Schneider Electric Infrastructure Ltd

NSE:SCHNEIDER

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to Schneider Electric Infrastructure Limited Q2 FY '25 Earnings Conference Call 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 Private Limited. Thank you, and over to you, sir.

[Harshit Kapadia, analyst]

Thank you, Steve. Good morning, everyone. On behalf of Elara Securities, we welcome you all for the Q2 FY '25 in H1 FY '25 conference call of Schneider Electric Infrastructure Limited. I take this opportunity to welcome the management of Schneider Electric Infrastructure represented by Mr. Udai Singh, Managing Director and CEO; Mr. Suparna Bhattacharyya, Chief Financial Officer; and Mr. Mohit Agarwal, Head of Investor Relations. We will begin the call with a brief overview by management, followed by the Q&A session.

I'll now hand over the call to Mr. Singh for his opening remarks. Over to you, sir.

[Udai Singh, executive]

Thank you so much and a very warm morning to all of you. And I think I was just remembering that this is one of those calls which we have set early in the morning, and thank you so much for joining us and hearing us out. Myself, Udai, my colleagues Suparna and Mohit will try to tell you as to what we have been doing. I'm sure you have been -- you have read what we have actually had shared a few days ago on this. And I would now like to take you on that.

Coming to Phase 3. Just a sweet reminder of what your company is on a mission, the vision, which is going to be the leading the new display in energy world and offering our customers and partner the most innovative connected products and solutions, which would be ready for the 10 emerging and elevated expectations in power distribution. And we do this by our balanced business model, superior quality and efficient supply chain, which will keep our growth profitable and reliant and sustainable. And we have this vision with the mission to be a digital partner for sustainability and efficiency for all our stakeholders. And we strongly believe life is won everywhere for everyone at every moment.

I would like you to pay some attention to Page 4, and this summarizes very rightfully as to what we have been going through. We again strongly believe that we need to drive a sustainable future, and this can happen by three things coming together, one, essentially is electrification, driving this automation through a large streak of digitalization. Now these three things put together, which are at the core, will help us to drive and have a sustainable future going forward.

Just wanted to also tell you as to what are the mega trends which are emerging and which actually are being seen by all of us. And these are global trends, and these are also -- India is no different than that. We are also experiencing the same in our country also.

One, there is a huge demand, which is being pushed by digitalization and artificial intelligence. Second, we know what's been happening in climate change. We are no different. We are not the one who are away from this. We are experiencing right from north to south, east to west of India. Last 3, 4 years have been very acute, and we have started realizing that this is not something which is a non-India thing. This is very much an India thing, which is going to happen. And we need to think about this in our attempt to say that future of the coming generation.

Third is energy transition. Energy transition is again, a very, very important element because we are trying to drive -- entire India has been part of net revision. We are trying to see as to how do we get it. And the best thing would be which government also, as you know, I was thinking is trying to come out or change or give up total base of fossil derived energy. Therefore, this is going to happen. And if you leave fossil what is left is electricity and that is something perhaps which will drive the future of your business.

Evolution is well very, very important. I think this -- India stands at a very sweet spot here. The population, the average age of the general youth, the urbanization, the demand generation because of it, the supply to cater to this demand is all actually is being done -- is being seen or being witnessed by this evolution of wealth which we have been witnessing in area, perhaps more than -- or more than any other country, I would say.

The new global equilibrium, I would not like to speak about this. You know the geopolitical situations. The government of India, I would say, restrictions on prior countries sharing land borders, what's been happening between Russia and other things, I do not want to say, but this is something which is emerging where India is being seen as one of the major hubs, which can supply not only to outside but as well as by supplying and catering to the domestic needs within India.

Now what we are trying to do here, if you really ask me are 5 things again. We are trying to see as to how do we quickly organize ourselves with speed in terms of addressing well this evolving trend that you see because what stays today doesn't stay after 2 years. So the success would be how do we quickly adapt so that we can leverage the evolving situation.

Two, is how do we give, as I mentioned, if you recall our vision, how can we reevaluate the lead in partnering our customers and its partners in terms of driving sustainability in their own setups. How do we capture the emerging segments and while continuing our leadership in the existing segments scales priority 3. What we are also trying to see is we are not -- we are attempting and we are trying very hard to be seen rightfully that we partner a customer not only during CapEx citing, but we are there with the customer, we really partner them right across the life cycle of the product, which we call it from the time when it actually is supplied until the time it actually has lived a slide 20, 25 years.

What can we do as part of SEIL so that customer sees a deep, deep engagement right across the cycle of the product. And of course, India is evolving, as you all know, how do we saturate our presence, makes us more visible by establishing and making a robust partner network so that we are there in each and every corner of India.

