Buy Schneider Electric Infrastructure; target of Rs 365: LKP Research

LKP Research's research report on Schneider Electric Infrastructure

Schneider Electric Infrastructure Ltd (SEIL) witnessed a strong quarter continuing with its journey of consistent performance. It remained better than anticipated on all fronts with revenues/EBITDA and PAT growing at 33.3%/71%/29.4% including exceptional items in Q1FY23 while margins at 10% improving 220bps YoY on better product mix and normalizing RM cost. SEIL continued its momentum and remained in the positive territory for the seventh consecutive quarter with consistent profitable growth in last seven quarters. The order inflow during the quarter remained strong and notched up higher by 21.4%. Management indicated that there has been good momentum in orders across all segments including its emerging segments in Industry & Building, Cloud & service provider. The overall order backlog too improved and stands at ₹11.2bn providing healthy revenue visibility.

Outlook

Considering the FY23 performance we have tweaked our estimates up (margins) accordingly and remain positive ahead and expect the momentum to continue. Hence, we maintain BUY with a revised TP of ₹365.