Schneider Electric Infrastructure Limited: Navigating Growth in India's Infrastructure Boom

Schneider Electric Infrastructure Limited (SEIL) has presented a mixed but strategically strong performance for Q2 FY26 and H1 FY26. While the company reported robust order growth, sales execution experienced a temporary slowdown. For H1 FY26, SEIL's total sales stood at INR 1,281 crore, marking a 6.6% year-on-year growth. Q2 FY26 saw sales of INR 655 crore, growing by 7.5% year-on-year. The company's EBITDA for H1 FY26 was INR 162 crore, with a margin of 12.7%, while Q2 FY26 EBITDA was INR 88 crore, at a 13.6% margin. Profit After Tax (PAT) for H1 FY26 was INR 94 crore (7.4% margin) and for Q2 FY26 was INR 52 crore (8.0% margin). Despite the single-digit sales growth in recent quarters, the management remains optimistic about the underlying market opportunities and their strategic positioning.

SEIL's order book has been a significant highlight, demonstrating strong demand for its solutions. H1 FY26 orders surged by 28.0% year-on-year to INR 1,749 crore, and Q2 FY26 orders increased by 15.6% year-on-year to INR 838 crore. This robust order intake has resulted in an order backlog of INR 1,805 crore as of September 30, 2025, representing a 25.0% year-on-year increase. The company's revenue split for H1 FY26 shows System contributing 65%, Transactional 20%, and Services 15% of the total revenue. Exports accounted for 12% of the total H1 revenue, primarily within the System segment. This diversified revenue mix, with a growing emphasis on transactional and services business, has contributed to an improvement in gross margins, particularly in Q2 FY26.

Financial Summary (INR Crore)

Strategic Wins and Market Opportunities

SEIL's strategic wins across various segments underscore its capability to capture opportunities in India's evolving infrastructure landscape. In Power & Grid, the company secured a large order for substation modernization, highlighting its role in upgrading critical power infrastructure. The Cloud & Service Provider segment saw SEIL securing one of the largest data center orders, supplying essential power distribution and receiving equipment. In Mobility, the company reinforced its leadership by securing orders for loco breakers used in Vande Bharat trains. Furthermore, SEIL has made inroads into Renewables with premium cybersecurity orders and into Aerospace & Defence and Semiconductor sectors with state-of-the-art solutions.

The broader market outlook for SEIL is highly favorable. India's economy is projected to grow at 6.7% for FY26, supported by strong domestic demand and significant government and private capital expenditure. Initiatives like the Revamped Distribution Sector Scheme (RDSS) with an outlay of INR 3.04 lakh crore aim to reduce AT&C losses and strengthen distribution infrastructure, creating substantial opportunities for SEIL. The booming data center market, driven by increasing digitalization and investments from global tech giants like Amazon, Microsoft, and Google, presents a promising growth avenue. The renewables sector continues to expand, with India's installed solar capacity reaching 125 GW, and favorable policy changes like the GST reduction on renewable energy equipment. The mobility segment, with projects like UDAN and extensive metro line constructions, also offers significant growth potential.

Operational Efficiency and Future Outlook

While employee costs and other expenses saw an increase, management noted that the gross margin improvement in Q2 was a result of strategic focus on transactional and services business, coupled with productivity improvements. The company's finance cost showed a positive trend, benefiting from healthy cash reserves and reduced borrowing rates. SEIL is actively pursuing capacity expansions, including the commercial production of vacuum interrupters at its Kolkata facility and rolling out multiple lines across its Vadodara and Kolkata locations, which are expected to support future growth and meet market demand. Management acknowledged that execution delays were primarily due to the cyclical nature of project business and client readiness, rather than internal capacity constraints.

SEIL's commitment to sustainability is evident through its 'Golden Peacock Award for ESG – 2025' and its recognition as a 'Top 15 employer in India'. The company's vision to lead the new digitized energy world by offering innovative connected products and solutions, supported by balanced business models and an efficient supply chain, positions it for resilient and sustainable growth. The management's focus on accelerating order execution and leveraging India's infrastructure boom provides a confident outlook for the coming quarters.