as we have a growing install base. So that helps us in generating more service revenue.
And to promote partners, the distributors and the panel builders with whom we work very closely. Coming to slide number 14, this depicts the order intake for the nine-month period and the quarter which ended on 31st December. So we are at 13.8% growth with respect to the order intake. For Q3 especially, the order growth is at 5.3%, which is a slight slowdown because this is a little lean quarter with respect to the orders. We closed the order intake for December at INR 442 crores. Overall, a good momentum across all segments. Order backlog, as we mentioned, it is INR 1,086 crores, which is up by 7.3%.
Going to the next slide, page number 15, talking of the sales, we already said that at the nine-month level, we have had an 18.2% increase, closing the sales at INR 2,050 crores. We have the highest-ever quarter with respect to sales. We closed the last quarter at INR 857 crores. This has been the highest and thanks for everybody for your support. Actually, that keeps us going to do more and more for you all. So again, strong sales growth in transactional and services, and this has also contributed to the better margins. Coming to slide number 16, which is the nine-month P&L, sales growth of 18.2% closed at INR 2,015 crores.
And we had our gross margin up by 28.3%. EBITDA grew by 38%, EBIT by 39.8%. Profit before exceptional items was at 48.2%. And then the PBT growth is at 61.4%. Overall, at the PAT level, we have grown by 26.4%, the obvious reason being that we had just started entering into profits during the corresponding period of last year, less taxes, but then this year was a full-fledged load of the corporate taxes on our P&L. So again, margin expansion has come due to better product mix, order pricing, volume leverage, and operational efficiency.
And at the exceptional item level, we have reversed an interest provision, which I'll talk of in the next slide. Going on to the next slide, page number 17, we have our P&L for quarter three. Again, highest-ever sales number, INR 857 crores, which is a 15.2% increase over last year. Gross margin, 25.7% increase. EBITDA 31.6, EBIT at 32.3. And talking of the exceptional items, we actually have an income of INR 17.64 crores for the current quarter, which is basically the reversal of interest provision relating to past direct tax litigations upon application made under the Vivad se Vishwas scheme.
And this has been favorably accepted by the tax authorities, and we have agreed to pay the taxes with a 10% increase as a part of the scheme. And while we saved significantly on the interest which we had accrued in quarter four of last financial year. So that's all from our side. And thanks again for your overwhelming support over the last one and a half years that me and Mr. Uday Singh have taken over the reins of the organization. We look forward to your questions.
Thank you, very much ma'am. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to take questions from all participants in the conference, please restrict yourself to two questions per participant.
Should you have a follow-up question, we request you to rejoin the queue. Please be patient. We'll wait for a moment while the question queue assembles. A reminder to all participants, you may press star and one to ask a question. We have a first question from the line of Sanjaya Satapathy from Ampersand. Sanjay, please go ahead.
Yeah. Congratulations on a great setup number. So just two questions. One is that you mentioned your order inflow was a little slow in quarter three. How is your deal pipeline and future outlook in terms of order going forward?
Sanjay ji, this was more of a time effect, I would say, because we are in a business where there are multiple project orders given by multiple stakeholders. And we intentionally try to pull up some orders so that we can make the year more robust. If you ask me, generally speaking, the pipeline is good, is healthy, and we don't see any roadblock in the pipeline as we see today.
Thank you. And the last question is that your other expenses continue to rise fairly strongly, like almost 30%-40% rise again in this quarter. And can we get a sense of how things will go moving forward, and will there be the benefit of operating leverage will finally kind of kick in to the company?
So other expenses, yes, rightfully said that it has grown in the 35%-40% bracket. Some of the expenses are particularly related to sales with respect to the provisions, etc., the accounting entries that we make. So out of this 38%, almost 18% goes into such directly chargeable provisions and expenses that we incur. Apart from that, yes, there has been a rise in expenses, but this is mainly with respect to the expenses which we have incurred internally to strengthen the organization in team building, capability building, having, I mean, expert people to work in the organization.
That's how we are kind of building internal capabilities in the organization, which was somewhere till the time the company stabilized. We were not building such expenses, but now we are building our company for the future and increasing these expenses. In the near future, you'll see that we'll be able to, I mean, optimize on these expenses with respect to our operations.
That's wonderful. If I can just ask the last thing, there was some expansion which is going on in your Kolkata factory. What really is the status there?
It is on track. We are trying to make interrupters there and going to be one of the Kolkata factory of Schneider Group. So this is on track the way it was planned. It is happening, and it is expected to go live very soon as per the plan.
Understood. Thank you.
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Ruchita from iWealth. Please go ahead.
Hello, sir. Very good evening. So majorly my question was on the order book, which was already answered. Second was, sir, on the nuclear part of it. In the nuclear part, what can be our opportunity size out of this plan of 100 gigawatts? And what products can we supply here?
