Schneider Electric Infrastructure Limited (NSE:SCHNEIDER) Q1 FY23 Earnings Concall dated Aug. 03, 2022
Corporate Participants:
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Mayank Holani — Chief Financial Officer
Analysts:
Harshit Kapadia — Elara Securities — Analyst
Aditya — Private Investor — Analyst
Anurag Patil — Roha Asset Managers — Analyst
Viraj Mithani — Jupiter Financial — Analyst
Kaustav Bubna — BMSPL Capital — Analyst
Aditya Deorah — Divisha Investments — Analyst
Nikhil Jain — Galaxy International — Analyst
Manish Goyal — Private Investor — Analyst
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q1 FY ’23 Earnings Conference Call of Schneider Electric Infrastructure Limited, hosted by Elara Securities Private Limited. [Operator Instructions]
I now hand the conference over to Mr. Harshit Kapadia from Elara Securities. Thank you, and over to you, sir.
Harshit Kapadia — Elara Securities — Analyst
Thank you, Margaret. Good evening to everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY ’23 conference call of Schneider Electric Infrastructure Limited.
I take this opportunity to welcome the management of Schneider Electric Infrastructure, represented by Mr. Sanjay Sudhakaran, Managing Director; Mr. Mayank Holani, Chief Financial Officer; and Mr. Vineet Jain, Head, Investor Relations. We will begin the call with a brief overview by the management, followed by a Q&A session.
I’ll now hand over the call to Mr. Sudhakaran for his opening remarks. Over to you, sir.
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
This is Sanjay Sudhakaran. I’m the Managing Director of Schneider Electric Infrastructure Limited. I welcome all of you — a very good afternoon to all of you, and I welcome all of you to this earnings call, please.
So, without much ado, I’ll go straight to the presentation. If we go to the Slide number 3, which is Page number 3, we will briefly talk about the economic outlook of the country. As you can see that the GDP forecast for the country has been slightly brought down from the earlier bullish outlook that we had. This is primarily due to: there are concerns regarding the global situation; inflation in certain countries are very high; there is fear of economic recession; the Feds cutting — increasing rates, etc.; and also a feeling of reduced consumption in the rural economy in India.
However, I would say that the demand pattern continues to look strong in terms of our segments, which we will talk a little bit later. So, we assume that these concerns around the global situation, etc., would fairly leave India untouched at least for a few quarters from — till now. That’s what our expectation is, but it’s a very dynamic situation out there in the globe, and it is very hard to predict the situation as we go forward. So, we treat these parameters, etc., with a certain amount of caution, and we plan our investments and our way forward accordingly.
Moving on to the next slide. A little bit overview on the key segments that we operate in.
The power and grid sector continues to show strong promise, despite the challenges here, the privatization, which is not going as fast as the government assumed it to be, but there is significant amount of money that is being pumped in for digitization and modernization of the network. So, we continue to piggy bank on this particular activity. Also, there is a major thrust towards renewables. There’s a firm commitment by the Government of India to change the energy mix of the country by 2030 and by 2070. So, I think there will be continued investments in solar, and we are also planning our product introductions, etc., in line with this trend that we see. Of course, there is a great push for Make in India. We have a factory, and we have the technology available to localize products and keep adapting products as we go forward.
On the mining, minerals, and metals, I think it has been a strong two years, but we see some consolidation signs happening in the market as far as cement is concerned, and all over, you would have also heard about some large scale exits. There will be some conservatism as far as capex is concerned in the segment going forward and perhaps we would need to brace for that as well. But there is a huge push for sustainability solutions in this particular segment, especially given the nature of the business that it is in. So, there are sustainability projects which are being launched by these corporations and we will definitely benefit from this trend.
On the mobility side, which is primarily transportation, automobiles, EV charging, EV equipment, etc., I think there are very positive signs of infrastructure build up across the country both in terms of road, metros, EV charging facilities, etc., and we are well poised to be a very strong player in this segment as well.
The data center segment, continues to be strong. We see more and more players coming into India and there is a huge buildup of data centers happening in India. And these are also sort of electro intensive and we see that these macro trends will benefit the country as we go forward and the Company as well.
