Roadmap for future growth of Schneider Electric infrastructure: digitalization and renewable energy

Digital transformation is important for all businesses, from small to large. That message is heard loud and clear in almost every lecture, panel discussion, article or study on how businesses can remain competitive and relevant as the world becomes increasingly digital.

In recent years, the COVID-19 pandemic has increased the urgency of achieving digital transformation goals, causing many organizations to accelerate their transformation efforts.

So what is digital transformation? Digital transformation can generally be defined as the integration of digital technologies into all aspects of a business, resulting in fundamental changes in the way a company functions and delivers value to customers.

The company we’re going to look at today is a leader in digital transformation. Schneider Electric Infrastructure Limited is at the forefront of helping businesses embrace digital transformation.

With a diverse portfolio of products across sectors including energy management, automation solutions and sustainable infrastructure, the company is committed to helping its customers unlock the full potential of digital technologies.

Stocks have delivered tremendous returns in the past. The stock price has soared 344% over the past year. Over a three-year period, the stock has delivered massive multibagger returns of nearly 730%.

In this article, we will take a closer look at Schneider Electric Infrastructure Limited’s business model, examine its key segments and financial performance, and assess its future prospects in an ever-evolving digital environment.

Schneider Electric Infrastructure Company Overview

Schneider Electric Infrastructure It is part of the Schneider Electric Group (Group), a global company specializing in energy management and automation solutions. The Group started its operations in India in 1963 and has since become a leading supplier of energy management solutions, industrial automation technologies and software solutions.

SEIL offers a variety of products and services for a variety of categories including buildings, data centers, infrastructure and industrial. They specialize in energy efficiency and sustainability solutions, power distribution and automation, home automation, and critical power and cooling.

Schneider Electric Infrastructure Business Units

The company operates in four main areas: Power & Grid Sector, Mining, Metals & Minerals, Transport/Mobility, Industrial and Buildings.

Power and grid sector

The power and grid segment is prominent in the company’s portfolio. The continued demand for electricity driven by increased industrial and retail consumption provides an ideal platform for SEIL.

Additionally, the Indian government’s commitment to digitalization and transition to renewable energy sources offers significant potential for SEIL. The government aims to achieve the net-zero target by investing around 350 billion rupees in digitalization and renewable energy.

These changes will enable the company to provide electric infrastructure solutions and services. SEIL is also actively monitoring green hydrogen allocations with the goal of turning them into viable economic opportunities.

Mining, Metals & Minerals

Government infrastructure investments in projects such as subways, airports and steel unlock significant economic potential for Schneider Electric in the mining, metals and minerals industries.

This investment is expected to increase demand for cement and expand the industry’s production capacity. Additionally, steel production growth is expected to increase by 50% by 2030-31, creating additional growth prospects.

Schneider Electric’s innovative energy management technologies and expertise can help expand these industries by increasing efficiency, lowering costs and improving sustainability.

Our portfolio of products and services is tailored to the steel and cement sectors to help you achieve your goals.

Transportation/Mobility

The government is investing extensively in modernizing railways, metro networks and airports, with a record capital investment of ₹2.4 million in railways.

Schneider Electric is well positioned to capitalize on these developments by offering a wide range of solutions in this market segment.

industry and buildings

The company is dedicated to providing a diverse range of sophisticated automation and control solutions and services tailored to the industrial and construction sectors.

SEIL also plans to accelerate the digital transformation of buildings, infrastructure and industry, with cloud analytics playing a key role.

Cloud analytics solutions provide a centralized building management system that delivers proactive asset management and predictive maintenance with connected devices, helping organizations and the building sector move closer to achieving net zero goals.

Schneider Electric Infrastructure Finance

In FY 2023, SEIL saw significant growth in its revenue, surging 16% to reach ₹1,777.19 crore compared to ₹1,530.34 crore in FY 2022. After analyzing four years from FY2020 to FY2023, the company recorded a compound annual growth rate (CAGR) of 8.7%.

At the same time, there was a notable increase in net profit, which increased by 348% from ₹27.62 crore in fiscal 2022 to ₹123.62 crore in fiscal 2023. Revenue growth was primarily driven by the MMM and Oil & Gas segments. Gross profit margin improved by 2.7%, primarily due to improved sales mix and softening raw material prices.

Given the broad business opportunities discussed above and the Company’s strategic focus and expertise, management expects this margin growth to continue with the same or better momentum in the near to intermediate future. In FY23, SEIL maintained favorable financial metrics with return on equity (ROE) of 39.36% and return on equity (ROCE) of 18.39%.

Schneider Electric Infrastructure’s Future Plans

Future growth prospects look promising

Schneider Electric Infrastructure Limited’s management expressed confidence in the company’s future growth prospects. While the Indian government is focusing on infrastructure development, renewable energyWith the electrification of mobility, companies are well positioned to take advantage of new opportunities.

The interim budget announced a massive capital expenditure of INR 11.1 lakh crores, which is expected to provide a significant boost to the economy and drive demand for the company’s products and solutions.

Leveraging digitalization and sustainability products

Schneider Electric Infrastructure Limited aims to differentiate itself by providing digital and sustainable solutions to its customers. The company’s EcoStruxure platform, which encompasses connected products, data collection systems and software solutions, is designed to improve efficiency and sustainability for customers.

Additionally, the recently launched EcoCare subscription model provides condition monitoring, maintenance advisory and support services to help customers optimize asset performance and reduce downtime.

Strong order book position

The company reported a robust order book of INR 101 billion as of December 31, 2023. This represents a significant growth of 24-25% compared to order volumes at the end of the previous nine months.

A healthy order book highlights strong demand for our products and solutions, giving the company visibility and a comfortable pipeline to achieve deliverables in the coming months.

Focus on creating diverse business models and added value

Schneider Electric Infrastructure Limited’s balanced business model, covering power and grid, metals, minerals, mining, mobility, semiconductors, data centers and other industrial sectors, allows it to mitigate risks associated with circularity in specific sectors.

The company focuses on providing value-added solutions to its customers by not only providing equipment, but also providing services and support to ensure smooth operations and optimal asset utilization.

conclusion

Schneider Electric Infrastructure Limited has demonstrated remarkable growth and strong financial performance based on its diverse portfolio and expertise in digital transformation solutions. The company’s future prospects look promising as the Indian government is focusing on infrastructure development and sustainability initiatives.

What do you think about the company’s ability to continue to grow in an increasingly digital business environment?

Written by Nalin Surya

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