Now if you really see what this all put together is if you work on these trends, you work on these priorities which we have, coupled with strong governance and business ethics, building local competencies, doing the right allocation of capital in terms of making new things and leveraging opportunities in new energy landscape, which is evolving. I'm sure this company of yours will be in a position with better returns.

I am very happy to actually take you to Page 6, which talks about few of our successes, which we have seen. The first one, which is on the left, which is for oil and gas segment. This is one of those government in India companies where we have supplied full stack of Schneider there, including transformers, GIS revamping.

And I just wanted to call you, these are 3 separate orders which has come from a nonprivate enterprise to us where the confidence in us actually is being seen and is being witnessed in this. And what we have done here is given transformers and equipment, which are fully sensorized. And also, it has got other elements which actually are purely digital, which actually will enable to run the asset, which is either a new one or if you can see the one which is retrofitted, better visibility, better control, better insights and maintenance.

If you go on the right side, again, is a prominent steel industry where we have actually supplied this. This is by far, again, I would say, the first time where remote rec and rec out order has been given and it has been executed.

Now I just wanted to take some time on this because this is the first time we have done this. And this goes mile in terms of ensuring operator safety while maintaining the site. And this is a concept which we have sort of launched in India in its own different way. And this is going to be the future of maintenance, as I see today an emerging maintenance world of electrical equipment.

I would like to again take you to Page #7, where you see in the mobility segment, where we have actually been able to do, the left side is, again, one of the metro segment where we have supplied the state-of-the-art, high-end controllers and control systems, which are required to be to make this Mark rapid glass port system do very well. And incidentally, this happens to be Southeast Asia country where we have supplied here and they were actually very keen in buying something which is from India because India is perceived to be a technology hub where we can actually manufacture and supply higher equipment in volumes.

Another one, which is on the right side is for one of the automobile manufacturer where we have supplied this in state of Gujarat. What is also what worthy to note, again, here, if you see, as you would notice, these are all sensorized and which has been sold with the subscription package, what we call as EcoCare. If you remember, a couple of quarters ago, and when we launched this, we told about what is EcoCare. And this is actually catching up. Customers are now seeing some merit in terms of subscribing to it. And with coming times, I would see EcoCare to ramp up, and this is one of the testimony which we have seen in the automobile industry in [indiscernible].

If I want to take it to Page #8, which are essentially the left side is our bread and butter, which is far in this segment. And this is, if you ask me, is something which was acquired in East. Just wanted to give you another piece here. It was for one of the states on DISCOMS who wanted to modernize their infrastructure and we're sort of delayed in this. And they came to us saying that we have delayed this. Can you support us in terms of actually supplying it early so that we can capitalize and roll it out. And we said, yes, of course, we are here for you. And this is something which was done much before time, much before the anticipated short cycle of customer, which actually went on for we getting us a different level of appreciation from the state on this call.

On the right, again, is something which is a testimony of our penetration in data centers, which I said, if you'll call the mega trend AI evolution. This utilization is driving this. And this is, this is one, another case, which we have added to further which is transformer supplies with EcoCare again 10 AMC. And this is one of the largest radar centers, which are going to be coming up in India.

Now I would like to take you to Page 9, we can defer. This is the last piece you would remember what our priorities are. This is something which we are trying to do by creating larger set of partners, by enhancing portfolio of partners which are already existing. And these 2 cases, if you see are, again, is proof of this thing. The left one is where we have actually supplying in Gujarat. We are supplying lots and lots of RMUs under various packages of Gujarat to latest partners. And on the right, is something which we have done, which is essentially a large volume order being supplied for a renewable solar farm in north. And this is something which is really, I would say -- I would see this is a very wonderful step because this particular [indiscernible] which we have developed rightfully caters and it's more than [indiscernible] to what power generation. So power generation farms in India required. So this is one of the first orders which we have got to an established partner being supplied to a known named solar developer in India.

I would like to take something which is on Page 10, which is very relevant important. I would like to -- they technical, sorry about this. But just wanted to tell you as to how your company is extremely progressive in terms of digitalization.

You see what we have realized and is a known fact there's about 40% of fire, which takes place and electrical equipment is because of partial discharge. What we have done here is a sense where we have put partial discharge sensors in the equipment, which you can see on the left. I don't want to take a lot of on this. But the basic idea is that we have now centers, which are partial [indiscernible] centers, which rightfully plan has come out and flag and give a signal if there's any partial discharge happening inside the [indiscernible], which means that this eliminates any possibility of the equipment seeing a partial discharge and therefore, awarding any partial discharge-led shutdowns.

