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Schneider Electric Infrastructure Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '23 Earnings Conference Call of Schneider Electric Infrastructure Limited hosted by Elara Securities Private Limited. [Operator Instructions] 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.
Thank you, Margaret. Good evening to everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY '23 conference call of Schneider Electric Infrastructure Limited. I think it's opportunity to welcome the management of Schneider Electric Infrastructure that are presented by Mr. Sanjay Sudhakaran, Managing Director; Mr. Mayank Holani, Chief Financial Officer; and Mr. Vineet Jain, Head of Investor Relations. We will begin the call with a brief overview by the management followed by a Q&A session.
I'll now hand over the call to Mr. Sudhakaran for his opening remarks. Over to you, sir.
I'm the Director for Schneider Electric Infrastructure Limited, and I'd like to welcome...
Sorry to interrupt you, sir. We lost the audio for a few seconds from your side. May I request you to please repeat yourself from the beginning. Thank you.
This is Sanjay Sudhakaran. I'm the Managing Director of Schneider Electric Infrastructure Limited. I welcome all of you, a very good afternoon to all of you, and I welcome all of you to this earnings call, please. So without much ado, I will go straight to the presentation.
If we go to the Slide #3, which is Page #3, we will briefly talk about the outlook of the country. As you can see that the GDP forecast for the country has been slightly brought down from the earlier bullish outlook that we had. This is primarily due to there are concerns regarding the global situation, inflation in certain countries are very high. There is fear of economic recession, the freight is cutting -- increasing the rates, et cetera, and also a feeling of reduced consumption in the rural economy in India.
However, I would say that the demand pattern continues to look strong in terms of our segments, which we will talk a little bit later. So we assume that these concerns around the global situation, et cetera, would fairly leave India untouched, at least for a few quarters from till now. That's what our expectation is. But it's a very dynamic situation out there in the globe, and it is very hard to predict the situation as we go forward. So we treat these parameters, et cetera, with a certain amount of caution, and we plan our investments and our way forward accordingly.
Going on to the next slide, a little bit overview on the key segments that we operate in. The Power & Grid sector continues to show strong promise despite the challenges here, the privatization, which is not going as fast as the government assumed it to be. But there is significant amount of money that is being pumped in for digitization and modernization of the network, so we continue to piggyback on this particular activity.
Also, there is a major thrust towards renewables. There's a firm commitment by the government of India to change the energy mix of the country by 2030 and by 2070, so I think there will be continued investments in solar, and we are also planning our product introductions, et cetera, in line with this trend that we see. Of course, there is a great push for Make in India. We have a factory, and we have the technology available to localize products and keep adapting products as we go forward.
On the Mining, Minerals & Metals, I think it has been a strong 2 years, but we see some consolidation signs happening in the market as far as cement is concerned. And all over, you would have also heard about some large-scale exits. There will be some conservatism as far as CapEx is concerned in this segment going forward, and perhaps we would need to brace for that as well. But there is a huge push for sustainability solutions in this particular set initially given the nature of the business that it is in. So there are sustainability projects which are being launched by these corporations, and we will definitely benefit from this trend.
On the Mobility side, which is primarily transportation, automobiles, EV charging, EV equipment, et cetera, I think there are very positive science. Infrastructure buildup across the country, both in terms of road, metros, EV charging facilities, et cetera, and we are well poised to be a very strong player in this segment as well.
The Data Centers segment continues to be strong. We see more and more players coming into India, and there is a huge buildup of data centers happening in India. And these are also sort of electro-intensive, and we see that these macro trends will benefit the country as we go forward and the company as well.
Going on to the next page, which is Page #5, I think the entire story around Schneider and it's push towards sustainability is to make sure that more and more products that we have are digitized, connected, connectable, sensorized, et cetera, to make sure that we leverage big data across these products and be able to optimize solutions for the customers, move from more of a reactive maintenance to more of predictive maintenance and use apps and analytics to be able to succeed in this particular segment. And we have a basket of softwares, which are primarily Schneider softwares, which we can leverage to be able to be part of this journey, and we are preparing our equipment also to be in line with this journey.
So going on to some of the wins that we have. On the digital wins, we see that there is a very good project which we are doing for a large cement company on the waste heat recovery. As I told you, there are sustainability trends in cement industry which cannot be ignored. And there will be CapEx flowing into this particular segment to make sure that the segment is more sustainable as we go forward. And we have a good play with our equipments as well as digitization offers to be able to succeed in this particular area.