Going on to the next page, which is Page number 5. I think the entire story around Schneider and its push towards sustainability is to make sure that more and more products that we have are digitized, connected, connectable, sensorized, etc., to make sure that we leverage big data across these products and be able to optimize solutions for the customers move from more of a reactive maintenance to more of predictive maintenance and use apps and analytics to be able to succeed in this particular segment, and we have a basket of softwares, which are primarily Schneider softwares, which we can leverage to be able to be part of this journey and we are preparing our equipment also to be in line with this journey.
So, going on to some of the wins that we have. On the digital wins, we see that there is a very good project which we are doing for a large cement company on the waste heat recovery. As I told you, there are sustainability trends in cement industry, which cannot be ignored. And there will be capex flowing into this particular segment to make sure that the segment is more sustainable as we go forward. And we have a good play with our equipments, as well as digitization offers to be able to succeed in this particular area.
Going on to Slide number 7. Here is another repeat order from a defense facility for one of the submarines, which was equipped by Schneider panels. There is a large pull through. This is a second order of a large magnitude which is come to us in the previous quarter and we continue our story on services here positively.
Going on to Slide 8. Some of the emerging segments that we spoke about, wins in the EV charging segment. It’s still nascent to begin with, but it’s a strategic area and we are focusing here to make sure that we enable our entire suite of products, connected products, as well as the various softwares, and micro grids to be able to succeed in this particular segment. We have prepared ourselves with a small team, which is working on the conceptualization and the follow-through for this particular segment.
With this, I hand over to Mayank Holani, who is the CFO of the Company, to give you a little bit on the financial update. Over to you, Mayank.
Mayank Holani — Chief Financial Officer
Thanks, Sanjay, and good afternoon, ladies and gentlemen.
So, our slide [Technical Issues] orders intake for the quarter stood at INR3,680 million for the quarter, which is up by about 27.5% over last year same quarter. And in this growth is mainly driven by cloud and service providers and mining, mineral and metal segments. And as a result of this good order growth, it has helped us in improving the backlog by about 8% versus the March ’22 quarter. So, in last three months, we have built up additional backlog of about 8%.
Sales for the quarter grew about 28.9% at INR3,715 million. In terms of segments, it was a mixed bag, some positive, some negative and — but it has been a good quarter.
We remain cautious in terms of order booking with respect to the terms and conditions, payment, timelines and all to ensure that our margins and cash is secured and we don’t risk on that.
Further on, we will move on to the next slide to give you an overview on P&L. Slide number 11, please. Okay. So, sales, as we discussed, this additional sales and with the improvement in mix, we have been able to improve our gross margins by about 2.2% versus previous year same quarter. And our net profit for the quarter stands at INR138 million — before exceptional item INR138 million versus a loss of INR161 million in previous year. So, that’s a delta of about 9.3 points. And exceptional item, which you see here, is a kind of the loan adjustment — fair value adjustment as well based on the extension of loan which we have done, which was already existing loan, so that’s a notional gain recorded in accounting. So, the net profit after tax is about INR264 million versus INR161 million loss in previous year.
This quarter was also impacted by raw material inflation. And while we continue to pass on to the — impact to the customers as and where possible, so partial impact is going to customers, partial is impacting the P&L. But I can say we have been managing it pretty well in the circumstances which are there, considering the price hike, raw material shortages and the hedging, etc.
With this, I will close here, and leave the floor open for Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Aditya, an Individual Investor. Please go ahead.
Aditya — Private Investor — Analyst
Yeah, hi, good afternoon. I’m Aditya. My question here is, what is the current backlog at Q1 ’22?
Mayank Holani — Chief Financial Officer
So, our backlog as of end of June ’22 is INR10,079 million or about INR1,008 crores versus INR9,332 million at the end of March ’22.
Aditya — Private Investor — Analyst
So backlog has increased?
Mayank Holani — Chief Financial Officer
Yes, about 8% increase versus March.
Aditya — Private Investor — Analyst
And how are you placed in terms of supply chain now?
Mayank Holani — Chief Financial Officer
See, supply chain situation remains challenging. So, electronics are still not normalized. Then due to the Ukraine conflict, there have been challenges on a couple of other commodities also like some specialized steel and all. So, we can’t say that it’s normal.