Now what are the benefits? Benefits of course, is the customer sees that the plant is maintained, is more efficient. So better, more environment friendly, more sustainable. Of course, give insights so that the customer may not do the regular maintenance, they come back when the maintenance required, therefore, securing and ensuring the maintenance costs going down. And of course, it is more safer, more reliable.

I would come to my life slide, after which, I will hand over to Suparna because I'm sure you must be having very keen interest in looking at the numbers, but just wanted to take some time on Page 11, which is again something which is very different, very unique for the company, which is a mix of augmented reality, virtual reality and mixed reality.

The idea behind this is if you try to visualize, it is like we are creating a model by which the customer or the operator or somebody who is a supervisor would be in a position to point a cap in front of the equipment, and each and everything which is required to be maintained by the operator actually shows of our [indiscernible].

The basic idea is we are armoring our operator set of people who may or may not be skilled at times at various sites in the right way of doing things so that there are no mishaps. The rectification, the time getting to putting back the equipment in service is defined asserted. So there the shutdowns are limited.

And not only this, this also helps for training. We can buy virtue of this, we can perhaps imagine you are sitting in a room in say, a city like Delhi or Bombay, and he want to train a set of people. You can recall this standard, which is there at some parent slide and can demonstrate to the set of people who are sitting along with you in terms of how they give them looks like and which button if you press it does what they how does it operate and things like this.

So this is really, if you ask me is something which is extremely unique, which is being evolved and developed just taking one thing which is very core to us, which is customer at the center. We are trying to develop things and trying to promote solutions and offers which are around customer benefit which is something which customers see as a value coming from your company, which is something which will help us to maintain and have a very proper and long-lasting engagement with customers in the entire life cycle of the job.

I will stop here, and I role to, I give it to my colleague, Suparna, who will take you on the financial performance of the company in the last quarter and in the last half year. Over to you, Suparna. Thank you.

[Suparna Bhattacharyya, executive]

Thank you. The business and operations were explained with, along with the philosophy of the company. So I'm pleased to now share the results and happy to share that your company has been seeing consistent double-digit growth in both sales and other. Our PBT has rose by, risen by 67% and PAT by 32% Y-o-Y for H1 period.

Come to the numbers. Our orders are INR 1,104 crores, which is 17.5% over and above last year. Basically, the -- we can see that the growth momentum in orders is strong. Our transactional and the Transformers business has grown significantly in terms of getting orders.

Sales at INR 1,193 crores, we are up by 20.3% over corresponding period of last year. So we have leveraged the strong backlog that we had. And of course, this is mainly a project-based business or execution is the key. We've had a very robust execution strategy at our energy.

Gross margin on the material margin is at INR 472 crores. up by 30.1%. EBIT at INR 155 crores, up by 47.4%. PAT at INR 103 crores, up by 32.1%, and we have a strong order backlog for the remaining part of the year and some also moving to next year, which is INR 1,389 crores.

What are the strategic levers that we had for this first half of the year? We accelerated segment. As Udai spoke about, is that we are leveraging the emerging segments, which are happening in the country. And of course, strengthen the resilient segments, which are [indiscernible].

More services focus on the modernization, digital services and remote asset moderating. So this goes as part of our core revenue, mainly. And Udai also mentioned of promoting partners to execute our orders to gain and also execute on others.

Going now to the next slide, which is Page 14. The other, as we mentioned, we see INR 1,104 crores, which is 17.5% over last year, which was at INR 99 crores. And Q2 stand-alone performance has been 16.3% higher than last year at INR 572 crores. So momentum in orders across all segments and order backlog, we've already talked about. Order backlog is practically up by 14.3%.

Going to Page #15, our sales. H1 sales have seen a 20.3% growth we closed H1 sales at INR 1,093 crores, over and above INR 991 crores for the corresponding period last year H1. And the quarter saw a 1% growth, we closed the books at INR 600 crores over INR 496 crores of last year. Against strong sales growth in this transactional and services that gives us also a good margin.

Talking of the P&L statement of H1, we are at Page #16. Sales growth by 20.3% at INR 1,192.6 crores. This has given us a material margin or a gross margin at 39.5%, which was 3 points over and above corresponding period of last year, and this has come from the better efficiency, better pricing, better productivity in the raw material.

Our employee costs have risen by 10.6% and this is mainly covering the inflation. The other expenses have risen by 38.8%. This has a component of the sales growth expenses like whatever we take as a percentage of sales growth and the other coming from the increase in CSR expenses because we've been profitable for the last 3 years as compared to the corresponding period of last year, where it had one, the first, which was in [indiscernible], our mandated CSR expense budget has increased. Over and above that, we have some customer support and risk coverage expenses, so that we are able to cover the risk by making some provisions to take care of the interest of your company.

So that gives us an EBITDA of INR 167.4 crores, which is up by 2.3 points over and above last year and a good absolute value growth of 44.2%.

