Schneider Electric Infrastructure Limited — Q3 FY26

Schneider Electric Infrastructure Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=xy8x8xkxktQ Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q3 FY26 earnings conference call of Snyder Electric 0:08 8 seconds Infrastructure Limited hosted by LR Securities India. As a reminder, all participant lines will be in the 0:16 16 seconds listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 0:24 24 seconds conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I 0:33 33 seconds would now like to hand the conference over to Mr. Harshit Kapadia from LR Securities. Thank you and over to you sir. 0:42 42 seconds Thank you uh Alri. Good morning everyone. On behalf of Fara Securities, we welcome you all for the Q3 FI26 and 0:49 49 seconds 9month FI26 conference call of Schneider Electric Infrastructure. I take this opportunity to welcome the management of Schneider Electric Infrastructure 0:58 58 seconds represented by Udai Singh, managing director, Omgar Prasad, Chief Financial Officer, Mohit Agarwal, head investor 1:05 1 minute, 5 seconds relation. We will begin the call with a brief overview by the management followed by Q&A session. I will now hand over the call to Udisa for his opening remarks. Over to you sir. 1:17 1 minute, 17 seconds Thank you Ashit. Uh and very good morning all of you. uh I would like to take your company's performance in few 1:25 1 minute, 25 seconds slides which I'm sure you got a chance to have a look the one which we shared yesterday 1:33 1 minute, 33 seconds but if and pull out the number on the slide and go on the slide two which 1:40 1 minute, 40 seconds clearly states what your company vision and mission is. I just want to reiterate for better clarity. You know, your 1:48 1 minute, 48 seconds company will lead the new digitalized energy world by offering our customers and partners alike the innovated 1:56 1 minute, 56 seconds connected products and solutions. We should be ready for the emerging power distribution elevate expectations at any 2:04 2 minutes, 4 seconds point in time in future. Now how we do this? The vision is that we do this through our balanced business models. 2:13 2 minutes, 13 seconds maintaining consistent superior quality and a very efficient supply chain which will keep the growth and profitability 2:22 2 minutes, 22 seconds resilient and sustainable. Now what at this point in time I would also like to 2:28 2 minutes, 28 seconds share about our mission. We now are your energy technology partner for all our 2:36 2 minutes, 36 seconds customers and partners. What it means is this. We electrify, we automate, we digitalize each and every industry, 2:45 2 minutes, 45 seconds business and homes aimed at driving efficiency and sustainability for all. 2:51 2 minutes, 51 seconds This is the mission which which we we would be now working at with the above vision which I had just stated. 2:59 2 minutes, 59 seconds Now I just want you and request you to go on the next slide which actually just 3:05 3 minutes, 5 seconds stipulates and showcases our awareness about the company with the 3:12 3 minutes, 12 seconds customers and the stakeholders and what is it actually leading it. I just have few pictures on this to get shared. The first picture which you see on the left 3:21 3 minutes, 21 seconds is a suicon uh picture which is a sequin event which was held in this quarter 3:28 3 minutes, 28 seconds after a gap of 10 years and this is by far a flagship event conducted by IMA 3:34 3 minutes, 34 seconds where your company represented very well and the right 400 odd people corporations 3:43 3 minutes, 43 seconds got participated in this and had an active display of what your company does and this was a grand success. What we 3:52 3 minutes, 52 seconds also do is keep on representing ourselves, our thought leadership, our supremacy in the market by participating 4:00 4 minutes in events of repeat. Like there are couple of pictures which you see is a iffki event and EU chambers event where 4:07 4 minutes, 7 seconds we got a place to really speak about as to what your company does for Indian customers and Indian stakeholders. 4:18 4 minutes, 18 seconds On the right is a picture which is by Mr. Shirram Singh. There's a small video and I encourage you to actually see on 4:27 4 minutes, 27 seconds our website. This is a 2 minutes video which actually just establishes as to what we the company has done in state of 4:34 4 minutes, 34 seconds Bihar especially in Patna in terms of really digitalizing the city by providing the most efficient systems 4:43 4 minutes, 43 seconds which the company has in terms of maximizing the uptime of the discom which runs south BR. 4:52 4 minutes, 52 seconds I would now take you on a slide which is a bit heavy slide I'm sure you would have seen is is a market outlook what 5:01 5 minutes, 1 second your company sees and the headline message which I would like to communicate here is that the government 5:08 5 minutes, 8 seconds is pushing growth despite the global or geopolitical uncertaintities or headwinds which we face. 5:17 5 minutes, 17 seconds Just to elaborate on this further, the GDP forecast for next year is supposed to be anywhere in the range of 5:26 5 minutes, 26 seconds 6.8 to 7.2 which is consistent. What is also being done by government is to 5:32 5 minutes, 32 seconds infuse more capex. We are expected to end the year revised estimate close to 11 lakh crores and the next year capex 5:42 5 minutes, 42 seconds is slated to be about 11% more at about 12.2 2 lakh crores which means that government is really trying to push 5:49 5 minutes, 49 seconds demand and this is also coming out by various initiators of policy decisions which have been taken by the government 5:57 5 minutes, 57 seconds in last few quarters like the continuous report rate cut we are now sitting at 1.25% 25% cut over 6:05 6 minutes, 5 seconds what we fear in December 24. The tax reliefs which has been given the GSC reconization which has come up is all a 6:13 6 minutes, 13 seconds booster for domestic demand. When the demand goes up the supply also has a rightful reflection and that's the 6:20 6 minutes, 20 seconds reason why we see that this is good for the company. 