Going on to Slide #7. Here is another repeat order from a defense facility for one of the submarines, which was equipped by Schneider panels. There is a large pull-through. This is the second order of a large magnitude which has come to us in the previous quarter, and we continue our story on services here positively.
Going on to Slide 8, some of the emerging segments that we spoke about, wins in the EV Charging segment. It's still nascent to begin with, but it's a strategic area, and we are focusing here to make ensure that we enable our entire suite of products, connected products as well as the various softwares and micro grids, to be able to succeed in this particular segment. We have prepared ourselves with a small team, which is working on the conceptualization and the follow-through for this particular segment.
With this, I hand over to Mayank Holani, who is the CFO of the company, to give you a little bit on the financial update. Over to you, Mayank.
Thanks, Sanjay, and good afternoon, ladies and gentlemen. So for Slide #10, for orders intake for the quarter stood at INR 3,680 million for the quarter, which is up by about 27.5% over last year's same quarter. And this growth is mainly driven by Cloud & Service providers and Mining, Minerals & Metal segments. And as a result of this good order growth, it has helped us in improving the backlog by about 8% versus the March '22 quarter. So in last 3 months, we have built up additional backlog of about 8%.
Sales for the quarter grew about 28.9% at INR 3,715 million, which, in terms of segments, it was mixed bag, some positive, some negative, and -- but it has been a good debt to us. We remain cautious in terms of order bookings with respect to the terms and conditions, payment time lines and all to ensure that our margins and cash is secured, and we don't misconduct.
So further on, we'll move on to the next slide to give you an overview on P&L. Slide #11, please. Okay. So sales as we discussed. There's additional sales, and with the improvement in mix, we have been able to improve our gross margins by about 2.2% versus previous year, same quarter. And our net profit for the quarter stands at INR 138 million. Before exceptional item INR 138 million versus a loss of INR 161 million in previous year. So that's a delta of about 9.3 points.
And exceptional item, which you see here, is kind of the loan adjustment, the fair value adjustment, as well as based on the extension of loan which we done, which was the already existing loan. So that promotional gain recorded in the accounting. So the net profit after tax is about INR 264 million versus INR 161 million loss in previous year.
This quarter was also impacted by raw material inflation. And while we continue to perform to the -- impact to the customers, as and wherever possible. So partial impact is going to customers, partial is impacting the P&L. But I can say we have been managing it pretty well in the circumstances which are there, considering the price hike, raw material shortages and some of the hedging, et cetera.
With this, I will close here and leave the floor open for Q&A. Thank you.
[Operator Instructions] The first question is from the line of Aditya, an Individual Investor.
I'm Aditya. My question here is, what is the current backlog at Q1 '22?
So our backlog as of end of June '22 is INR 10,079 million or about INR 1,008 crores versus INR 9,332 million at the end of March '22.
So backlog has increased?
Yes. About 8% increase versus March.
And how are you placed in terms of supply chain now?
See, supply chain situation remains challenging. So electronics are still not normalized. Then due to the Ukraine conflict, there have been challenges on a couple of other commodities also like some specialized steel and all. So it's -- we can't say that it's normal.
Okay. Got it.
Thank you.
The next question is from the line of Anurag Patil from Roha Asset Management.
Sir, if you can briefly touch upon all the 4 segments, how do you see the order inflows panning out in the next couple of quarters? That would be helpful.
You mean the mix, right?
No, sir. How is the situation means order inflow, whether you're expecting stronger inflow in any of these segments. Particularly in the Mining and Metals, are you expecting any slowdown due to metal price correction, et cetera? That would be great.
Sanjay, you want to address this?
Yes. So we did touch upon this topic briefly. It is not because of the softening of pricing that we see that -- see, India has requirement for infrastructure. So basically, the strong drivers for growth is infrastructure demand, right?
So -- but we see that there has been good amount of CapEx formation in and investments into the cement sector in the past few quarters. So we might see a little bit of slowdown if the infrastructure growth does not keep pace. So that's the kind of outlook that we have. It's too early to say for sure.
Particularly, sir, on the Metal side, are you expecting any delays or postponement of CapEx? Because some of the large cap goods companies are kind of witnessing such kind of delays.
See, if you say Metals, Metals has been kind of -- there has not been a lot of fresh investments into Metals in the past few quarters, if you really see. So we don't see a material change.
