Hi sir, thank you so much for the opportunity. Sir, order inflow has been robust for us for the first half and the last quarter also. So, the execution for last 2 quarters has been slow. We have grown in single digit now. So, before that 2 quarters, we were growing 20% plus for many, many quarters, but there is a sudden slackness in the execution for the last 2 quarters. So, possibly going forward, how do you see the ignition improving from here on?

Thank you, Mr. Mahesh. I think very apt observation. The business where we are in is essentially a project business, and therefore, it is cyclical in nature. And roughly, if you ask me these percentages, number wise, they look single-digit, but we are hopeful that in times to come, and this will pick up and it will pick up and move into double digit, because like for example, the last quarter is always in India is a heavy quarter, because lot of CAPEX and depreciation has to happen. And then there is this slackness at times , because either it has got multiple variables, which actually come into play like the readiness of size, the project cycles, the cash availability by the intermediaries and the end user. So, all put together, it is like this. But otherwise, the observation is right as we are about single digit, but hopefully, this will pick up because we have good backlog, which will churn out as you see because the orders are high.

Sir, execution is slow because of the problem from client side? Or is it that the original schedule itself is slow?

No, we do multiple projects. These are not large value few elephant orders which are making it happen like this. So, it's a combination of various factors, Mahesh.

Okay. Sure. And sir, last question from my end. Various expansion plans, would you like to update us in terms of the Kolkata facility that was expected to come up and the new CAPEX that we have announced for transformer expansion?

Thank you for asking this. Happy to share that all those various programs of expansion actually have been moving on track. So, w e will keep on letting you updated as we move on and something tangible is on the ground, because these are large decision projects, which take but the work has initiated on each one of them, which you approved and is working in the right direction.

Sure. Thank you so much, sir.

Thank you. The next question is from the line of Sanjay Satapathy from Ampersand Capital. Please go ahead.

Mr. Sanjay, this is Omkar, if I take your questions, nothing is like that. No CAPEX item is getting expensed off. These are the expenses are in regular in nature, and there is nothing unusual item you will find in other expense. It's only what you look at in 1 year Quarter 2 versus holistic picture, you will see completely in sync with the previous year.

Okay. And while the company is booking new orders and aspiring for new factories, et cetera , what are the long-term plan in terms of improving profitability? Is there some kind of program which is going on in terms of cost reduction and also being much more consistent in terms of execution of orders?

You see this is a constant exercise which we undertake within the company where we try to manage the mix. We constantly try to optimize the net cost and also the other costs, which are part of distribution as well as serving the market. So, that's a constant thing which we try to keep on evolving ourselves and we keep on working in multiple levers, which keeps us profitable go on north side.

Okay. Okay. But then a benchmarking with where you benchmark yourself against the peers and see some significant scope of cost reduction? Or do you think that you are operating at optimal level?

We are at right level, and I think you are more knowledgeable than us to see the margin which we make in terms of percentages for the businesses like this. We are trying to work on that number as well. We see about close to 40% is what we do.

Thank you, sir.

Thank you. The next question is from the line of Sagar Gandhi from Invesco Mutual Funds. Please go ahead.

Good morning, sir. My question is on the data center opportunity that you alluded to. So, while you see a great opportunity for yourself, we understand that at the global level of Schneider Electric, the parent company is in place to capitalize on this opportunity, from an India perspective and from Indian listed and unlisted facilities perspective, how is this opportunity divided between the 2? And what value capture will come to the listed entity and how large it can become from you from here on? So, you can also highlight what percentage of the top line can come from this mega opportunity in times to come? So, that is my first question.

Okay. So, answer to your first question, Mr. Sagar, Schneider has got a vast basket of solutions, which are internetted with each other. And as you have rightly pointed out, few of them is done and delivered from this company, and there are a few of them which are not part of this company. But when we present to a data center developer, whether it's a colo or a hyperscaler, we present the entire basket and really establish the overall merit of the chain, which actually is coming for benefit. And therefore, we see the potential, which is both, for this company as well for the company, which is part of Schneider, not here, coming up together. The solutions can be either power distribution, the solution can be very broadly on the HVAC side or the cooling side or the power resiliency side. So, everything all put together is something which we do. So, as and when people start investing, and you are also right that we have good global connects, and a lot of global players are going to come and start working here. So, we see a good size for us as times to come, provided these guys come as planned.