6:24 6 minutes, 24 seconds What we also heard our honorable finance minister say on the first of this month is infrastructure risk guarantee bond 6:32 6 minutes, 32 seconds like we are we are not fully aware about what these details of this fund would be but this typically is aimed in 6:40 6 minutes, 40 seconds mitigating the risk which a developer might see in putting up infrastructure which is again positive and we are 6:49 6 minutes, 49 seconds talking about the other investments which are in emerging segments like data centers, semiconductors and then the 6:56 6 minutes, 56 seconds renewable space where there is a robust public investment plan in 27. Just to give you a sense, we are talking about close to 20,000 in data centers, maybe 7:06 7 minutes, 6 seconds about 15 to 18,000 in semicon and maybe about an excess of upwards of two lakhs or 1.7 1.7 to two lakhs in and renewables. 7:18 7 minutes, 18 seconds PLI scheme also stays because 3/4 of PLI is on the manufacturing triple IP which 7:24 7 minutes, 24 seconds is manufacturing cycle and that is where people will put up more manufacturing setups and sites and where we can supply 7:31 7 minutes, 31 seconds our products and solutions. Now I also want to take about 3 four minutes in terms of really telling you about the 7:39 7 minutes, 39 seconds four pillars which are very pertinent to us and which would carve our future and these I would call them as N transition 7:48 7 minutes, 48 seconds which the country is witnessing. the huge growth which is anticipated in AI and digitalization, 7:57 7 minutes, 57 seconds the urbanization and therefore transportation and of course last being the manufacturing resilience of the country. Just to give you a sense as to 8:06 8 minutes, 6 seconds what we are talking about 5 years down the line we are talking about a renewable target of 500 gigas we are 8:14 8 minutes, 14 seconds talking about the EV penetration rate to go to 30%. This is what all we know despite the fact that we are still at 8ish now and more importantly we are 8:23 8 minutes, 23 seconds also talking about energy storage systems which are battery based just to make our grass more resilient and uh powerful 8:31 8 minutes, 31 seconds so is the case in data centers we today as we speak we are at roughly about 17 8:39 8 minutes, 39 seconds gaw of IT commission load which we see that in next five years down this will go up to at least four times times if 8:47 8 minutes, 47 seconds not more to about anywhere number 7 to 8 gawatt. 8:53 8 minutes, 53 seconds Now this is important because the way data centers have been coming up the way country needs it the way population is 9:02 9 minutes, 2 seconds using and leveraging the AI and digitalization which is evident from the fact that we expect the distal economy which today is 9:10 9 minutes, 10 seconds roughly about 12 to 13% will contribute to about 20% of GDP in 2020. 9:18 9 minutes, 18 seconds You heard on the transportation about what is happening. We have actually come up from 17% when we got independent 9:27 9 minutes, 27 seconds independent to about 41% urbanization which is slated to happen by 2030. And we heard the finance minister speak 9:35 9 minutes, 35 seconds about the highspeed rail corridors which are seven which are getting announced which will cover about 4,000 kilometers. 9:43 9 minutes, 43 seconds the 16,000 K investment and also an additional dedicated freight corridor which will be 2,000 kilometers 9:51 9 minutes, 51 seconds connecting the company to Surat manufacturing resilience stays as very 9:57 9 minutes, 57 seconds important because we are driving Vix Bharat 47 and we are 10:06 10 minutes, 6 seconds we are witnessing the the the merit of these schemes which are getting launched by government especially the ECMS scheme 10:15 10 minutes, 15 seconds which is where the investment has been doubled. We are talking about the dedicated rare earth corridors in two 10:23 10 minutes, 23 seconds states which will sort of bring in lot of localization 10:32 10 minutes, 32 seconds capabilities in making permanent magnets which will be required in you know EV space and aerospace and industries like 10:39 10 minutes, 39 seconds that and the law and and the and the last is the Indian semiconductor mission 10:46 10 minutes, 46 seconds 2.0 do where another thousand crores have been allocated in the budget which will actually drive the semicon mission of the country by becoming subsidiary. 10:58 10 minutes, 58 seconds Now we the company if you look at and you focus on the last line we are getting ready for leveraging all these 11:06 11 minutes, 6 seconds waves which the country will witness and I would say at this point in time that we are at a right inflection point to 11:14 11 minutes, 14 seconds actually capture the growth coming in this industry. 11:19 11 minutes, 19 seconds I am also happy and proud to share a few of the wins which we did in this quarter which went by and speaking about the 11:28 11 minutes, 28 seconds sunrise segments which is essentially data centers and semiconductors we we supplied 11:37 11 minutes, 37 seconds entire end to-end solution in one of the data centers in this Q3 where the order was taken for the entire value chain 11:45 11 minutes, 45 seconds including power of including the power transformers that disl uh AIS panels 11:52 11 minutes, 52 seconds along with the subscript subscriptive uh you know uh maintenance contract. 12:01 12 minutes, 1 second We are talking about the breakers and the transformers which we keep on supplying in the segment of solar and we 12:08 12 minutes, 8 seconds are one of the largest orders we secured for transformers in in 25 in this quarter which standby and of course the 12:17 12 minutes, 17 seconds the last is the biggest order which we won from one of the leading semiconductor manufacturers who's putting up a front end fab in state of Gujarat. 12:27 12 minutes, 27 seconds Continuing, we also witnessed major winds in the core segments where we actually have been working for quite a while and these 12:36 12 minutes, 36 seconds are what we call as electroint inensive segments typically being the metal 12:43 12 minutes, 43 seconds mining and minerals the mobility and also the power and grid which is nothing but the utilities. 12:50 12 minutes, 50 seconds We supplied here GIS panels and this is one of the steel plants where we have 12:56 12 minutes, 56 seconds supplied the high-end highdated sized GIS panels and so was one of the plant 13:03 13 minutes, 3 seconds in central India where we supplied this connected panels which are for power distribution 13:10 13 minutes, 10 seconds and of course one of one of the large orders which came in from in north which is for the ring main units which are used for secondary distribution. 13:22 13 minutes, 22 seconds And as I said, you know, we are we are we are highly disliked technologically advanced people and there's a reason we 13:31 13 minutes, 31 seconds we prescribed in the TBCB tenders and we actually got 765 KV modernization and 13:39 13 minutes, 39 seconds distribution win where we are supplying the control and relay panel and substation automation SCADAS and the 13:48 13 minutes, 48 seconds distal journey continues. news where we are supplying full SCADA system in one of the leading uh metro network in western India. 