Okay. Okay. And sir, next question is on the gross margin side. So do you think these kind of gross margins are sustainable going forward? Or any color on how the raw material prices are panning out for us? Are you witness any correction, you would say?
See, this is even -- obviously, this margin which you see in current quarter is a bit higher than the average for last couple of years also probably because of the mix, right? So this is obviously a little bit higher margin than the mix. But yes, in this -- already, there is an impact of raw material inflation factor. So if debt normalizes, then we should see a better margin.
But our continuous focus is on improving the mix. So the margin improvement comes from the one that's rising, but it's always a competitive market. But we continue to focus also on improving the mix which helps the P&L.
Okay. Sir, I will come back in the queue.
[Operator Instructions] The next question is from the line of Viraj Mithani from Jupiter Financial.
Congratulations on outstanding numbers. Can you give me the break, what is our order book size and breakup segment-wise?
So order book size at the end of June, as I mentioned earlier, is about INR 1,008 crores.
Okay. And can you give the breakup of the segment?
Breakup of this segment, is about 6 -- systems, 64%. Transaction, 22%. Services, 14%.
Okay. And the next question is, we talked about in the presentation defense, and in what kind of way we do have in defense? Can you give more color on that? Like the submarines, which you mentioned.
If you would say it is because of the installed base in the submarines that we are getting the pull-through revenue. So the concept that we are trying to tell you is that we are focusing not just on the CapEx businesses. We are focusing on the life cycle revenue that our CapEx can generate over, say, 15, 20 years of time. So one of the levers is spare parts. The other lever is software and analytics. And the attachment that it brings to your services revenue. And through analytics, the pull-through parts that you can generate.
So it would be broadly a service-based revenue, right? It's fair to assume that.
Yes. Broadly service-based revenue. You're correct.
Okay. And this is on the submarines supplied by the plant or something like that? Or only submarine in defense?
This was a submarine that was supplied outside the country, figured outside in the country. But however, since it's in India and the responsibility for the services is with us, we are continuing our relationship with the customer.
What would be the order size? If you give me some color, I mean, what is the scope of this business?
Actually, without customer permission, we are not allowed to divulge financial details into public domain. That is the reason why we are not giving you the number, but it is pretty substantial.
All right. And sir, in your presentation, you talked about softwares. Are you referring to EcoStruxure by any chance in the software?
Yes. EcoStruxure, as you know, has different domains, okay? EcoStruxure is not just one product. EcoStruxure is the generic brand name, but EcoStruxure has a different products for Power and Grid, different products for Transportation. Some of the elements could be common, some of the elements could be different. So there are a number of suits within the EcoStruxure.
And sir, how will this revenue pan out in terms of services or how? Like, I understand we take from the parent, and we pay something to the parent, right, for the software services, right?
Yes. We buy the product. So it's a license basically, right? It's a license that you buy from the parent, okay? And then you sell it to your customers, okay? So there are 2 kinds of softwares that are available, one that are hosted on the cloud and one that is hosted on the edge. What I mean by edge is on-prem.
On the premises of customer. With the customer uses without any help from our side, there, the pull-through revenue happens in terms of the upgrades that you are able to bring to the table. For example, if you have new enabled features, et cetera, you are -- if you can sell an upgrade to the customer, so that is the services revenue that comes about.
There are certain softwares which are on the cloud, which provide analytics. So here is an opportunity for us to partner along with the customer and be part of this journey to be able to provide them insights on what he needs to do better on the maintenance side. What is going to fail tomorrow that he should replace today to prevent a downtime. So these are value-added services that you can sell.
Is it a transaction-based revenue, or it is a fixed price contract with that customer?
No, no, it is not a trans -- it's neither a transaction nor fixed price. There is a portion which will be fixed price, which is your consultancy services. And there is a portion which comes, which is on demand on what you will replace or what you will assist him with, which is based on offer to offer.
And revenue which comes in, we shared with the parent, right? So both of us share the revenue, that is true, right? It is the right way to think about it, right?
The Services revenue and the Analytics revenue, et cetera, are most of it in the country itself. It's all within the country, within the business. It's only the cost of the license that you need to pay them at the -- when you are procuring the product.
I would request Mr. Mithani to rejoin the queue for follow-up questions. The next question is from the line of [ Kausthubh Bhuvan ] from BMSCL Capital.
