Schneider Electric hits over 6-year high, surges 12% in a weak market

Shares of Schneider Electric Infrastructure hit an over six-year high at Rs 187, as the stock rallied 12 per cent on the BSE in Friday’s intra-day trade backed by heavy volumes, in an otherwise weak market.

The stock of heavy electrical equipment company traded at its highest level since August 2015. In the past one month, the stock has zoomed 53 per cent, as compared to 0.87 per cent decline in the S&P BSE Sensex.

At 10:34 am, the stock traded 10 per cent higher, as against 0.96 per cent fall in the benchmark index. The average trading volumes at the counter more-than-doubled with a combined 8.04 million shares changing hands on the NSE and BSE.

Schneider Electric is engaged in the business of manufacturing, designing, building and servicing technologically advanced products and systems for electricity distribution including products such as distribution transformers, medium voltage switchgears, medium and low voltage protection relays and electricity distribution and automation equipment.

For April-June quarter of financial year 2022-23 (Q1FY23), Schneider Electric reported profit after tax of Rs 26.4 crore, against a loss of Rs 16.10 crore in Q1FY22. Ebitda margin improved 810 bps to 7.9 per cent. Sales during the quarter grew 28.9 per cent to Rs 371.5 crore from Rs 288.20 crore in a year ago quarter. During the quarter, the company’s orders increased by 27.5 per cent to Rs 368 crore, driven by cloud & service providers & mining, minerals & metal segments.

With a number of reforms being introduced in the Power & Grid sector, the company expects it to remain resilient. This, along with the focus on renewable energy, privatisation, and efforts to cut losses in the T&D sector, are favourable indicators for the Company.

Going forward, the management believes an overall positive outlook for the segments that drive the growth of the company. The power sector in India continues to remain one of the government’s primary focus areas, as an increasing number of reforms involving digitalisation are expected to be implemented in the next few years.

In the transportation sector, the development of the metro lines across India, the modernisation of the railways, and focus on building more and better airports indicate that these are up for expansion in the near future. Oil and gas is also expected to undergo a period of transition as the case for renewables becomes undeniably stronger, the company said.