So Ruchita, important question and a very nice one. Government has actually, if you must have seen the budget, they are talking about developing indigenous expertise in developing smaller reactors. So you have typically, if you see, we have the nuclear power plants which have capacities of 700 or 800 MW energy. Now, we are thinking about making something which is being called small modular reactors or SMRs, which go up to 300. And then micro reactors, which are of a smaller scale, maybe typically around 10 MW.
This 100 gigawatts is a capacity which is slated to be in year 2047. Now, what is important is the dependency on our own Indian manufacturers to make this. What it also brings in is the ease at which it can be put, the pace at which it can be put. The third, if you would have noticed, government is also trying to think about how to tweak the liability part because that was a major deterrent for enabling private participation in development of nuclear plants in the past.
Now, the second question which you had asked as to what we can supply there, the entire because finally, it's a power plant, whether it's a coal-fired or a gas-based or a nuclear is one and the same. What we can do is supply the same set of equipment, same set of software, although that would mean that this happens to be slightly more critical. The criticality typically depends on how closer are you as to the reactor core.
I mean, I'm afraid that I'll go more technical, but what it means is as closer you go to the core, your equipment becomes more. It has to be more stringent, it has to be more critical, and it has to be more robust. But the long and short, Ruchita, is that it offers a potential and upside for the company to get engaged with those people who actually will start developing nuclear power plants for India for his own self-reliance.
And sir, earlier, I was just going through a few use cases. Isn't the small modular reactors more expensive than an alternative power source?
See, nuclear is by virtue of being nuclear a noteworthy expense. So it depends on actually how much do you produce, how efficiently do you produce, where do you produce, and at what pace do you put up your power plant. Because in the past, and that's what I mentioned to you, in the past, normally we have seen because of so many regulatory approvals and the nature and the size of the plant itself, it typically used to have an overstretch in terms of the timelines in which the power plants were getting made.
For example, today, we are sitting at a capacity of about 8.1 gigawatts. So just look at the roadmap, the strong roadmap which is ahead of us; it's 10 times by 2027. So we're talking about building up 10 times in 25 years. And when the scale picks up and when the technology would be ours, I think we'll be in a position to make more efficient reactors. I'm sure about that.
Okay. So we'll have an opportunity in the small modular as well as the larger nuclear power plants. Is my understanding right?
You're right, Ruchita.
Okay. Understood. Understood. That's it from my side. Thank you.
Thank you. We have our next question from the line of Aditya Devara from Devisha Alternative Investments. Please go ahead.
Good evening, Uday sir, Suparna ma'am. Sir, our order backlog growth is just 7% for this quarter on a year-on-year basis. So are we expecting some slowdown in growth that we are looking maybe for this quarter or for the next few quarters?
So Aditya, thank you for keeping an eye on the backlog. Yes, this quarter was a little slow based on the industry situation in terms of orders. But based on the pipeline that we have, we are hoping that the next order will pick up. The next quarter, the orders will pick up, and we shall have a good backlog by the year-end, by the quarter four-end. It is worthwhile to note that we pulled in a lot of sales from the orders that we had until Q2. So with the heavy sales, the backlog has certainly reduced, but then the focus to increase our orders in the next quarter will be surely visible to all of you.
Now, ma'am, on a trailing 12-month basis, now we are generating around 3,73, 60, 370 crores kind of an EBITDA. In all probability, this number would be higher next year and the years ahead. Now, how do you wish to allocate this capital or this cash flows that you generate over the next few years? Would your priority be CapEx? Would it be working capital? Would it be debt repayment to sister entities? What would be the priority of the management going ahead? Okay.
So until now, I mean, the focus was always to stabilize the organization. As you know, three years prior to the current period, we were into losses, and the company was stabilizing. Now, with the last three years, we have stabilized, and the funds which we are generating, we are doing better, much better in terms of cash. And it is definitely funding our working capital. But as you've just seen that we have announced an investment, and we are looking for major expansion and investments in the years to come. And we will use our cash to fund both the working capital as well as the growth strategies.
Perfect. Sir, just one last clarification. Did you mention any date of commencement for the Kolkata plant? Very soon, in the next few months. Perfect. Thank you. Thank you.
Thank you. We have our next question from the line of Vinod from PhillipCapital. Please go ahead.
Yeah. Hi. Thank you for the opportunity. In your opening commentary, you mentioned that this quarter had a better sales mix, better productivity. I think there was also stress on services and better leverage. So are we seeing the best in terms of our performance? Or you mean, are we peaking out on margins at this stage?
See, whenever we are doing business, we always look for things better in terms of sales, growth, margin growth, optimization of the fixed expenses. So that way, I mean, this question, I would probably say that we are definitely hoping for a better future with respect to our growth. Specifically, talk of saying every business is always looking for growth.