13:59 13 minutes, 59 seconds You know I would also be very happy and proud to share as to what your company has been trying to do on the CSR angle 14:06 14 minutes, 6 seconds where we actually the core and underlying principle remains as how do we build a skill around us? How do we 14:14 14 minutes, 14 seconds you know give something which is the basics and necessity you know and also how do we earn trust as a good corporate 14:22 14 minutes, 22 seconds citizen. Now if you look at under these three buckets the skill development we actually have established 10 skill 14:29 14 minutes, 29 seconds centers in government ITI and we tell these students as to what they should be doing and how they can 14:38 14 minutes, 38 seconds actually flourish and make their careers out of you know the contemporary technologies which India is witnessing. 14:44 14 minutes, 44 seconds We are talking about community electrification. We electrify what we call as community health centers. the 14:52 14 minutes, 52 seconds public health centers and few argon warries with solar energy and solarled uh power systems. 14:59 14 minutes, 59 seconds We in fact have been also trying to provide and reach out to about 2 and a half thousand underprivileged families 15:07 15 minutes, 7 seconds in remote and slum areas by providing them portable lighting and charging solutions. 15:12 15 minutes, 12 seconds And therefore we actually have been recognized by Viki and by FE green shati 15:20 15 minutes, 20 seconds award is something which we took in this quarter which went by. 15:26 15 minutes, 26 seconds Now just continuing as to what we have been trying to do in the manufacturing plants which we have in the company and the pictures which you see here on this 15:35 15 minutes, 35 seconds slide which is slide number 10 is the work which has been done by us in our plants in Boa 15:43 15 minutes, 43 seconds where we are now attempting to really see as to how do we measure and optimize the scope one and two which is a very 15:50 15 minutes, 50 seconds primary fundamental basic of uh you know being more sustainable. We have installed uh an on-site 1 megawatt 16:00 16 minutes capacity at both Baroda plants and just to tell you and give you a perspective if 1/4 of the power which we do is 16:08 16 minutes, 8 seconds actually sourced out of renewable resources in our manufacturing sites. If I speak about water management which we 16:15 16 minutes, 15 seconds are very conscious about we have been taking measures to reduce water uh consumption 30% and few examples if you see the 16:24 16 minutes, 24 seconds picture I'm sure you would have seen there's a pond which you see which is the rain harvesting pond and we actually 16:30 16 minutes, 30 seconds leverage this pond which we have made for using 30% of water consumption in 16:37 16 minutes, 37 seconds plant in Bodha we actually have also installed the liquid zero liquid discharge at all the plants and all the 16:46 16 minutes, 46 seconds right usage by using treated water for our washroom etc is what we have implemented in the plants. Now we have 16:54 16 minutes, 54 seconds kept safety at top of our radar and there's a reason why we have sort of bettered our rooftop safety and there 17:04 17 minutes, 4 seconds are many things which we have done in terms of foolproofing our manufacturing operations by using solutions which are 17:13 17 minutes, 13 seconds deeply engaging AI detection systems in terms of safeguarding our operators and people who actually are running operations. 17:25 17 minutes, 25 seconds Now I'm also very happy to announce and declare that we have launched and I 17:32 17 minutes, 32 seconds would urge you to go to page 12 which speaks about the latest latest in the 17:38 17 minutes, 38 seconds block which is GM set which is a primary distribution gas-based equipment which is made fully in India. 17:50 17 minutes, 50 seconds It has got all the global technologies of Schneider Electric sitting inside and this is absolutely modular and 17:58 17 minutes, 58 seconds distribution 18:14 18 minutes, 14 seconds based. It is it has got better life because you can always predict what is going wrong in the asset and of course 18:23 18 minutes, 23 seconds because it is all indigenously made localized in India. It is faster in delivery in terms of addressing the growing and agile needs of the country. 18:34 18 minutes, 34 seconds End markets for this are plentiful but to name a few are the power and grid which we are calling as cities the 18:42 18 minutes, 42 seconds transportation which is metro network airports the buildings which are high-rise buildings commercial buildings 18:51 18 minutes, 51 seconds or office spaces and of course uh the data centers which are going to be booming in times to come. Now at this point in time I would request my CFO Mr. 19:02 19 minutes, 2 seconds Aar pashad to share with you the financial performance but I'm also happy and I encourage you to go on the site 19:10 19 minutes, 10 seconds where first time we have issued a press release for the performance of the last quarter which is available in on an 19:17 19 minutes, 17 seconds SEBSC and also at our own site over to you Mr. 19:23 19 minutes, 23 seconds Thank you sir and good morning everyone and I really want to thanks everyone to taking out time to join this earning 19:30 19 minutes, 30 seconds call. I just want to give you the update on the financials performance uh of the quarter and 9 month. Uh I urge you just 19:39 19 minutes, 39 seconds go to slide number 14 where we have a highlights of 9 month and Q3. So this quarter I have to tell you that this is 19:47 19 minutes, 47 seconds the first time a quarter we crossed 1,000 K is a still a performance that in one quarter we are crossing one 1,000 K 19:54 19 minutes, 54 seconds and this has come with very good news with a strong order backlog. So if you see in the slide we have order backlog 20:02 20 minutes, 2 seconds growth around more than 50% and we have order backlog for700 cr uh you know in our company 20:10 20 minutes, 10 seconds we also uh I just reiterated that what we have explained in the earlier quarters that our focus continue to have 20:19 20 minutes, 19 seconds a you know more efficient order executions and focus on profitability. 