Can you hear me?
Yes, we can hear you.
Great. So on Page 5 of your presentation you list out...
Before we proceed, I'm so sorry, sir, to interrupt you. Can you please come on the handset mode? I think you are on speaker. It's not very clear.
Okay. Yes. Now, can you hear me?
Sir, please come on the handset mode and come closer.
Yes, you can hear me now, right?
Yes. Now it is clear. Please go ahead.
Perfect. So basically, on Page 5 of your presentation, you list out 4 segments, right, Power and Grid, Mining, Mobility, Data Centers. So out of this INR 370-odd crores of quarterly revenue that you've done, is there any way you could break up the split, the revenue split for these 4 segments? And also, where do you see these segments in terms of growth in the next 3 to 5 years? Which segment do you see growing faster than the other? Could you give some sort of color over there, please?
So we do not provide guidance by segment and a breakup to that detail, but I could give you a certain color on the overall market dynamics.
Okay. That will be good.
Okay. So if you see Data Centers, they would have a CAGR, which is in excess of around 12% to 13% even at a very pessimistic level of estimates, okay? And a segment like Power and Grid would have something like a 6% to 7% CAGR because of its -- the base revenues itself being so higher. Whereas something like Transportation would be somewhere around 8% to 9%, and Cement and Steel, et cetera, are in spuds, it's very cyclical. So over a, let's say, over a 3-year time frame, it could be around 7% to 8% -- 7%.
Okay. But what I'm basically trying to understand is how much of your total revenues is the Cement and Steel portion, because that's the cyclical part? So is it fair to assume it's less than 25%, 30%?
It's less than that, because if you really see the largest driver for this business has always been the Power and Grid segment. So I would say that the dependence on Cement and Steel would not be in excess of 15% to 20%.
[Operator Instructions] The next question is from the line of Aditya Deora from [ Divija ] Investments.
Yes, am I audible?
Yes, you are.
Yes. Sir, over last 8 quarters, our performance has more or less turned around. So sir, can we attribute a part of the performance to the L&T -- to the acquisition of the L&T Electric and Automation business by the group? Are we seeing any synergies from that end?
So the L&T business acquisition has taken place in other entity, right? Not in this entity. So directly, there is no relation. So debt business is anyway largely in other product lines, right? They are not present in the product which we are dealing in this entity. But obviously, some synergies do come in, as you know, get to a bigger size. But it's not -- can't be said, okay, it's due to the -- since that acquisition by the group.
So sir, what will you attribute the reason for the turnaround? For the last 7, 8 years, we were not performing very well, but something has changed over the last 8, 10 quarters inside the company.
See, it was -- I mean, the actions are continuing and it has been a slow and steady progress. So if you see the last year -- but in between, also, I would say a year was wasted due to the COVID also, right? The COVID wave came in, then obviously, we saw a drop in revenue in the financial year '19, '20.
But then obviously, our core focus has always been on improving the terms and conditions, picking up the right orders and securing cash because a big problem has been in this business earlier, if you have been tracking, on the sales or the bad debts, right, the collections which we are losing and had to quote for in the P&L. And then we have been working on the operational efficiencies as well, rightsizing the organization and restructuring wherever required as for the market conditions.
So debt has started showing there. And then the volume obviously plays a role. But we need to also keep in mind that in the last 1, 1.5 years, it has been quite turbulent in terms of raw material inflation and all. And this performance is really the kind of, I would say, well in the sense that managing the inflation and then delivering a profitable result is a big part because your contracts are on fixed prices, right? They are not the most majority -- large majority is on fixed price. So that way, it has been good and had it been a normal year, it could have been even better.
Sir, in answering to a query of one of the previous participants, you were mentioning that we should not see just how much revenue are we -- or how much profit margin are we making from one particular project, we should see life cycle revenue. So sir, incrementally, year-on-year, do we see -- I mean, here on, do we see the services and the spare part improving in our revenue and our total revenue as a percentage of our group revenue?
If you have been tracking Services, share in our mix has been improving over last many years, not just in 2 years. So slowly and gradually, services share has been improving. But obviously, it's not a drastic change. It's that certainly, it will become, say, from 10% to 15% or 15% to 20%. Because this industry is like that where people don't take too much of service contracts unlike some other industries. But gradually, the Service share has been improving.
So the Services revenue is at a higher margin, right, as compared to the initial products that which we supplied?