Now let me come to the finance cost. Finance cost is more or less stable.

And then we come to the PBT. PBT again sees a great increase over corresponding period of last year. We were INR 77.8 crores. Against, which we did INR 129.8 crores, we are 3 points over and above last year in terms of percentage. And in terms of absolute value increase, we are at a good 66.9% growth. Having said that, at the PAT level, we are at 32.1% increase in absolute value and 8 points increase.

You all may be aware I'm sure that last year, we were not -- the corresponding period of last year did not have a tax impact, which this period has, and thanks to that, profits that have been generated by your company.

So overall, our margin has expanded due to better product mix, the pricing volume leverage of operational efficiency and also, most importantly, the in-time orders and the sales execution, which is a complete focus on our side at every point of time.

Going to Page #17, which has the Q2 numbers. Q2, the sales has increased by 21% at INR 599.7 crores. Material costs are at INR 376 crores, and this has given us a gross margin of 38.8%, again, this is higher by 2.4 points over corresponding period of last year.

And the other expenses, yes, I agree it's a little skewed this quarter, but it is a very judicious reason why we have some number of files with respect to, of course, those expenses which are coming directly as a percentage of sales as well as some specific provisions in CSR expenses that we have done. Depreciation, not much changed. Finance cost almost stable.

And coming to the PAT, we are at INR 54.3 crores, which is 26.7% higher than last year in terms of absolute Y-o-Y value and as we are at 0.4 points over and above the percentage.

Just to give a reason for why the deferred tax number has come. So we have reversed deferred tax liability of INR 5.8 crores in this quarter on account of the recent amendments in the taxation of long-term capital gains. So this is, as you are all aware, that the tax on long-term capital gains has reduced from 20% to 12.5% and the indexation benefit which has been removed. So this is the impact of the change in the taxation calculation. And well, at the PAT level, we are higher in terms of the absolute value. So thank you for all your support, and it's all from my side, and now we are open for questions.

[Operator]

[Operator Instructions] The first question is from the line of Raj from DCPL.

[Raj Rishi, analyst]

This change of regime in U.S., do you expect any change in business prospects for Schneider given the take on climate, et cetera, by the new regime?

[Udai Singh, executive]

Yes, Mr. Raj, thank you for asking this. See, what's been happening in India, which I see myself personally for last about 3 years or so. There is a lot of growing tangible sensitivity around being more sustainable in our operations, which is both in the industry and other stakeholders are looking for.

If you ask me as a matter of fact, they are now you know that BRS is something which has been mandated. And there is a growing, I would say, sense, which is emerging around how can we be more efficient, sustainable in our operations, and India offers a very, very landscape if you really ask me. There are a lot of industries which got established when this was a at all. And now people are getting sensitive around this as to how do we electrify the processes which we -- and when I state this, this can go to any sort of industry. This can go to metal industry. This can go to any fertilizer industry in terms of how do we save on footprint? And this, of course, and I'm pretty certain that is going to be [indiscernible] for country like ours.

[Raj Rishi, analyst]

Okay. And in the previous con call, I asked you about like the estimate is that trillions of dollars would be required for meeting certain targets, et cetera. And it's right at the center of that particular aspect. So any comments on like where do you stand and especially the listed entity like you have a lot of entities, Schneider has a lot of entities in India. So is there any duplication of business conflict of interest between the listed entity and some unlisted entity of Schneider. These are the two questions.

[Udai Singh, executive]

So Raji, I'll take the second question first, there is no conflict of interest between various operational entities in India of Schneider. And number two, if you ask me, as to what is the budget, which people might take for being more sustainable, this -- is -- I would not be in a position to answer you because you see what's been saying is there are people who are taking today is a resolution phase, I would say. People are trying to tie out pilot, trying to gauge the basic concept of sustainability is, first and foremost, you should be sensitive -- I mean sensitive about this. Draw as to where do you stand regardless where we are today, format a road map as to where we want to be and then try to drive it, make it happen and finally to sustain it.

Now our Ps typically comes when you have already drawn up your road map, where you really need to see as to how much investment is required, which I would -- at this point in time, for a national average point of view, I will not be able to say. But what I can only add here is, they are people who -- they are most of their stakeholders, most of the industry, most of the relevant people are trying to see as to how much they can do in their own ways to drive this in their perspective set of operations. But the number point of view, I will not be able to throw up and share any numbers with you because I'm not aware about this at this moment of time.

[Raj Rishi, analyst]

And sir, in the, like the and something, government took out some testing lab regulation change. Any comments on how it will affect Schneider?