Aditya — Private Investor — Analyst
Okay. Got it. Thank you.
Mayank Holani — Chief Financial Officer
Thank you.
Operator
Thank you. The next question is from the line of Anurag Patil from Roha Asset Managers. Please go ahead.
Anurag Patil — Roha Asset Managers — Analyst
Thank you for the opportunity. Sir, if you can briefly touch upon all the four segments, how do you see the order inflows panning out in the next couple of quarters? That would be helpful.
Mayank Holani — Chief Financial Officer
You mean the mix?
Anurag Patil — Roha Asset Managers — Analyst
No, sir. How is the situation means order inflow, whether you’re expecting stronger inflow in any of these segments, particularly in the mining and metals, are you expecting any slowdown due to metal price correction, etc.? That would be great.
Mayank Holani — Chief Financial Officer
Sanjay, you want to address this?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Yes. So, we did touch upon this topic briefly. It is not because of the softening of pricing that we see that — see, India has requirement for infrastructure. So basically, the strong drivers for growth is infrastructure demand, right? So — but we see that there has been good amount of capex formation in — and investments into the cement sector in the past few quarters. So, we might see a little bit of slowdown if the infrastructure growth does not keep pace. So that’s the kind of outlook that we have. It’s too early to say for sure.
Anurag Patil — Roha Asset Managers — Analyst
Particularly, sir, on the metal side, are you expecting any delays or postponement of capex? Because some of the large cap goods companies are kind of witnessing such kind of delays.
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
See, if you say metals, metals has been kind of — there has not been a lot of fresh investments into metals in the past few quarters, if you really see. So, we don’t see a material change.
Anurag Patil — Roha Asset Managers — Analyst
Okay. Thank you. And sir, next question is on the gross margin side. So, do you think these kind of gross margins are sustainable going forward? Or any color on how the raw material prices are panning out for us? Are you witnessing any correction?
Mayank Holani — Chief Financial Officer
See, this is even — obviously, this margin, which you see in current quarter, is a bit higher than the average for last couple of years also probably because of the mix, right, so this is obviously a little bit higher margin than the mix. But yes, in this already, there is an impact of raw material inflation factor. So, if debt normalizes, then we should see a better margin. But our continuous focus is on improving the mix. So, the margin improvement comes from the — one is the pricing, but it’s always a competitive market. But we continue to focus also on improving the mix which helps the P&L.
Anurag Patil — Roha Asset Managers — Analyst
Okay, sir. Thank you very much. I will come back in the queue.
Mayank Holani — Chief Financial Officer
Thank you.
Operator
[Operator Instructions] The next question is from the line of Viraj Mithani from Jupiter Financial. Please go ahead.
Viraj Mithani — Jupiter Financial — Analyst
Yes. Good evening, and congratulations on outstanding numbers. Can you give me the break — what is our order book size and breakup segment-wise?
Mayank Holani — Chief Financial Officer
So, order book size at the end of June, as I mentioned earlier, is about INR1,008 crore.
Viraj Mithani — Jupiter Financial — Analyst
Okay. And can you give the breakup of the segment?
Mayank Holani — Chief Financial Officer
Breakup of this segment is about — systems, 64%; transaction, 22%; services, 14%.
Viraj Mithani — Jupiter Financial — Analyst
Okay. So, next question is, we talked about in the presentation defense and other, what kind of way we do have in defense? Can you give more color on that, like the submarines, which you mentioned?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
If you would say it is because of the installed base in the submarines that we are getting the pull-through revenue. So, the concept that we are trying to tell you is that we are focusing not just on the capex businesses, we are focusing on the lifecycle revenue that our capex can generate over, say, 15, 20 years of time. So, one of the levers is spare parts. The other lever is software and analytics. And the attachment that it brings to your services revenue and through analytics, the pull-through parts that you can generate.
Viraj Mithani — Jupiter Financial — Analyst
So, it would be broadly a service-based revenue, right? It’s fair to assume that, right?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Yes, broadly service-based revenue. You’re correct.