20:23 20 minutes, 23 seconds So this will remain continue and we are continue to make sure that we execute very uh efficiently going forward as 20:30 20 minutes, 30 seconds well. In brief uh for 9 month our order booking if you look at 37% growth and 20:37 20 minutes, 37 seconds now we have a order for 9 month is 2657 cr. For quarter we have a 60 uh% uh 20:44 20 minutes, 44 seconds growth which is 999 cr. sales uh we are at 12.3% growth around 2,300 cr and 20:52 20 minutes, 52 seconds quarter we have 1,000 plus which is 20 plus uh you know of you know movement from the last same year profitability uh 21:02 21 minutes, 2 seconds I'm just calling it out before exceptional expense I will clarify you what is the exceptional expense in the in the next slide but profitability for 21:09 21 minutes, 9 seconds 9 month we have crossed to uh you know 281 cr which is 8.2 2 cr yi growth and quarter 155 cr close to 20% yi growth. 21:21 21 minutes, 21 seconds If I move to the next slide number 15 where you can see the P&L it is all already published study but I give a 21:28 21 minutes, 28 seconds little bit you know detail analysis that sales we grew around 12% as you know uh 21:34 21 minutes, 34 seconds we continue to leverage our fixed cost which is employee cost other expense uh and depreciation if you look at we have 21:43 21 minutes, 43 seconds actually if you look at percentages to sale has reduced from the likelih last year 9 month In in in finance cost also 21:51 21 minutes, 51 seconds if you look at in terms of the percentage is low and we have a good cash in the company you must have seen the balance sheet in September and that 21:58 21 minutes, 58 seconds also we are earning now certain you know income in the finance uh you know on the FDR exceptional item important to call 22:07 22 minutes, 7 seconds out uh this 9 month uh we have a graduity uh impact due to the labor code change the impact on one-time impact 22:16 22 minutes, 16 seconds which is cumulative impact till December it's coming close to 25 cr is what you see in exceptional item and this is uh 22:24 22 minutes, 24 seconds you know every company is making a provision in the December. Last year if you look at we had an income here and if you recall that we explained that last 22:32 22 minutes, 32 seconds year there was a uh litigation direct tax litigations where we opted the vat swat scheme of the government of India 22:41 22 minutes, 41 seconds tax scheme where we opted and filed the settlement and because of that there was a provisions done in previous year got 22:49 22 minutes, 49 seconds reversed so we we had an income in the last year and then expense due to labor code change we have an expense and 22:56 22 minutes, 56 seconds that's why look at the Y to Y delta it's making a negative in the PVD label that's only one of otherwise our 23:03 23 minutes, 3 seconds profitability before uh exceptional item we have grown 8.2%. 23:10 23 minutes, 10 seconds other tax expense and other comprehensing numbers as normal nothing to specify here if I take you to quarter 23:18 23 minutes, 18 seconds performance in the slide number 16 uh again here the quarter sales uh is 20% growth ex you know all the overheads 23:26 23 minutes, 26 seconds like employee cost other expense and depreciation and finance cost as normal but we able to leverage it because of the very good sales growth and again all 23:35 23 minutes, 35 seconds the exceptional item what we call out just uh in the previous slide It's actually impacted the same you know in the this quarter and also the income was 23:44 23 minutes, 44 seconds interest on reversal of DT litigation or B was based in this exactly in the same quarter in previous year. So the this 23:52 23 minutes, 52 seconds also come in the quarter moment and that's why we have a normal tax expense and we have grown the profit again before exceptional even for quarter it's around 15%. before exceptional expense. 24:04 24 minutes, 4 seconds Now I I uh hand over to our moderator uh to uh get your questions to respond back to you. Thank you. 24:15 24 minutes, 15 seconds Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 24:22 24 minutes, 22 seconds in one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press t. 24:30 24 minutes, 30 seconds Participants are requested to use handsets while asking a question and also restrict themselves to two questions. For any more questions, they 24:39 24 minutes, 39 seconds may rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 24:49 24 minutes, 49 seconds Our first question comes from the line of Mahesh Bendre from LIC Mutual Fund. Please go ahead. 24:56 24 minutes, 56 seconds Uh, hi sir. Uh thank you so much for the opportunity. Uh great set of numbers, execution and order booking. Uh 25:06 25 minutes, 6 seconds uh sir uh I mean it's a very very impressive order booking. I mean we have booked around 900 crores of order this quarter. So how the uh order pipeline 25:14 25 minutes, 14 seconds looks going forward? Is it uh as strong as what we have witnessed in this current quarter? 25:25 25 minutes, 25 seconds So Mahesh uh thank you for the appreciation and we are sitting at 1,700 KES is a order book which we have currently 25:34 25 minutes, 34 seconds which has grown upwards of 50% Y on Y and uh you know these orders uh you know 25:41 25 minutes, 41 seconds we also grew 60% as you appreciated we we see going forward these schemes 25:48 25 minutes, 48 seconds which have been getting rolled out will will boost the requirements because government is persuading that there has 25:57 25 minutes, 57 seconds to be a demand push coming and which we see that we will be able to maintain a healthy I would say order intake in coming times as well. 26:09 26 minutes, 9 seconds Okay. Uh sir in presentation you uh we have mentioned that um we have launched a GM set modular and the digital switch 26:17 26 minutes, 17 seconds gear. So uh it is is this a unique product for a uh data center? 26:25 26 minutes, 25 seconds No. Is is is a unique product but not limited to data centers? 26:30 26 minutes, 30 seconds Uh it can apply wherever you need to distribute power at 33 KV in a mo most 26:36 26 minutes, 36 seconds compact and highly distalized way. So just to give you a brief about this Mr. 26:43 26 minutes, 43 seconds Mahesh you know these are embedded with sensors which are really state-of-the-art and can give you the 26:51 26 minutes, 51 seconds entire health of the asset you know also those type of healths which were conventionally in the past was never 26:58 26 minutes, 58 seconds available so you know I don't want to get into technicals but this is something which is really out of the class 27:08 27 minutes, 8 seconds so we'll be the only uh company offering this product in India I would not like to make a comment on 27:15 27 minutes, 15 seconds it. People are trying to do something in their own ways but from our side this is very unique. 