[Udai Singh, executive]

I do not know which specific one you're talking about, but you're talking about test if that is the one which actually, it will actually give -- it will have a positive impact if you were asking about that one, not only for Schneider, but the entire set of people who actually are operating industry. So it is more the government is trying to get -- or rather there is a draft that's what we are referring to, where how do we -- what should be the period of the validity of ties on certain equipment.

[Operator]

[Operator Instructions] The next question is from the line of Mohit Kumar from ICICI Securities.

[Mohit Kumar, analyst]

The first quarter how to approach a client for Schneider to [indiscernible] so many products in, for example, let's say, data center, right? He needs a host of products, and we, as a VP provide certain product and then they are cooling products, and then there are some other low voltage products. So how does Schneider approach the client, how does the sale happens? How do you collaborate with the entity of Schneider?

[Udai Singh, executive]

Thanks, Mr. Mohit, and thank you for asking this question. You are absolutely right. And that is what we also believe that we should give a full Schneider portfolio to more the experience by the customer.

Now absolutely, on the [indiscernible], which we are saying if someone you have one who actually had to budget the center.[indiscernible], we would have approached you and would have told you as to what is going on with the power system distribution along with cooling equipment, arise from the time when you receive a from the grid at say 132kV, putting a summer and going up to the right end, which is you are absolutely right on the LV distribution piece, fully engineered, fully optimized and fully leaded with over so that the maintenance part, the energy consumption part is very well taken. So if you ask me, is the transformer is the main receiving equipment, if you come to data center building, you talk about the power distribution, you talk about chiller, you talk about HVAC, you talk about other hands, you talk about [indiscernible], you talk about [indiscernible] switch boards and you can, so it's a full comprehensive solution, which is along with it, you talk about BMS system, you talk about UPS, you talk about everything.

So Schneider as a group actually can offer multi -- many multi-solutions and offers which actually can cater to a data center developer hyperscalers. So that's what we do.

[Mohit Kumar, analyst]

Understood. My second question is on the, I see a lot of old rigs may mean we have one in this quarter. Is this related to the way the RBS has RBFS reform development scheme of the government of India is panning out? And are you very optimistic that these kind of orders will only increase give it in the next 12, 18 months?

[Udai Singh, executive]

I'm sorry, Mr. Mohit. I was not sure for to make...

[Mohit Kumar, analyst]

Let me just repeat the reform development scheme of the Government of India for the discount is being rolled out, right, as you speak? Are you seeing the high inquiry from the discounts or, let's say, EPC partners for those your products?

[Udai Singh, executive]

Yes. In fact, that stays at the ministry and Mr. Mohit of our business. Now some of the major drivers is this RDS scheme, perhaps which you are referring to, which talks about INR 300,000 crore lakhs of investment in India. And that certainly gives us impetus to people like us. And where the play of, if you recall, the scheme is essentially around two things. One is how do we strengthen the already existing network? How do you augment the network -- and when I say augmentation, it also means how do you distilize the network so that it becomes more efficient. And eventually, the fee losses, which are standing at 15.4%, goes down to about 12 at the India level. Now this certainly does. The question is, does it give us extra amount of business or continued business? The answer is yes.

Now what it typically also depends a good state is investing, which is sort of, I would say, affected by the political situation of the state. And at times, there is a deferment of certain projects or certain elements, which do happen. But overall, if you really ask me the answer to your question, yes, this scheme helps us out.

[Operator]

The next question is from the line of Aditya Deorah from Divisha Investments.

[Aditya Deorah, analyst]

Sir, in our variance commentary was mentioned that the energy part of the business for India grew double digit, while the Industrial Automation was down year-on-year for the India unit. So is it similar for us? Or is there a variance for our operations?

[Udai Singh, executive]

Aditya, thank you. And it is quite similar. The industrial automation may be slightly different and it is a bit low, I would say, because off, because when such announcement is done or things are declared, it is declared for the entire automation -- industrial automation space.

Now this company of yours typically do what is around the substation automation. We are not into discrete selling of automation components. For us, it is business as usual. It hasn't [indiscernible]. It hasn't changed from the normal energy management perspective. But I think the statement which you are referring to, it comes from a larger domain, which encompasses everything and all aspects of industrial automation, even including discrete component supply of industrial automation products. But for this company, it is virtually the same the normal one, which happens.

[Aditya Deorah, analyst]

Okay. And sir, for the last few years, if we see the sales CAGR that we are doing, it's around 20%. So my query comments with respect to the Kolkata factory. So would we see a leg up in the sales growth once the fact you've established? Or should we model the 20% CAGR that we are seeing or we have been seeing for the last 3 years going ahead?

[Udai Singh, executive]

Aditya, I'm very positive about it, but I'm not in a portion to give you some insight as to how the future numbers will go to look like. Kolkata is going to have a positive impact on us, but how will it impact the rate of 20%, not in an actual situation to tell you as of now.