Viraj Mithani — Jupiter Financial — Analyst
Okay. And this is on the submarines supplied by the France or something like that or only submarine in defense?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
This was a submarine that was supplied outside the country, fitted outside in the country. But however, since it’s in India and the responsibility for the services is with us, we are continuing our relationship with the customer.
Viraj Mithani — Jupiter Financial — Analyst
What would be the order size? Like if you can give me some color, I mean, what is the scope of this business?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Actually, without customer permission, we are not allowed to divulge financial details into public domain. That is the reason why we are not giving you the number, but it is pretty substantial.
Viraj Mithani — Jupiter Financial — Analyst
All right. And sir, in your presentation, you talked about software. Are you referring to EcoStruxure by any chance in the software?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Yes. EcoStruxure, as you know, has different domains, okay. EcoStruxure is not just one product. EcoStruxure is the generic brand name, but EcoStruxure has a different products for power and grid, different products for transportation. Some of the elements could be common, some of the elements could be different. So, there are a number of suites within the EcoStruxure.
Viraj Mithani — Jupiter Financial — Analyst
And sir, how will this revenue pan out in terms of services or how? Like, I understand we take from the parent, and we pay something to the parent, right, for the software services, right?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Yes. We buy the product. So, it’s a license basically, right? It’s a license that you buy from the parent, okay? And then you sell it to your customers, okay? So, there are two kinds of softwares that are available; one that are hosted on the cloud and one that is hosted on the edge. What I mean by edge is on-prem. On the premises of customer, with — the customer uses without any help from our side. There the pull-through revenue happens in terms of the upgrades that you are able to bring to the table. For example, if you have new enabled features, etc., you are — you can sell an upgrade to the customer, so that is the services revenue that comes about. There are certain softwares which are on the cloud, which provide analytics. So, here is an opportunity for us to partner along with the customer and be part of his journey, to be able to provide him insights on what he needs to do better on the maintenance side, what is going to fail tomorrow that he should replace today, to prevent a downtime. So, these are value-added services that you can sell.
Viraj Mithani — Jupiter Financial — Analyst
Is it a transaction-based revenue, or it is a fixed price contract with that customer?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
No, it is not a transaction — it’s neither a transaction nor fixed price. There is a portion which will be fixed price, which is your consultancy services. And there is a portion which comes, which is on demand on what you will replace or what you will assist him with, which is based on offer to offer.
Viraj Mithani — Jupiter Financial — Analyst
And revenue which comes in is shared with the parent, right? So, both of us share the revenue, that is true, right? It is the right way to think about it, right?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
The services revenue and the analytics revenue, etc., are most of it in the country itself. It’s all within the country, within the business. It’s only the cost of the license that you need to pay them at the — when you are procuring the product.
Operator
Thank you. I would request Mr. Mithani to rejoin the queue for follow-up questions. The next question is from the line of Kaustav Bubna from BMSPL Capital. Please go ahead.
Kaustav Bubna — BMSPL Capital — Analyst
Yes. Hi, can you hear me?
Operator
Yes, we can hear you.
Kaustav Bubna — BMSPL Capital — Analyst
Great. So, on Page 5 of your presentation…
Operator
Before we proceed — I’m so sorry, sir, to interrupt you. Can you please come on the handset mode? I think you are on speaker. It’s not very clear.
Kaustav Bubna — BMSPL Capital — Analyst
Okay. Yes. Now, can you hear me?
Operator
Sir, please come on the handset mode and come closer.
Kaustav Bubna — BMSPL Capital — Analyst
Yes, you can hear me now, right?
Operator
Yes. Now it is clear. Please go ahead.
Kaustav Bubna — BMSPL Capital — Analyst
Perfect. Yes. Hi. So basically, on Page 5 of your presentation, you list out four segments, right, power and grid, mining, mobility, data centers. So, out of this INR370-odd crores of quarterly revenue that you’ve done, is there any way you could break up the split, the revenue split for these four segments? And also, where do you see these segments in terms of growth in the next three to five years? Which segment do you see growing faster than the other? Could you give some sort of color over there, please?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
So, we do not provide guidance by segment and a breakup to that detail, but I could give you a certain color on the overall market dynamics.
Kaustav Bubna — BMSPL Capital — Analyst
Okay. That will be good.