27:21 27 minutes, 21 seconds Sure. Thank you. Thank you so much sir. 27:25 27 minutes, 25 seconds Thank you. The next question comes from the line of Nisar from Value Quest. 27:29 27 minutes, 29 seconds Please go ahead. Uh yeah. Hi this is Anirut from Valuequest and congratulations on a strong quarter. 27:36 27 minutes, 36 seconds First question was to understand the gross margins uh this quarter. So there seems to be a contraction in our gross 27:42 27 minutes, 42 seconds margin uh in this quarter. So uh how should we look at it? Is it due to uh what are the factors that led to it and 27:50 27 minutes, 50 seconds how should we look at the margin trajectory ahead? 27:55 27 minutes, 55 seconds Thanks for questions. Uh when is a gross margin? Uh yes if you look at in terms of the percentage there's a dilution but 28:03 28 minutes, 3 seconds what we have the sales growth it's coming the larger the impact of the mix. 28:07 28 minutes, 7 seconds So as you know that we have a multiple segment in terms of the transactional where we offer standard product we have services then we have a projects and 28:15 28 minutes, 15 seconds equipment and IG. So it is just the margin dilution what you see the where the last 9 month versus this 9 month and quarter to quarter mix has only changed 28:23 28 minutes, 23 seconds the margin mix in the gross margin nothing unusual I will say but that's only a mix impact 28:31 28 minutes, 31 seconds right so any impact of this commodity cost inflation that we're seeing on our margins going ahead and how are the uh 28:38 28 minutes, 38 seconds contract structured in terms of price variation process etc uh for commodity inflence is not 28:46 28 minutes, 46 seconds impacted in this quarter largely because generally our projects you know tenure were to execute it you know 3 to six 28:53 28 minutes, 53 seconds month so we had a RM already on hand and process was in in WIP stage uh so that's 29:01 29 minutes, 1 second why you won't see the much impact of commodity in this quarter for sure um but yeah uh obviously as different 29:09 29 minutes, 9 seconds industry getting impacted we also foresee such impact may come And how do we hedge against that sir 29:17 29 minutes, 17 seconds going ahead I mean are we able to secure some backto-back contracts for commodity or uh is the position open now? 29:26 29 minutes, 26 seconds Yeah, but if you look at in the P&L in the last line other comprehensive income this include the hedging unrealized gain of commodity. 29:35 29 minutes, 35 seconds So yes we do hedge not 100% but we do hedge the commodity some key component. 29:43 29 minutes, 43 seconds Understood sir. Uh so final question was on uh the data center opportunity. Um how large a component in our order 29:51 29 minutes, 51 seconds inflows now would data centers be contributing 29:58 29 minutes, 58 seconds data centers till date uh sir has been roughly about 10ish and we are trying to 30:07 30 minutes, 7 seconds see as to going forward how will this contribute more for your business. Got it. Got it. Thanks and all the best. 30:17 30 minutes, 17 seconds Thank you. 30:19 30 minutes, 19 seconds Thank you. The next question comes from the line of Pimal Mitani from Credential Investments. Please go ahead. 30:28 30 minutes, 28 seconds Hello. Good morning. Can you hear me? 30:31 30 minutes, 31 seconds Uh, no. Pimal, please be a little louder. Thank you. Uh, can you hear me now? 30:38 30 minutes, 38 seconds Yes, much better. Mr. Pimal. 30:40 30 minutes, 40 seconds Yeah. So just I wanted a clarification in your opening remarks with reference 30:45 30 minutes, 45 seconds to slide number uh one minute sir slide number four you mentioned here you 30:54 30 minutes, 54 seconds had inection point can you uh tell what do you meant by in terms of cap opportunity for us and uh 31:02 31 minutes, 2 seconds second question is any time frame of coming to dividend distribution s for the shareholders 31:11 31 minutes, 11 seconds I can take the first question. My my colleague will take the second question. 31:16 31 minutes, 16 seconds See why why Mr. Primal I said uh we are at the inflection point because today uh you know we do things which are 31:25 31 minutes, 25 seconds around energy and energy management. Now for us the energy stays as electricity 31:33 31 minutes, 33 seconds and all this what you see is on the slide four are the drivers of electricity demand. 31:41 31 minutes, 41 seconds You know coupled with it as you generate more and more electricity 31:50 31 minutes, 50 seconds or energy which is either from fossil or non-fossil. 31:55 31 minutes, 55 seconds You are also going to witness very strongly the management of this energy, 32:01 32 minutes, 1 second the multidirectional flow of this energy and the manufacturing in India will 32:09 32 minutes, 9 seconds boost the demand of capex equipment which the company makes. So all in all 32:17 32 minutes, 17 seconds because there's a there's a thirst coming in which is getting witnessed and supported and reinforced by government policies. 32:27 32 minutes, 27 seconds We see a pretty stable and strong for the company. That's the reason why I 32:34 32 minutes, 34 seconds said it is more of an inflection because everything seems to be moving in almost the right direction. 32:45 32 minutes, 45 seconds So any quantity uh can you quantify the addressable market size worth in terms of I know the budget figure is quite high but what is the addressable market size worth in this? 32:56 32 minutes, 56 seconds Very difficult to answer sir because these are all different bases of segments and bases many other variables which come in picture. Uh but uh you 33:05 33 minutes, 5 seconds know typically speaking like example if you pick up uh power generation it is something else. If we speak about distribution is something else. You come 33:14 33 minutes, 14 seconds to data centers, it really depends on you know where is the data center being put up, what are the voltage class, the 33:21 33 minutes, 21 seconds distribution, the mirroring, the redundancy uh mode of data centers and many things. 33:27 33 minutes, 27 seconds So you know it'll be highly correct of me if I can give you a ballpark number which actually as percentage of 33:35 33 minutes, 35 seconds investment being done by the developer in saying this is the address market right so it really is different for reference segments. 33:44 33 minutes, 44 seconds Okay sir and the second question can you answer? 