Services obviously comes at a higher margin.
Sir, coming to your presentation on Page 8, you have mentioned about emerging segments are wins, some EV charging infrastructure work or something that we might have sensed. Sir, can you just elaborate what we have done or what we plan to do in this particular segment?
What's going to happen is that we are going to move away from a centralized generation and distribution of energy to more offer distributed generation and a prosumer effect, where a consumer of electricity will also be a producer of electricity.
So you could see many charging stations, et cetera, where you would have a mix of power usage which is more -- which is a mix of what you take from the grid, which is your conventional energy, and some of its own solar generation as well. And then you would have the EV charging associated with this. So all this presents a very solid opportunity for electrification, A. B, digitization, because of the fact that when you're using mixed sources of energy, you will not be able to manage the grid very efficiently without softwares. And C, because of the sheer scale at which EV will grow in the country, this will require a very large amount of focus in terms of infrastructure development. So all this presents a very good opportunity for electrification and digitization, which is our core focus areas.
Sir, have we got any orders in this particular segment as of now?
So right now, I would not like to talk about the wins. It's a little bit premature, so we will share more details with you as we go forward.
The next question is from the line of Nikhil Jain from Galaxy International.
I just wanted to actually check, orders that we have of around INR 1,000-odd crores. So what is the time frame in which it is to be executed?
See typically, depending on the -- for different products, the time frame ranges between 3 months to 10 months, 8 to 10 months. Typically, based on the product side, and some one-off contracts may have even longer period.
Right. So for simplicity's sake, can we take, let's say, around 6 to 7 months on an average, some projects higher, some projects lower?
Yes.
Right. Okay. And second thing is that once we take an order and especially in the longer-dated orders, so is there a clause for raw material escalation, or is it like kind of fixed?
See, we obviously want to have a price variation clause in each and every contract and we push for that. But -- sorry it depends on the customer conditions and how the competition is also going. But largely, contracts are fixed price.
Largely, contracts are fixed price, okay. So if the raw material prices fall, then whatever -- if that gives us a benefit, we can retain that and vice-versa. So if they rise, then whatever hit we have to take on the EBITDA margin, we take that, right? More or less?
Yes. But it will be a kind of mix because what happens since you are doing hedging. So if prices fall, you get a loss from the hedging. And then also you don't see an immediate result, right? Because if you -- I'm ordering today, I've been getting material after 2 months, 3 months. And it's a mixed bag, right? Still some commodities are going up, some are coming down. But yes largely, on the long run, if it will get -- it should not be too negative.
Okay. Okay. The next question I just wanted to ask was that we were referring in the opening remarks that there are some new products that we are kind of introducing. So is it like possible to give some color on what are the kind of products and which India segments you are doing that?
Little bit on the solar piece, where we would be introducing certain products to be more able to cater to that segment and the growth in that particular segment. We also see a very strong growth on the Ring Main Units, et cetera, given the infrastructure growth in the country. So we'll be introducing some products around those areas as well. And we'll be happy to share with you the progress as we go forward.
Sure. Sure, sir. Okay. And one final question, and that I actually wanted to get not a guidance, but basically some kind of a qualitative view from yourself. On -- let's say, what's the kind of, let's say, revenue growth, let's say, we look forward to, let's say, over a period of, let's say, 2 to 3 years, right? So are we saying it is possible or it may be possible to grow by 10%, 12%, or we will aspire? Not possible, actually, aspire to grow by this much, aspire to grow by that much.
And also on the EBITDA margin. So what would be the kind of EBITDA margin that you actually aspire to get to? Because it has been very variable, right, from 0%, to let's say, 7% in some quarters to 12%, 13% also. So I just -- I'm trying to understand what may be kind of let's say, modeling perspective, what can be the reasonable EBITDA margin which management would actually be looking to get to?
See, generally, we don't provide any guidance in terms of future revenue or margin. But I just would like to give one comment because here, the quarter we are comparing last year. Q1 was an exceptional one, which was effected by the COVID second wave, right? So that has also impacted the quarter. But as far as guidance is concerned, we don't provide any guidance for future.
Right. I understand that. I appreciate. So -- but the only point that I was looking for is, let's say, in this business that we are doing, actually, right? So what's the kind of -- some kind of aspirational margin that we have, right, which we are looking for, whether 10% is good enough for us? We are targeting 15% or we will look at 8% is good enough for us. So something like that is what I'm just trying to get a hang on. Like guidance consent, not on a quarter-on-quarter or year-on-year basis. But at least a direction in which -- yes.