So, sir, how large this opportunity can be for us in our top line, can it be materially 15%, 20% of our top line over the next, say, 2 to 3 years?

Hard to say, sir, because we have been listening and now after something what happened in some of the neighboring countries , there was a lull in the data center space for the last 7, 8 months, I would say. And I think people are revisiting their plants and they are coming back. Now depending on the pace at which they come, will really decide as to what percentage of top line will be continued by data center people for us in 3 years down the line. But yes, it will be something which is promising, as I would say.

Okay. Thank you. Sir, my subsequent question is on the DISCOM reforms that you've been seeing from quite some time. And we've been hearing that the newer package is likely to be even bigger than the RDSS scheme. So, sir, can you highlight the equipment opportunity that will come to industry as a general? And how can that open up a new phase of growth for you?

See, there are 2, 3 things I would like to say to a level to which I can say. There are certain offers which are quite futuristic, which Indian DISCOMs need, which are different equipment and different software and different site work, which we are trying to work upon, and being prepared not only ourselves, but also trying to drive that preparedness and the thoughts around the DISCOM and the other end users. Now I am not aware about anything, which is RDSS 2. It's still getting done. But my sense is this INR 3 lakh crore as we speak, we have already done, and this has been a little bit here for the scheme. Government has already shelled out about INR 2.7 lakh crores out of INR 3 lakh crores. So, that's been moving in the right direction, and it did offer us good opportunities for doing business. Our business was well in these DISCOMs. Now if you ask me, the statement which I can make for future would be, besides these equipment, there will be a lot of software, which actually will make the grid more stable. I think as India is standing at a level where grid modernization, grid upgrade would be critical and important, and more so because you have more and more inclusion of solar coming in the overall play, which will entail a bidirectional or multidirectional flow of power and energy, wherein grid modernization and strengthening will be important. And that is one area which your company can do. So, this has not been done in the last 4, 5 years, so much so as what it should have been. But now India sees a very clear need for this going forward, which I'm talking about, next 2 to 4 years' time.

Yes. Actually, sir, my question is if INR 2.7 lakh crores have been spent, and if we look at the top line of our company, it is only INR 2,600 crores. So, will the incremental spends on DISCOMs? And as you highlighted, most spends will be value -added spend, software, equipment spends, your capture of opportunity or the market that you can address in the upcoming spend will be larger than what it was in the previous few years?

Difficult to comment, but we are progressively bullish on that area, but I would not be in a position to tell you any numbers in terms of what other than this qualitative statements are.

Sure. And sir, my last question on the CAPEX. So, while the listed entity is doing a INR 200 crore CAPEX, we see unlisted companies doing even bigger CAPEX. What I read recently is Schneider Electric IT business is doing INR 1,500 crores CAPEX . And in total, the group is doing INR 3,200 crores of CAPEX. So, why this conservatism on CAPEX when it comes to the listed company?

I think there is no conservatism. It is only we are expanding as to what we can in the areas where we operate. Now the other companies like the one which you stated has got different offerings and different position in terms of what capacity to be added in India. So, the programs is entirely different and not interrelated at all. What this company is doing is what this company needs for becoming future-ready and insulated from anything which might go wrong.

So, it is clearly demarcated between enterprises, and there is no overlap. Is that understanding correct?

Almost, yes.

Okay. And as a group, the parent is very bullish on the India portfolio as a whole, which is why the CAPEX in all the entity?

Yes. Your assumption is right, sir.

Yes. Thank you so much, sir. That is it from my side.

Thank you. The next question is from the line of Naysar Parikh from Native Investment Managers. Please go ahead.

Hi. Thanks for taking the question. Some of them were answered. I just want to understand from an order intake perspective, this quarter was somewhere around 15% growth. So, just if you could give some flavor going forward for the rest of the year, how do you see it? What segments are you seeing more inquiries in? And will we be closer to like this quarter's 15% mark or H1's 28% mark. Where do you see H2 going towards?