33:48 33 minutes, 48 seconds Yeah. Um your question on dividend uh you know your company has a dividend policy is there in our website and uh rest assured that the company is taking 33:57 33 minutes, 57 seconds up the necessary step to take up to the board of directors considering the all operational and you know strategical strategy and then accordingly we'll come 34:05 34 minutes, 5 seconds up you know we will let you know in in coming time. So rest assured and we know that these questions are coming from the 34:13 34 minutes, 13 seconds last couple of times. So it's there uh in the policies and we we will work it on that. 34:21 34 minutes, 21 seconds Okay. Thank you. 34:24 34 minutes, 24 seconds Thank you. A reminder to all participants please press star and one to ask a question. 34:33 34 minutes, 33 seconds The next question comes from the line of Sanjay from Goldstone Capital. Please go ahead. 34:39 34 minutes, 39 seconds Yeah. Congratulations on very nice quarter, very successful quarter. uh 34:46 34 minutes, 46 seconds going forward um uh could you share what sort of capex we have planned u for uh 34:53 34 minutes, 53 seconds the next uh for the remainder of this financial year and the next financial year 35:01 35 minutes, 1 second uh sir thank you you take this question yes so u you know as per I think sevi 35:10 35 minutes, 10 seconds whenever we take a capex budget anyway it will get announced publicly I last time what we have announced uh somewhere 35:17 35 minutes, 17 seconds in um mid of last year 2025 and updates are there in the balance in September and accordingly we'll have the 35:25 35 minutes, 25 seconds update status also in the March so definitely if anything get approved internally you will come to know you know to the announcement 35:34 35 minutes, 34 seconds okay uh so this quarter being the strongest quarter seasonally uh going forward are we to see some sort 35:44 35 minutes, 44 seconds smoothing out of the seasonality now uh in the business now that there is quite a bit of diversification across um 35:53 35 minutes, 53 seconds different applications uh different end users. 35:59 35 minutes, 59 seconds So I wish I could have answered you this uh very with certaintity but you know we are hopeful we are hopeful for the 36:06 36 minutes, 6 seconds infusion which is being done by the private sector and also by the government sector in terms of really infusing and putting up capital. Uh so 36:16 36 minutes, 16 seconds we are hopeful that you know it will become more stable slightly more predictable than what it was you know 36:24 36 minutes, 24 seconds but then I when I say this I say this situation which we see today and as all of us will appreciate that you know 36:33 36 minutes, 33 seconds because of the geopolitical situations things do uh things may go slightly off 36:41 36 minutes, 41 seconds track but then you know what we are trying to do is how do we mitigate and you know course correct ourselves in 36:48 36 minutes, 48 seconds case that those things happen. So the strong that you 36:57 36 minutes, 57 seconds Yes, one would imagine because the strong order inflow that you've got would give you quite a bit of visibility now going forward for the next year or 37:05 37 minutes, 5 seconds two and uh uh you know how this is going to be spread over the quarters and 37:12 37 minutes, 12 seconds thereby you know um uh get a little more evenly spread. 37:18 37 minutes, 18 seconds No we we could secure certain high value orders few of them and there's a reason why you see a 60% growth in the quarter 37:26 37 minutes, 26 seconds or 900 kon number you know it really depends now the way these man and these manufacturing requirements are going to 37:35 37 minutes, 35 seconds be coming up and being seen by us we are trying to the company is trying to see as to how can we really st together a 37:45 37 minutes, 45 seconds solution uh and adopt a solution approach so that we can maximize in order. So there's actually and there's a reason why I said we are hopeful that 37:53 37 minutes, 53 seconds know perhaps uh we will be able to see a stable growth in times to come in terms of what 38:01 38 minutes, 1 second okay my second questions on item uh in the other expenses basically do we have 38:08 38 minutes, 8 seconds scope to leverage the fixed element of warranty expenses and management support expenses because the these are fairly 38:16 38 minutes, 16 seconds significant items uh going forward are we going to see some operating leverage around the these uh expenditures to you 38:25 38 minutes, 25 seconds know so basically see them go down as a percentage. 38:30 38 minutes, 30 seconds See uh warranty expense uh it's not a fixed component um warranty expense depends on the volume the value 38:39 38 minutes, 39 seconds um and uh yes territory allocations and other cost uh which are there obviously we'll see the liberties for sure 38:48 38 minutes, 48 seconds right okay thank you thank you and excellent work thank you thank you 38:57 38 minutes, 57 seconds the next question comes from the line of Vira Mitani from Jupiter Financial. 39:02 39 minutes, 2 seconds Please go ahead and conver outing numbers. 39:10 39 minutes, 10 seconds So my question is we had a product called e- house and uh I think that something like that is being used 39:17 39 minutes, 17 seconds massively in data centers. So do we still have this product or 39:25 39 minutes, 25 seconds uh vir of course we have this you know we are one of the pioneers who established this technology in the country and we continue to have this and 39:34 39 minutes, 34 seconds is going strong and this is just to clarify this is has got multiple usage not limited to data centers 39:43 39 minutes, 43 seconds it is it is primary a solution which is where you are killing speed and you don't want to get into a civil 39:51 39 minutes, 51 seconds construction of a substation where you box it up in a steel enclosure and put everything and thereby making it mobile 39:59 39 minutes, 59 seconds at times and this is seen by not many people including power and grid data 40:06 40 minutes, 6 seconds centers of course do they have this at times because you know success in data centers in India is how quickly can one 40:14 40 minutes, 14 seconds make an infrastructure for uh hosting data. 40:19 40 minutes, 19 seconds So it does use it what it also use uh just to elaborate is something which is not an e-house 40:26 40 minutes, 26 seconds but is is a skid and a skid is where you put everything on a platform make it one composite 40:36 40 minutes, 36 seconds structure you know you you install it as one composite structure and it actually gives you a plugandplay advantage. 