I won't comment on that. But I would only say that okay, we will -- adversely not be looking at the margin from a quarterly perspective or because quarter-on-quarter, sometimes this is the project business, so the numbers may fluctuate, right? The volumes fluctuate and that directly affect margins.
[Operator Instructions] The next question is from the line of Manish Goyal, an Individual Investor.
Yes, sir. I would like to just get more perspective on the revenue mix change, what we have mentioned which has led to improvement in gross margins and EBITDA margins? And also what we see, other expenses have actually declined Y-o-Y despite strong topline growth. So I just want -- if you can probably give more perspective as to how sustainable it is, and maybe if you can share the revenue breakup on systems, equipments and transactional products? That would be helpful.
Yes. So Manish, the revenue breakup for the quarter, if you see, this quarter has been System, 69%; Transaction, 21% and Services, 10%. While if you look at last year's same quarter, it was 75% for System, 17% for Transaction, and 8% for Services. So about 4% increase in Transaction and 2% in Services. So that is the mix change which I was mentioning.
And also there was -- within Equipment also, there was a one product line, there was a milestone decline, product which was giving a lower margin. That also helped improving the margin.
Now on the second side of your question, if you see direct and sales. It's mainly the savings coming from -- saving for the old debts recovering, which has reduced expenses. So old debt recovery and the ForEx gain. So these are 2 items which have reduced. Otherwise expenses, which are directly linked to volume, be it freight or travel last year, there was not much travel in this quarter because of COVID. So travel has gone up. Freight has gone up. Trademark fees linked to volume, that has gone up. But the rent -- as there were some savings, obviously, it's a part of the continuous focus on cost savings. And then the old debts collection and ForEx are the major items which have negated all the impact of increasing costs. And overall, you see the lower other expenses.
So would it be possible to quantify how much recovery and ForEx gain we had in the quarter?
So that is about, if these 2 items to add together, it's about INR 75 million.
Okay. And Mayank just -- maybe if you can probably get -- so I just want to get a better perspective on this INR 1,000 crore order book, what we had. So is it possible that the kind of gross margins, what we have seen based on the current order book, we are more or less likely to remain near these levels?
So we see our order booking margin as such has not changed drastically. So on either sides, so it will continue to be in the similar range.
No, where I'm coming from is what improvement we have seen due to better revenue mix and, as mentioned in a presentation, on improvement in productivity. So like, do we see this trend continuing going forward?
No. See, I think this mix change is, I mean, too wide. So debt exactly, while we continue to focus on improving the mix and we've seen a gradual improvement in Services mix and Transaction. But exactly this kind of mix may not continue, there it can keep fluctuating quarter-on-quarter.
Okay. But broadly directionally, we see that our margins should be on improvement trajectory?
Yes. The last year anyway was an exceptional year in terms of raw material inflation also, right? Because margin is also derivative, which is something not in completely in your hands, when you have a fixed price contracts, right. So debt should improve, which will benefit in margin.
Can you give me the intergroup revenue number for the quarter and also for the last full year?
So IG revenue is...
22%.
Is about 22%.
For the quarter?
Yes, for the quarter.
So what would be the order inflow number for IG?
Order is -- order number?
Order inflow number? Or is it that the revenue number is similar to the order inflow in the IG category?
So order -- absolute number, if I tell you is for the quarter it's about INR 780 million. INR 78 crores for this quarter.
Okay. So do you have number for last full year, FY '22, what was the IG revenue?
Last full year, just give me a second.
Last full year, order intake number or...
Yes. He's asking for revenue number.
IG number is 23%.
So it was 23%, Manish.
The next question is from the line of Suraj Nanda from ICICI Prudential Mutual Fund.
So I just wanted to understand like what in the mix, how much is projects and how much is products?
Sorry, can you repeat your question?
Yes. In the mix, how much is projects. How much of the revenue is coming from projects and how much is the products?
Okay. So I think I mentioned already, so on sales our Transactions is 21%, Services is 10%, Projects, 11%, Equipment, 36%, and IG, 22%, so which together we call it Systems, 69%.
Okay. Okay. So Projects is only 11%, is what you are saying?
Yes.