So, as I had said, and if you can recall the discussions which I did early on and while I was sharing the presentation, Indian landscape is steady and is moving up. Now how much of that will get translated really depends on the financial closures of projects, the award, and then be subsequently taking those contracts with us. Now it is difficult to tell you whether, sir, it's 15% or 28%, but the point which we perhaps we are trying to drive down is that we are not really seeing India going down. So, either it's stable, and a bit moving up. So, this is what I can say at this point in time, because there are lot many projects which we undertake, and which come from various segments, which come from a variety of end uses, government and private, which come through various channels. So, hard to give you a ballpark number. But what I'm saying is it will be in line with the expectations which we have.

Mr. Naysar, do you have any further questions?

Yes, sorry. Just one more point. Our disclosures have always been less and quarter-after-quarter, like earlier, we used to give mix by product service or something revenue mix. Now we don't even give that. So, just one request, if you could look at some of the other listed players and the disclosures they are giving, and we can also just improve disclosures a bit, give some more flavor on revenue mix and margins and CAPEX and all that, it's just very helpful. We don't really give any disclosure except for orders, that's it. So, please do look and do it. Thank you.

Sure sir. We have made a note of this.

Thank you. The next question is from the line of Aditya Deorah from Divisha Investments. Please go ahead.

Good morning, Udai, sir. Sir, my query continues with the queries of the previous participants. This is related to the very tepid revenue growth which we had for the first half of this financial year. Sir, again, in the last few quarters, we had put in the press announcement that we were supposed to undergo capacity expansions where we had mentioned that our capacity is around 90%, 95%. So, is it more because of the capacity side of things that we are unable to supply the order that is there in the market that we have already received? Or is there something else related to the tepid revenue growth?

I would say it has nothing to do with the installed capacity. We are good there. And 2 , as I had responded to 1 of the earlier questions, our 6% or 7% growth is a cyclical quarter growth. And this growth actually keeps on changing and it's dependent on multiple factors. But what I would like to tell you is not because of the situation where we are not able to serve the market because of capacity crunch.

Okay. Okay. Sir, one slide, which is missing, which has been very frequent in all your investor presentations and which we really look forward to with new product launches. So, there is absolutely nothing related to new product launches in this particular presentation. Anything related to that you would like to speak about?

Yes, because I did mention about because I am sure, as you said, we used to really talk about the solution and you speak about it at times in the previous investor calls. So, this time, we thought that perhaps you have seen it enough and we wanted to see the success which we have secured because of those. So, talking about what we could do is not only we developed and launched it, but we also secured orders. So, we thought we will share that because otherwise, we will only keep on talking about what great we are doing in terms of...

But we really look forward to your new product launches. It speaks about the innovativeness and also the youngness of the company.

Okay. Point noted, sir, we will take care of that.

Thank you for your time.

Thank you. The next question is from the line of Manish Goyal from ThinQwise Wealth Managers. Please go ahead.

Hello, thank you so much. Sir, couple of questions. First, probably what we see from the results is that there is a stock adjustment of INR 59 crores. So, probably is dispatches held up due to some reason and probably impacting our revenue growth?

Okay. I will take this question. Answer is, you can say, yes, we have a certain FGs, which we are holding it because of customer readiness. I did not give any clearance at the last moment and hence it is sitting in the FG, so that is expected to liquidate for sure in the Q3. You are right that certain FG was constantly being held up because of the customer clearance.

Okay. So, probably like it's almost 30, 40 days that time has passed from the last quarter. So, have they been dispatched or very high probability that this quarter, we will see the dispatches?

See, these are all futuristic, but see, we are depending on the customer clearance and customer don't take such time, don't worry. I think that the team has already worked the customer and find solutions within the same quarter.

Sure. And sir, sorry, coming back again on the capital expenditure CAPEX plan. So, just would like to know, because what I see in the balance sheet again is that the capital work -in progress number has been increasing and it now stands at INR 110 crores. So, we were expecting a vacuum interrupter plant to start in the Q uarter 1. This was a project announced 2 years back. So, sir, would like to know what is the status on that? And when do we expect it to start and start ramping up, sir.