40:46 40 minutes, 46 seconds So there are many things which are evolving and let me uh assure you that we are on top of all of them. 40:54 40 minutes, 54 seconds Okay. So what is the scope like? Can you give some market numbers on this e- house or is it possible? 41:05 41 minutes, 5 seconds You know there is a very thin line. I will not be able to give you some numbers but you know there's something which goes as e- house and a 41:13 41 minutes, 13 seconds power substation or a compact substation these are usually uh a mirror term which 41:20 41 minutes, 20 seconds is used and uh you know the the e-house or stroke the CSS or PSS market if I may 41:30 41 minutes, 30 seconds say if I my senses is about 1,400 kores in the country And uh we directly or 41:38 41 minutes, 38 seconds through our partners are at a rightful uh share in this. 41:45 41 minutes, 45 seconds Okay. And so when you your slide you refer to the word digital does it you are you referring to ecosstructure? 41:54 41 minutes, 54 seconds Yes of course. So ecosstructure stays as the core the basic fundamental and if you uh you know thank you for reminding 42:02 42 minutes, 2 seconds us of ecosstructure that if you remember there's something which we call as connected and there's something which we call a edge and there's something which 42:10 42 minutes, 10 seconds we call as analytics and the connected is the one which is the distalization and sensorization 42:18 42 minutes, 18 seconds because you provide these sensors which give input to a simul or an accumulator 42:26 42 minutes, 26 seconds which therefore is topped by a layer of software which give you far more insights into anything which you would 42:34 42 minutes, 34 seconds like to seek. So yes, BISL is the basic backbone of Ecosstructure and how the revenue shared interrupt a 42:43 42 minutes, 43 seconds vira. I would request you to rejoin the queue. Thank you. The next question comes from the line of Push from Bartleywala and Karani Capital. Please go ahead. 42:53 42 minutes, 53 seconds Uh congratulations on a very great set of numbers. Uh I I wanted to understand currently what is the percentage of 43:01 43 minutes, 1 second exports that we have and will any of these uh free trade agreements that have been signed in particular the EU FDA 43:08 43 minutes, 8 seconds have any b you know benefit to us okay so uh if you look at exports today 43:17 43 minutes, 17 seconds in 9 month if I give you the number it close to 11 to 12%. Okay. And we also 43:23 43 minutes, 23 seconds have a certain recharges. So that's a mix we have in exports. 43:31 43 minutes, 31 seconds And do you just to add just to add to what sorry just what Mr. Omar said you know these are very positive movements which we are 43:40 43 minutes, 40 seconds trying to do a free trade agreements uh with EU which we all saw. We are still trying to see as to what 43:48 43 minutes, 48 seconds additional business will it translate for us because it is not yet out in great details as to what will it 43:56 43 minutes, 56 seconds facilitate but overall there is a positivity uh between uh you know India and uh European nations. 44:06 44 minutes, 6 seconds Okay. And uh my second question is uh do you have any kind of guidance uh that you can give for you know Q4 generally being the strongest quarter? Is that 44:15 44 minutes, 15 seconds something that we can you know continue to think of in this FYI as well? 44:24 44 minutes, 24 seconds You know I cannot be I cannot be telling you any numbers but but we what we be rest assured that your company is trying 44:32 44 minutes, 32 seconds to do the best we can under the given confines of operations which we have. All right. Thank you. 44:40 44 minutes, 40 seconds Thank you. Participants please press star one to ask a question. 44:47 44 minutes, 47 seconds The next question comes from the line of Gal Bansil from NPG Investments. Please go ahead. 44:55 44 minutes, 55 seconds Yeah, good afternoon and my question is to Mr. Udai Singh. We heard your opening remark which this which talks about a 45:02 45 minutes, 2 seconds very strong footing of the company and it is well supported by your financial number. So my question is what what are 45:11 45 minutes, 11 seconds the challenges or concerns which you see which makes you worried? 45:19 45 minutes, 19 seconds Mr. Bunal, thank you for asking this. 45:23 45 minutes, 23 seconds You know today we uh if you really ask me uh the the the topmost priority of us 45:32 45 minutes, 32 seconds is is how do we have a profitable growth which means that we have to pick up the right strategic contracts. 45:43 45 minutes, 43 seconds two as I think in in just few minutes ago there was another gentleman asking how do we mitigate and the risk of uh 45:52 45 minutes, 52 seconds raw material impact which we might see in times to come and what at this point in time I want to say that while there 46:00 46 minutes can be an impact but the actions internal actions taken by us is how do we mitigate that impact to the least so 46:09 46 minutes, 9 seconds if you really ask me today uh Mr. Bansel we are trying to see as to in this 46:16 46 minutes, 16 seconds geopolitical situation in this absolutely volatile raw material uh scenario 46:23 46 minutes, 23 seconds in the growing demand which is challenging capacities of manufacturer. 46:28 46 minutes, 28 seconds Number one, how do we pick the right contract? Number two, how do we exclude it profitably mitigating the risk and 46:36 46 minutes, 36 seconds volatility of raw material which those contracts might offer? 46:42 46 minutes, 42 seconds Yeah, thank you. I think this is helpful. 46:46 46 minutes, 46 seconds Thank you. The next question comes from the line of Pratik Dhi from Union Mutual Fund. Please go ahead. 