No, no. I understand that, but I think you checked all the right boxes in this quarter. So, everything right has fallen in place. From that perspective, I was just asking.
No, we are looking for better times ahead, for sure.
Sure. Sure. The second thing is, I just wanted to understand this. Probably you've been asked this many times. What is our offering, and how is it different from the acquisition you did for L&T's business or the group did for L&T's business five years back? Is there anything complementing the offering, or is there some overlap in the products?
See, the application-wise, Mr. Vinod, they are practically the same because then so are the rest. It's only, I would say, that it is not an overlapping market. There are certain segments where we have been greatly working, and there are segments where the other team has been working, and it is complementary. There are certain pluses, certain minuses in both the platforms, which customer appreciates and puts to its right use and the way they want it to be done. So if I may have answered your query, it goes like that.
Sir, do you also jointly bid for projects, and then each of you appropriate your portion of the product or business? That also happens?
No.
Thank you so much. Thank you for the reply.
Thank you. A reminder to all participants, you may press star and one to ask a question. I repeat, you may press star and one to ask a question. The next question is from the line of Viraj Methani from Jupiter Financials. Please go ahead.
Yeah. Good evening, and my congratulations to the Schneider team. So outstanding performance and getting company on the solid profit path. Am I audible? [crosstalk] Yes, sir.
Yes, you are audible.
Okay. Okay. My first question is regarding how are we affected by this rupee-dollar movement? That can be negative. So are we importing any of the imports in the raw material side or anywhere else? Is it impacting us?
So we have just a hedging policy as per the guidelines within the organization and not really impacted much over the foreseeable future because we do have a very robust treasury team which helps us cover such currency fluctuations.
Okay. And my second question is this 2030 coming nearby, which is a Paris Accord where every country has signed this green climate agreement. Do we see this next two, three years' traction happening? Are you seeing any signs of improvement in the market and the renewable side or maybe on the greener side?
Yeah, certainly yes. Because now if you actually go back and try to see as to how the situation was in India about four years ago, I think there's a lot of sensitivity which has come in buyers, users, consumers about how to become more greener, more efficient in their own areas of operation, and this is a very positive move, I would say, because now the sensitivity around the same has increased, which is sort of helping companies like us to partner them in terms of whatever solutions we have so that we can actually make the operations more efficient in times to come.
Okay. My next question is into this. There's an article about a grid automation in the world. The grids are getting older, and they are working on probably thermal or carbon-consuming technologies, and now the automation has also come in. So how are we benefited in the grid since we are in a medium voltage? So are there any benefit in that where we fit in?
Yeah, we are getting benefited because I think if I like to clarify your question, there are two things which you said. One is we believe that electricity is the most promising green vector in energy space. So one, we are and this is one of the mantras which the company has as to how do we electrify processes more and more, which means that the processes which are being run in the plants which were put in India a few decades ago and were on the fossil fuel, how do we electrify? That's number one. Number two is, of course, which you touched upon rightly, India actually happens to be possessing one of the most robust grids around the globe.
Where it actually needs some more, I would say, upliftment is when we have more and more renewables coming in. As we speak, we have about, as I was mentioning, about 100 gigawatts of renewable already inside. We are talking about the green energy corridors where about 40 gigawatts is actually being leveraged and channeled through that green corridor. So we are talking about the grid which actually has these qualifiers which are required. Number one, it has to be strong, resilient, transparent, and it has to be a rebounding one where you can make an effective load distribution.
And that is where we play a role because we not only can modernize equipment which are, as you mentioned, medium voltage. We also have a software stack which actually can be superimposed on the grid to make it more reliable, to make it more predictable, to make it more resilient, and that is something which India is just again, I would say, all this comes, the nodal agencies are talking about it. They have all felt it. It is coming in pieces, but that's the future which lies in the grids in India. So your question was absolutely apt, and we are one of the, I would say, apt companies who actually can address this growing demand of Indian discoms and Indian grids.
Thank you. We have our next question from the line of Manish Goyal from Thinqwise Wealth Managers. Please go ahead.
Yeah. Thank you so much, and very hearty congratulations on very strong numbers and historical high margins, sir. Just a question on the digital solutions offering, what we have that in recent past, we have been seeing a lot of wins over there. So just want to get your perspective on industry scenario. Is it very competitive to kind of pitch for such solutions, and the competition intensity is equally high over there?
And what is the kind of adoption we are seeing from the customers in terms of acceptability of digital products and maybe the EcoStruxure architecture what we offer? And then related question is in terms of if you can give us some perspective as to how is the revenue share increasing from such offerings, and is it really helping us in improving our margins, gross margins, and the EBITDA margin? And where does it reflect? Does it reflect in transactional products, or it reflects even in the services business? Thank you.