[Aditya Deorah, analyst]

Perfect. Sir, just one our parents would have its India Investor Day, I'm sure you know about it on December 1 or the first week of [indiscernible]. If you can accommodate some of the India analysts or investors, it would be great. And if it's not possible, then at least the text that you would be sharing with the global investors if it could be shared with the Indian investors, it would be great on your part.

[Udai Singh, executive]

Noted. We'll do that.

[Operator]

[Operator Instructions] The next question is from the line of Nimish [ Sunna ] from Elara Capital.

[Unknown Analyst]

Congratulations on a good set of numbers. Sir, just continuing off the last part of spend question on the Kolkata factory, could you let us know the status of the factory. Is it on track to be commissioned? I think it's said by April the next year. So is that on track?

[Udai Singh, executive]

First of all, thank you, and second is almost on track, actually coming up sometime around the first quarter of next year. That will happen. And it will perhaps start maybe in the last quarter of this year, and we will sort of conclude the other installation of other furnaces by Q1 next year. That's the plan, so overall on track.

[Unknown Analyst]

Okay, fine. That's great to know. And my second question is, sir, I just wanted to understand, like we have been adding some channel partners recently instead of directly taking orders from DexCom. So I just know how is the split in H1 in terms of channel partners' contribution versus the direct order contribution, if you could just highlight something on that?

[Udai Singh, executive]

I think we may get back to you. Suparna has this fine detail. But otherwise, it actually typically is -- see, there are two ways to measure it, Mr. [indiscernible]. One way is how many assets are we supplying through channel versus how many assets do we supply direct. That is one way of looking at it, which is the most important and relevant way instead of getting into the volume in rupees crores.

Now because finally, your company is actually trying to see as to how do we penetrate and saturate this market with our products. And therefore, we have decided -- and there is a very, I would say, back-end work which goes in terms of identifying and swapping, which will be served to release typically ask me the number in this half year, I may not be have to be correct. So under control of Suparna, it would be typically I would say maybe 2 is to 1, 2 in favor of license partner. That's what we have done in H1 in terms of number of assets.

[Operator]

[Operator Instructions] The next is from [indiscernible] Jupiter Financial.

[Unknown Analyst]

Yes. And all the best for the recalculation for the good numbers Sir, my question is, how do you see the business environment going forward from here? What's your sense on the industry?

[Udai Singh, executive]

First of all, thank you for having stated in us. We see India is the right point in time at the right cusp if you ask me. It's actually -- they are -- the business and the segments which were there since last about 7, 10 years, they continue to be there. What we additionally, see is the new emerging landscape.

Now this new energy landscape will hit us maybe in coming years, may not be exactly the way we feel they will come, but plus/minus 1 or 2 years here and there, it will certainly come, and these are multiple. These are solar, the EV, the storage, the data centers, these are the elements which were nonexistent if you really ask in 2015, '17. But now what existed in '15 '17, '18, '19 around COVID, that stays and we are seeing this additional revenues, which actually will drive India's future.

Now what I, what is very difficult to ask is whether the EV will happen, by the time it has been projected so 20%, 30%, 30% penetration. The answer, I don't know. But what I certainly know if not in [indiscernible] will happen in [indiscernible]. Businesses high level is good. India is bullish. We are bullish. We are trying to see as to how do we leverage these evolving business opportunities by the right solutions by driving the right thought leadership talking about what is good for India with customers and other state is something which is very relevant. So we are doing two things we ask Mr. [indiscernible], one, trying to adapt ourselves, trying to see as to how can we really be there on the right time for those customers who are exploring these new technologies.

Second, we are also trying to help advocate these new technologies with the right policymakers who are trying to derive right policy charter in India for these emerging landscapes. So these are the two things which we are trying to do. I do not know whether I've answered you Mr. [indiscernible], but this is our India on high level growth.

[Unknown Analyst]

Sir, my second question is does Schneider has a play in the battery storage. Schneider neither as a play on the battery storage in India?

[Udai Singh, executive]

Yes, we do have. We do have. Battery storage is a complex affair, as Mr. Raj, you may know. We have solutions, which we call as behind the meter and in front of the meter. And we are developing. Battery story is not great.

What we are trying to be is talking about what different approves we bring to battery story. That is something which we have discussing we are talking about, and we are sort of -- we are going to have a decent play in that in times.

[Unknown Analyst]

And sir, my last question is on the breakup of sales and order book, which is from Suparna.

[Udai Singh, executive]

Yes.

[Suparna Bhattacharyya, executive]

Yes, please.

[Unknown Analyst]

Yes, ma'am, can you give me a breakup of your order book and sales?