46:54 46 minutes, 54 seconds Yeah. Uh thanks for uh giving me a chance to ask a question. U many congratulation team for a splendid set of numbers. Uh couple of questions from 47:03 47 minutes, 3 seconds my side. one uh is which are the sectors which you are seeing uh good growth or 47:10 47 minutes, 10 seconds positive tailwinds uh currently uh and from next couple of year point of view and the second question is uh we have a 47:18 47 minutes, 18 seconds lot of our products uh in the distribution capeex side uh uh as well. 47:24 47 minutes, 24 seconds So what uh what are you uh what's what's your understanding uh in terms of u 47:31 47 minutes, 31 seconds potential uh discom related uh uh opportunities going ahead for our products 47:42 47 minutes, 42 seconds uh see this RDS scheme is is a is a is a booster 47:48 47 minutes, 48 seconds and in uh you know I can I can uh I can wrestle out many views on segment wise, 47:56 47 minutes, 56 seconds but for us what stays uh important is the power and grid and you rightfully mentioned in terms of how do we how do 48:06 48 minutes, 6 seconds we maximize our presence in the distribution sector of part and grid. 48:13 48 minutes, 13 seconds There are many states which are uh which are augmenting their infrastructure, modernizing their infrastructure 48:22 48 minutes, 22 seconds notable not only tangibly by putting up the capex equipment which we can offer 48:28 48 minutes, 28 seconds and supply but parally there's a lot of push which actually has been happening 48:34 48 minutes, 34 seconds in terms of how do they modernize the localized and the national grid. Now 48:41 48 minutes, 41 seconds just to give you some insight even the ministry of power has been actually advocating 48:50 48 minutes, 50 seconds uh extensive usage of AI and ML for making the grids more resilient and transparent. So we see this as as a 48:59 48 minutes, 59 seconds major booster. We see the mass rapid transport in the country is is is going 49:07 49 minutes, 7 seconds up. We are talking about airports being made the new ones. We are talking about 49:14 49 minutes, 14 seconds metro networks being uh getting established besides the the four metros 49:23 49 minutes, 23 seconds to our other cities. We know that data centers will see a spike which will 49:30 49 minutes, 30 seconds again fuel the power demand. So all in all we if you ask me is there are many 49:36 49 minutes, 36 seconds segments which are really clicking and hopefully if everything is going right as planned it will give us a stable environment to operate in times to come. 49:49 49 minutes, 49 seconds Sure. And just to follow up on that u considering uh lot of levers for growth for our company uh there are scope for 49:58 49 minutes, 58 seconds also operating leverage uh to kick into our business. So are you happy with the current margin band or over time do you 50:05 50 minutes, 5 seconds see there is opportunity to uh get better on the margin side as well 50:12 50 minutes, 12 seconds as I said sir we are trying to do business profitability so we are always in constant search for how which areas 50:19 50 minutes, 19 seconds do we optimize the cost which areas can we get better prices so there's a continuous rigor which we have in the 50:26 50 minutes, 26 seconds organization so the leverage of volume will certainly come because as you know is there on our website the capex which 50:35 50 minutes, 35 seconds we're infusing in all our three plants in terms of getting ready for the future is it's those volumes certainly there 50:43 50 minutes, 43 seconds will be some advantage and some leverage will come on the profitability got it thanks a lot thanks a lot and 50:51 50 minutes, 51 seconds wish you all the best thank you thank you the next question comes from the line of Sanjay Kohli from Goldstone 51:00 51 minutes Capital Please go ahead. 51:02 51 minutes, 2 seconds Uh thank you. Um so do we uh provide the breakup between um our central government deals and the state government deals? 51:13 51 minutes, 13 seconds The percentage uh for instance this uh Bihar uh South 51:20 51 minutes, 20 seconds Bihar South Patna disp uh case study which you've highlighted in the presentation. uh is this uh I mean it's 51:28 51 minutes, 28 seconds a related question is this a recent relationship and uh going forward it would probably extend to number of years 51:37 51 minutes, 37 seconds and how how significant in particular uh would I mean if if you can give some 51:45 51 minutes, 45 seconds some sense of some uh kind of number uh to this sort of thing and the division between the center and the 51:52 51 minutes, 52 seconds state some sort elaboration of elaboration of this sort of this case study. Yes. 52:01 52 minutes, 1 second So Sanjay G, I'll try to answer this and I I hope that I'll be able to clarify you know uh I have not greatly 52:10 52 minutes, 10 seconds understood uh the split which you are seeking between center and state but if there's any uh distribution company 52:17 52 minutes, 17 seconds which is government run uh seeks funding they have two options. 52:25 52 minutes, 25 seconds option is it is it is done by the state and as you rightly said OB it is funded partially or fully by center and there 52:35 52 minutes, 35 seconds are two nal agencies which were RC and PFC who used to do that which are getting merged by the way 52:43 52 minutes, 43 seconds now uh that really doesn't matter to us as to who's the funding against 52:50 52 minutes, 50 seconds is eventually we need to have clear right of way we need to have clarity in what we need to supply. We need to have 52:59 52 minutes, 59 seconds clear support from the state coming in to implement our solutions and handover. 53:04 53 minutes, 4 seconds If that is there to answer your question, we don't have the of we don't track as to how much is state and 53:11 53 minutes, 11 seconds central funded. Now two, you were asking about Bihar. That's something which we 53:18 53 minutes, 18 seconds we have actually commissioned to the last mile some time ago in recently. But 53:25 53 minutes, 25 seconds what we are trying to showcase is that there are certain uh cities which have ambitions to become 53:34 53 minutes, 34 seconds a smarter and a very important piece of this is how do you make the basic necessities available 24/7 53:42 53 minutes, 42 seconds and this is just a showcase of that which you know Patna has done where you 53:49 53 minutes, 49 seconds know if you I do not know whether he got a chance to visit Patna 25 years ago and what you see partner now in terms of 53:57 53 minutes, 57 seconds availability of R and the support which the SOM is able to give it been getting possible because of the solution. 54:04 54 minutes, 4 seconds Yeah, huge huge huge difference obviously as well. Hello. Thank you so much sir. Thank you. 54:14 54 minutes, 14 seconds Thank you. Thank you. 54:17 54 minutes, 17 seconds Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to the management for the closing remarks. 54:28 54 minutes, 28 seconds Thank you so much. Uh and uh I really uh would like to extend thanks and for the 54:37 54 minutes, 37 seconds appreciation which you you have given uh to the team here along with me. I have uh Mr. Moit and Mr. Omar who has joined 54:45 54 minutes, 45 seconds for this and uh I wish you a great day and uh lots of health and wealth in coming 54:54 54 minutes, 54 seconds times. Thank you so much. God bless you all. 54:58 54 minutes, 58 seconds Thank you sir. Ladies and gentlemen, on behalf of Lara Securities, that concludes this conference call. Thank you for joining us and you may now disconnect your lines.