Okay. And sir, on the borrowing side, we see that the debt level is pretty high and a major part of it is through loan from the sister entity, I think Schneider Electric IT Infra, I think something. So how are we planning to reduce the debt, and as a result, the interest component in the...
See, the debt, if you see from last year, I mean, in last financial year from March '21 to March '22, also if you had seen in the annual report and the financials, debt has improved, right, with the improved collection. So the way is to improve the operational performance and to get profit and cash in hand, so that way only we can reduce the debt. I mean at this stage, we don't have any other plan to reduce the debt.
And is the -- has the payment scenario for you improved in terms of days?
Yes, it has improved in terms of days. And definitely because that's what reflects in our cash flow also, if you had seen the last quarter call or last financial results for the full year, our cash flow from operations was about INR 120 crores versus, I think, INR 6 crores, INR 7 crores in the previous year. So there has been a significant improvement in the collections and the cash utilization last financial year. And the same trend continues in this quarter as well.
Okay. Okay. And are there any CapEx plans for -- indigenization or anything? Or the entire cash flow generation will be used for maintenance CapEx and paying back of debt?
No. At this stage, nothing specific or major CapEx finalized or in plan.
The next question is from the line of Viraj Mithani from Jupiter Financial.
My question is, have you stabilized in terms of raw material prices by now? Like, what's your sense on the market? Are we seeing some stability coming there?
The raw material prices continue to fluctuate. I mean, it's difficult to say or forecast anything. So even if we look at last quarter, some commodities prices declined while others were going up. So for example, copper prices, they have declined in some time, but CRGO steel has been going up or the transformer oil has increased a lot. So it's not a one way for all the commodities.
Sir, the next question is, what is our capacity right now? What capacity you're working at right now would be, right?
For transformers?
Generally, capacity utilization would be what, like, transformer or others?
Plant capacity?
Capacity utilization of the plant.
Yes. So that has been -- I can say in the last -- last quarter, it has been about, I think, 85% to 90% -- 85%.
Okay. And my last question, we price our products into euros, right, and then to the dollars. So are we benefiting by the euro becoming weaker to the dollar?
No, we don't -- our products are mostly sold in India. So those orders are all in INR.
No, no, imports which are there.
Yes. Okay. So imports -- obviously, yes imports are in euro or USD, depending on the country. So what was your question on it?
Means do we benefit from the euro weakening? And that's what my question, so.
Yes. See, that's what I said, when I presented the -- I was answering, I think, Manish's question, we have a ForEx gain in the last quarter. So that depending on the fluctuation in some quarters, you will see again some quarter we have loss. While we hedge also the ForEx to some extent, but some thing not always in your control.
[Operator Instructions] The next question is from the line of Harshit Kapadia from Elara Securities.
Just wanted to check with you on the semiconductor shortage. So now there has the issue been now getting lower, or you still face the issue in semiconductor shortages? And secondly, any color you can give on the recent announcement of the revamped distribution scheme, do you think that scheme is going to benefit Schneider Electric at large and you will see Power and Grid growth, which you mentioned, 6% to 7% can move to double digit?
Take the later half of the question. The first part, Mayank can take. The later half of the question is more towards Power and Grid. You would appreciate that the Power and Grid segment is quite a large segment in India and 6% to 7% growth, especially driven by modernization of segment, presents a very good growth opportunity. And we will definitely benefit from the scheme that you are talking about, which is more around digitization and cutting losses in the segment.
Sorry, your -- I mean, the line was not clear. What was your first part? It was around, I think, semiconductors, right?
Yes. Do you still face the semiconductor shortage issues?
Yes, it continues. So the supply is limited and not exactly as per the demand.
Do you anticipate any impact on revenue in the coming quarters? Or right now, you have sufficient inventory at your backlog, so there should not be much impact?
No, see the impact is there. And I mean if we get semiconductor electronics completely as per our demand, definitely, revenues can be better. But the impact is there.
As there are no further questions from the participants, I now hand the conference over to Mr. Harshit Kapadia for closing comments. Mr. Kapadia, you may go ahead.
Sorry. So we would like to thank the management of Schneider Electric Infrastructure management for giving us an opportunity to host this call. We also thank all investors and analysts for joining for this call. Any closing remarks, Sanjay, sir, you would want to give the investors.
I'd like to thank all of you for your continued support and for joining this call and listening to us. Have a good day, please. Thank you.
Thank you. On behalf of Elara Securities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.