[Suparna Bhattacharyya, executive]

In terms of [indiscernible]?

[Unknown Analyst]

And integral orders.

[Suparna Bhattacharyya, executive]

And also...

[Unknown Analyst]

[indiscernible] in terms of orders.

[Suparna Bhattacharyya, executive]

So we have to for system is at 70%, transaction, 19%, services, 11% and group company is 21%.

[Unknown Analyst]

This order book breakup for the sales breakup?

[Suparna Bhattacharyya, executive]

It is the sales breakup.

[Unknown Analyst]

Okay. And the order book buildup would be...

[Suparna Bhattacharyya, executive]

Okay. So the order intake is, equipment is at 47%, projects at 13%, transaction 23% and services 17%.

[Unknown Analyst]

And inter group?

[Suparna Bhattacharyya, executive]

Inter group, we do not capture orders as such, but it is -- the indicated number is close to INR 125 crores.

[Operator]

The next question is from the line of Rohit Maheshwari from Tata AIG.

[Unknown Analyst]

Congratulations for a good set of numbers. Sir, my first question is, can you give some sense from the first half of the total order, how much will be from the private versus public? And because of H1 FY -- H1 F'25, that was election year. So like do you see the H2 better than H1 like in terms of order pipeline?

[Udai Singh, executive]

Thank you for asking this. I would not have a rider split, but typically, we 5% here and there at the moment. And just one thing I wanted to call out because our being a project business we come into play essentially a few days, a few months then the [indiscernible] what I so the jobs that you see through largest. So the process is standard by government. Many talks about 35%, 40%, but in where I say and used by government is won by a contractor, and then contractor places he designs. He actually engineer the solution, which is acquired as for the government requirement. And then it comes to us and then we supply.

So if you hear something happening, probably by the time it comes on our table, it's maybe about 9 months to 15 months away. That's one. Two, is always better. H2 is always better historically for any company, and we are no different. Because there's a lot of impedes on actually capitalizing it, there's a reason why people and the users or the buyers or the [indiscernible] trying to expedite their time line so that they receive the equipment in March. And that's the reason why so typically, we have always seen achieve better that one. And I'm seeing that this year will perhaps be no different, we'll be somewhat doing something similar.

[Unknown Analyst]

When I, when we see that, for an example, quarter 3 FY '25, like is a good, robust quarter for government ordering, for us, it should be reflected in quarter 4. So if my understanding is correct, so this is a right way to understand?

[Udai Singh, executive]

Not because there is no such [indiscernible]. We can't have it into formula in trying to give you. But very typically, this, any quarter is somewhat similar in behavior. It gets impacted a bit by some things happening at, I would say, political level. But otherwise, typically, it follows the same cyclical order as any quarter as in the previous years. So when you ask me that if Q3 is what the time people will say that the Q4 will drive this, it will be very difficult to predict, Mr. [indiscernible] as of now.

[Unknown Analyst]

Okay. So secondly, can you sense like on insomnia data center requires close to like between INR 50 crores to INR 60-odd crores for 1 [indiscernible] megawatt. What will be the TAM for us in that INR 60, INR 70 crore type of [indiscernible] cost for us?

[Udai Singh, executive]

What would be what, Mr. Rohit?

[Unknown Analyst]

Yes, currently, in India, if you see cost for setting up 1 megawatt is close to 60 to like it's between INR 50 crores to INR 70 crores, so I just want to understand that what is our sided addressable TAM in that INR 60 crores to INR 70 crores?

[Udai Singh, executive]

Rohit, I wish I had that calculator, but as of now, see, it is, again, I cannot have a straight answer. I'll try to explain you in 1 minute. When you see this data center requires three things. One is the land itself, second power and water.

Now it really depends as to how the distribution is, what is the incoming power level at which the feeder is being taken. How they are distributing it, whether they are going to keep 11kV distribution, 1KV distribution within the data center building. So typically, it actually is a combination of all. Their clients as our number per megawatt of industrial load is actually -- is a bit different. Depends on what configuration the hyperscaler is trying to put up the data center at. But -- and it's varying because if I tell you to this one, I would be actually wrong because, it really depends on a specific configuration. So it's very difficult to give you a ballpark number in terms of how much business potential where a data center throw up per megawatt of IT load, very difficult. So -- but what I'm saying is with all the hyperscalers, with all the colo-developers, we actually are we are connected. We are supplying various equipments from discounting. So I mean data center does offer a very positive thing going forward for us.

[Unknown Analyst]

So just one last question, if I can ask is, can you get -- because to get a sales, can we get like what is the order bidding or order pipeline as of now stands so that we can get a sense that what type -- how is the -- how can the growth materialize over the next in next 6, 8 months or 1, like maybe 1, 2 years. So can you give that sense?