Yeah. I'll go and try to answer one by one. First is India is an evolving and complex landscape when we speak about market. If I cannot make a general statement about it being competitive, but what happens is what I can say for sure is that there is a growing demand for these digitalized offerings because people have realized the consumers, the users, the sites, the projects. They have realized the merit of adopting it. That is the answer to your first question. Now, the second question is where do we apply this?
Now, this gets applied primarily, not greatly in transactional because transactional happens to be the one which is for more markets, not a very specific one. It is towards items which are more engineered, more customized. The acceptance and penetration of these solutions is far higher there. The third question yours was, I think, how do we see this happening, which I answered partly in my first reply which I made in the first part. In times to come, I think this would be the future because we have a dearth of India is a very typical country, so to say, because we are the way at which we are expanding.
There will be a growing dearth of skilled people who would actually maintain, and the dependency on AIs and machine learning-based large quantum computing, etc., will go up. It is a more efficient way of doing things also. So all this disclosure actually is finally aiming towards that because just to give you a perspective, whatever we do is actually taken to the cloud, and then if you are a consumer, you've been given advisory support, which actually typically means that how your asset has been behaving and what health life has it attained.
And this is nothing but lakes and lakes of machine data getting compared with the actual performance of the equipment which you have at your site. So this is ML adoption, I would say, which is gaining acceptance and popularity in Indian consumers and users.
So here the revenue would be over a lifecycle in terms of probably earlier we did mention somewhere that some of the revenue potential is on subscription based on a recurring basis. So is it already started reflecting?
Yeah, it has. It has.
Okay. Right. My question is, again, if you can please give us data points in terms of ordered inflow for the intergroup? What is the revenue share for the intergroup, and the breakup of the inflows between various segments? Revenue breakup, if it's very helpful. Thank you. Yes, sir.
Sure. Thank you. We have a follow-up question from the line of Vinod from PhillipCapital. Please go ahead.
Yeah, yeah. Thanks for the follow-up opportunity. Sir, you're expanding your transformer capacity from 5,500 MVA to 7,000 MVA at a cost of just INR 14 crores. If you look at some of the competitors who are increasing capacity, the per MVA cost is very different. So how do we look at the capital cost for a transformer on a per MVA basis? Is there any basis to look at this capital cost?
Sir, I don't know the benchmark which you're comparing with. I can speak about your company's establishment which exists today and where we want to take it. So because at multiple places, it may not be right to compare and try to arrive at a project cost per MVA and the investment required for this because it may be a green field versus a brownfield expansion and certain facilities not being there or being there makes it happen.
Because what we are trying to do here is trying to see as to how do we scale up our existing infrastructure by infusing some facilities and expanding there. So I think perhaps what we are trying to do is trying to read some announcements which have been made regarding people getting into a transformer business and investing.
Correct. So is there any way to look at this capacity? I just want to understand the business move.
Yeah. So as I said, it is actually ramping up by about 1,500 MVA. And that will require the existing setup to get more investment and enlarged.
Okay. And so since everyone in the industry is ramping up capacity, is the supply chain also ramping up its capacity, or do you see some kind of a constraint on the supply side till the supply chain catches up with the capacity that you guys are doing?
The suppliers also are for like us and like everyone, and the entire ecosystem is gearing up for the new demand which India offers now. So a few things here and there. Typically, everybody, I would say, generally gives statement that suppliers and other partners are also trying to see as to how do they catch up with the growing need. So net-net everyone is supposed to be gearing up to it.
Okay. But what about electrical steel and other critical components? I think people are talking of a shortage on CRGO and CRGO steel particularly.
You see, there is. I think you have picked up one thing which is maybe perhaps I would say which exists today. And where if you have a proper planning done and you have a regular identified supplier which actually is allowed by regulation, then it's all right. But yeah, we are now, as you may be knowing, that there are people who are trying to make steel by themselves in India, and we will be slowly also looking towards them as they start making the steel, the quality of the steel which they wish we want.
So CRGO, at times in the past, in few quarters, past quarters have been challenged to a few of us, and we are going to eliminate it along with government. I think there are multiple government agencies, including MHI, who actually is trying to see as to how do we eliminate and come out of this situation, which we few of us were in last and last quarter before last.
Sure. Thank you, sir. Thank you so much for that answer.
We'll take that as the last question for today, and I now hand the contents over to the management for closing comments. Over to you, sir. Are there any closing comments from your side?
No. I would like to thank everybody for joining this call and being a great support all this quarter. And let me assure on behalf of management that all teams are focused towards delivering, as I mentioned, the vision and the mission which I shared at the beginning of the presentation. We are working and trying to make Schneider Electric Infrastructure do things which are the first in the nature, which is more focused towards customer needs and requirements, and we abide by all ethics and by we do business. All the best, and thank you so much.
Thank you so much, sir. On behalf of Elara Securities India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.