So, as I said before, it is almost on track. There were a few instances which has happened, which has led to defer it by a quarter or two, but the new furnace, as you say, the first furnace per the schedule has already started commercially producing interrupters . And it is perhaps one of the most advanced state-of-the-art plant, which we are trying to build up in Kolkata. So, overall, it's almost on track because if you remember and you are right, the capital which was sanctioned for this plant was any which we are going up to close of '26 and early '27, which is going to happen where we are going to bring up the last unit, which we are planning to do. At interim stage, we are almost there. Just to tell you what we are trying to do is , we are trying to plan in such a way that there is no disruption in the normal operation and business. So, that is the reason why perhaps, in terms of advancement of the program, there may be slight deviation. But just to ensure that we don't miss out on any commitments which we have made to our customers and the numbers, therefore.

Okay, okay. And the other 2 CAPEX plan at Vadodara for switchgear and Kolkata for breaker, that are also expected to start next year, sir, the expansion.

Yes, sir. It is as per the schedule, because we are rolling out multiple lines at all the 3 locations which we hold, 2 in Vadodara, 1 in Kolkata, and all those programs has been initiated, and they have been moving as per the project charter.

Okay. Thank you so much, sir. And sir, would it be possible to share the revenue breakup, sir, between systems and equipment and transactional, products, services? It will help us to see how we are progressing on the more profitable transactional, Products and Services business? And also, if you can also give perspective on how exports have been doing for us, sir?

I can give you here now for H1, our system is 65% transactional is 20%, services is 15%. IG, I think it's all together, right? So, IG is 20%, which means IG includes, we call mostly exports. So, these are the mix. And when I'm talking about this mix, this is what we were talking about in the P&L. That mix of transactional and services has increased compared to the like-to -like previous H1, where last year, my system in H1 was 69%, now we are at 65%. Transactional was 19%, now we are at 20%; Services was 12%, now we are at 15%; and Export was 21%, now we are at 23%. So, this is what we have as numbers.

Okay. So, within IG, exports, sorry, I missed the number 20%?

20% of Transactional, yes.

No, no. So, System 65%, Transactional 20% and Services, 15%. Within the system, we have an export which is if you look at 100%, then it will become 23% of 65%. So, 12% is Export.

And Udai, sir, if you can also give us a perspective as to like you shared that our 4 major areas, Power Grid, Data Center, Renewables, Mobility are one of the major growth drivers. So, if you can share how is the revenue breakup and how has it been growing? It really helps to give us a better perspective on the company growth trajectory.

Yes. I can give you, because typically, in any quarter, either the orders which are secured from these segments or the revenues which we realize from these segments, they vary. But on a larger level, maybe perhaps under control of Omkar, today, as we speak, the Renewables and Mobility are good double digit; Data Center almost double digit; and Power and Grid is our main core, so we do heavy from the Power and Grid segment side.

So, historically, it's been around 50%. So, has that share reduced because others are growing like Renewables, Mobility?

It wasn't 50%. It was a shade less than 50%. But yes, because the mix keeps on changing, because we also keep on choosing as to with whom we will actually do business. Given the ambition of profitability, we also keep on choosing. It is always like that.

Okay. Thanks, sir. Thank you so much. I will come back in the queue.

Thank you. The next question is from the line of Abhijeet Singh from Systematix Share s and Stock. Please go ahead.

Thank you. The first question is on the Data Center opportunity for us. Sir, what are the products that we manufactured for Data Centers ? And what is the scope of our products in the overall CAPEX per Data Center? And what are the markets , of course, we will focus on the D omestic market, but is there scope to also ramp up E xports in this particular segment? That's my first question.

Abhijeet, sir, if I heard you right because you are very feeble. Whatever your company does, everything gets sold in Data Center. If you ask me, in very layman terms, we receive power, we have a transformer. We distribute power at the primary side, we have equipment. We distribute power in the secondary side, we have equipment. So, everything what the company does , has got a leeway into Data Centers. What we can additionally do is the relays which we manufacture and the associated programs, the software, which actually makes this operation very seamless and efficient, is also done by us. So, whatever we do under the sky in this company all has got something to do with data center. This was first answer, if this was the question.