[Udai Singh, executive]

We are positive, Mr. Rohit. We are trying to build up the right order book. When I say it right, we are trying to see as to which are the projects which are sort of, which are beneficial to the company. We are exploring and entering into that area.

The good part is that we do see lot of projects in the country, which allows us to bid a bit choosy, I would say. And we are picking up -- and my sense is that this journey of growth is sustainable for companies like us, and we are counting on the evolving India and the type of investment, which [indiscernible] sees 5 to 30 years from now. So it actually is like this.

[Suparna Bhattacharyya, executive]

Yes. Perhaps to add and give you confidence on how we are in terms line opportunities. One good indicator for the quarter backlog. But I mentioned that we are at INR 1,389 crores, we are up by more than [indiscernible] compared to order booking tracking actually gives us the confidence of 2/3 future[indiscernible] , et cetera. So, that is one thing which you can [indiscernible] them all.

[Operator]

The next question is from the line of Manish Goyal from Thinqwise Wealth Managers.

[Manish Goyal, analyst]

Congratulations on very good numbers on both P&L and balance sheet, and it was quite commendable to see very strong cash flow generation in the quarter end and cash position improving significantly. A special congratulations to Suparna.

I just want to know like probably, is there anything specific which would have led to something cash flow or -- and can we expect it to be sustainable going forward? That was my first question.

My second question is on, if you can give us a perspective how is exports doing for what is the outlook? And what is the current revenue share, if you can provide some perspective, are we probably looking at some of the products? Definitely once that you make actually comes up, definitely, that will help. But beyond that, how is exports doing for us and what are the prospects?

And my third question is on capacity utilization for our core products, transformers and [indiscernible] and are we also looking at increasing capacities in these products? And what is the CapEx plan?

And my -- sorry, my fourth question is on revenue as the order inflow breakup. So that services intake seems to be quite strong at ranging between 17% to 19% for the last [ 2 ] quarter, but somehow, probably the revenue share continues to be 11% to 13%. So if you can help me provide perspective on that as well.

[Suparna Bhattacharyya, executive]

Okay. I think part of your 4 questions. estate to add on that. So for export, we have been out -- of our total sales, we have been 14% of that approximately contribute -- come from the exports.

Regarding the better cash flow, there has been a lot of focus in terms of having better margin, better payment terms for the last, say, 1 year as we are evolving to improve our cash position.

A lot of impacts on getting on-time collections. If the collections are leading delayed, we are practically camping at customer sites to get those collections, and inventory management has been better. Payables have management have been better. So all put together and not forgetting the cash which is coming from the good profitability that we have. So all these things are contributing for a better cash flow that I hope that suffices your answer. With respect to maybe capacity utilization, Udai, you can comment on also on the services side?

[Udai Singh, executive]

Yes. Manish, because we are almost at top of our impact, we have exceeded by 2 minutes. And we are ramping up our capacity as we see our needs going forward in the plants, number one.

Number two, the services piece is cyclic and the focus stays on services for the business because that is where we differentiate ourselves in terms of giving a value-add services to our clients. In a quarter here and there, it doesn't matter. But overall, our objective and alignment is to drive more and more services piece duly propelled by a new offer, which we have launched, which is EcoCare, I'm sure Mr. Manish you may be aware.

[Manish Goyal, analyst]

Yes, yes.

[Udai Singh, executive]

Of these two things, and if there are days, I think perhaps we will connect with you later, my submission is that maybe perhaps we across the time, so we might perhaps likely come.

[Manish Goyal, analyst]

I just want to clarify the revenue breakup provided by energy was for the quarter or half 1.

[Suparna Bhattacharyya, executive]

I'm sorry, can you please repeat your question?

[Manish Goyal, analyst]

No. And I think that revenue breakup what you provide is 17%, 19% and 11%. Was it for quarter 2? Or was it for first half now?

[Suparna Bhattacharyya, executive]

It is for quarter 2.

[Operator]

Thank you. I now hand the conference over to Mr. Harshit Kapadia.

[Harshit Kapadia, analyst]

Thank you for management for making us to host this call. We also like to thank all investors, analysts this would like to [indiscernible].

[Udai Singh, executive]

I would like to thank you for joining us for having confidence in the management. Just wanted to assure that we are trying to drive a right time with the right offers, right teams and thanks for joining. And next time, maybe another about 90 days away, and a lot of activities, a very happy new year and very happy Christmas going forward to all of you and your families. Thank you so much.

[Suparna Bhattacharyya, executive]

And thanks to Harshit. [indiscernible]

[Harshit Kapadia, analyst]

Thank you.

[Operator]

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