Yes, sir. This was the question. And one more thing related was what is the scope? So, if we take all this together, our entire product portfolio, what will be the scope as a percentage of overall CAPEX of the data center?

I really did not get it. But I think what you are asking is if a data center developer is spending x units, how much is our share? Is that the question?

Yes, sir.

So, it actually depends. Again, it doesn't have a straight answer, because there are 3 basic things which actually makes up the CAPEX of Data Center. One is, of course, the land, then electricity and third is the water. Now depending on really the land because which part of the country, someone is trying to put up a data center, it really becomes a huge component of CAPEX, the data center developer has. It may be widely different. Someone is putting in Mumbai, it will be pretty expensive than somebody who is putting in our outskirts of Pune, so just one example. But otherwise, in the electrical spend, any spend, whatever is happening is we can be anywhere between 2% to 10%. It all depends on configuration and the location and whether it's an interim project, because if you're building up a brownfield expansion, then certain utilities are already in place. The scope goes down. If you're bringing up a greenfield, scope goes up. If you're making a, say, greenfield in NCR, is further up. Making a greenfield in Viz ag is lower , something like that. So, it doesn't have a straight answer, sir.

Thank you. The next question is from the line of Viraj Mithani from Jupiter Financial. Please go ahead.

Yes. Thank you for the opportunity, sir. Every quarter, other expense keeps on growing, whether we grow, we don't grow. So, my question is that when this will stop happening, at what level of the sales this will stop happening?

So, if I take your question. Other expense, it's generally there's a fixed cost where we have a fixed cost coming from the vendors and the employee linked inflations things. So, that has grown only at 10%. It's not growing. I think generally it will grow in the range of 9% to 10%. And if you look at last year, it was always lesser than the sales. So, this is what we see. In H1, you can always see that sales is 6.6%. Our other expense is 10%. This is the range what we see 9% to 10%.

My point is other companies in the same field are having operating leverage. When are we going to get this? Because whether the standards grown or grown, other expense has always grown up? So, I was just wondering.

Okay. And sir, my last question is, can you quantify this grid opportunity which government is planning to spend the money? What kind of addressable market size Schneider has?

So, it depends on what government intends to roll out the schemes at. There are so many state - run DISCOMs. There are so many privately held DISCOMs. There is a national grid. There is a state grid. Now there are a few of the grids which are a bit more progressive, who have plans to really modernize it. And there are a few which are still in the planning stage. Now this essentially means, again, it doesn't have a one solution for all. It depends on what sort of upliftment or modernization a user is looking for, how old is the grid, whether you really have those sensors and other things which will help the grid ge t digitalized or even the scope will have that as well. So, it's more of complex like, for example, there are certain states which are going in for like West Bengal or Bihar or maybe AP or maybe Himachal. So, there are states which are going up. It's something which happens along with the funding, which is done either by the state or by REC or PFC. And it does take time. So, my answer to your question is that, difficult to predict. But what we see that there is a need, as I was mentioning, there's a need that we need to modernize. Otherwise, it will be very difficult to have 125 gigawatts of solar integrated into the national grid. And also a few of the prosumers, which will be those people who are putting up rooftops in their premises, whether it's home or industry, will have an integrated grid system. So, how and when they become a producer will decide the point at which the grid needs to get modernized.

Okay. And the recent guidelines say, this grid planning is going to be every 6 months. So, is that beneficial to us, right?

Yes, it gives us clarity and way ahead for another 6 months, till the time we resemble again.

Okay. Thank you, and all the best.

Thank you.

Thank you. Ladies and gentlemen, due to time constants, this was the last question. I would now like to hand the conference over to Mr. Harshit Kapadia for closing comments.

We would like to thank the Management of Schneider Electric Infrastructure, giving us an opportunity to host this call. We also would like to thank all investors and analysts for joining for this call. Any closing remarks, Udai sir, you want to share with investors?

So, thank you, Harshit. First, thank you for proposing faith and interest in us, Number 1. Number 2 is apologies, because few of the questions perhaps in the time accorded, we were not able to answer. And please feel free to write it to us, and we can get back to you. And 3, wishing you all the best sir, for the festival season, which is ahead of us. Do stay connected and do well, stay safe. Thank you so much.

On behalf of Elara Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.