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Okay. So, if you see data centers, they would have a CAGR, which is in excess of around 12% to 13% even at a very pessimistic level of estimates, okay? And segment like power and grid would have something like a 6% to 7% CAGR because of its the base revenues itself being so higher. Whereas something like transportation would be somewhere around 8% to 9%, and cement and steel, etc., are in spurts, it’s very cyclical. So, over a — let’s say, over a three-year timeframe, it could be around 7% to 8% — 7%.
Kaustav Bubna — BMSPL Capital — Analyst
Okay. But what I’m basically trying to understand is how much of your total revenues is the cement and steel portion? Because that’s the cyclical part. So, is it fair to assume it’s less than 25%, 30%?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
It’s less than that, because if you really see the largest driver for this business has always been the power and grid segment. So, I would say that the dependence on cement and steel would not be in excess of 15% to 20%.
Kaustav Bubna — BMSPL Capital — Analyst
Okay. Great. Thank you so much.
Operator
Thank you. [Operator Instructions] The next question is from the line of Aditya Deorah from Divisha Investments. Please go ahead. Aditya Deorah, your line has been unmuted. Request you to please go ahead.
Aditya Deorah — Divisha Investments — Analyst
Yes, am I audible?
Operator
Yes, you are.
Aditya Deorah — Divisha Investments — Analyst
Yes. Good afternoon, sir. Sir, over last eight quarters, our performance has more or less turned around. So, sir, can we attribute a part of the performance to the L&T — to the acquisition of the L&T Electric and Automation business by the group? Are we seeing any synergies from that end?
Mayank Holani — Chief Financial Officer
So, the L&T business acquisition has taken place in other entity, right? Not in this entity. So, directly, there is no relation. So, that business is anyway largely in other product lines, right? They are not present in the product which we are dealing in this entity. But obviously, some synergies do come in, as you know, get to a bigger size as a group, but it’s not — can’t be said, okay, it’s due to the that acquisition by the group.
Aditya Deorah — Divisha Investments — Analyst
So, sir, what will you attribute the reason for the turnaround? For the last seven, eight years, we were not performing very well, but something has changed over the last eight, 10 quarters inside the Company.
Mayank Holani — Chief Financial Officer
See, it was — I mean, the actions are continuing and it has been a slow and steady progress. So, if you see the last year, but in between, also, I would say, a year was wasted due to the COVID also, right? The COVID wave came in, then obviously, we saw a drop in revenue in the financial year ’19, ’20. But then obviously, our focus has always been on improving the terms and conditions, picking up the right orders, and securing cash, because a big problem has been in this business earlier, if you have been tracking, on the sales or the bad debts, right, the collections which we are losing and had to provide for in the P&L.
And then, we have been working on the operational efficiencies as well, rightsizing the organization and restructuring wherever required as for the market conditions. So, that has started showing result. And then the volume, obviously, plays a role. But we need to also keep in mind that in the last one, one and half years, it has been quite turbulent in terms of raw material inflation and all. And this performance is really the kind of, I would say, well in the sense that managing the inflation and then delivering a profitable result is a big part, because your contracts are on fixed prices, right? They are not — the most majority — large majority is on fixed price. So that way, it has been good. And had it been a normal year, it could have been even better.
Aditya Deorah — Divisha Investments — Analyst
Sir, in answering to a query of one of the previous participants, you were mentioning that we should not see just how much revenue are we — or how much profit margin are we making from one particular project, we should see lifecycle revenue. So sir, incrementally, year-on-year, do we see — I mean, here on, do we see the services and the spare part improving in our revenue — in our total revenue as a percentage of our group revenue?
Mayank Holani — Chief Financial Officer
If you have been tracking, services share in our mix has been improving over last many years, not just in two years. So, slowly and gradually, services share has been improving. But obviously, it’s not a drastic change that certainly, it will become, say, from 10% to 15% or 15% to 20%. Because this industry is like that where people don’t take too much of service contracts unlike some other industries. But gradually, the service share has been improving year-after-year.
Aditya Deorah — Divisha Investments — Analyst
So, the services revenue is at a higher margin, right, as compared to the initial products that which we supplied?
Mayank Holani — Chief Financial Officer
Absolutely, yes. Services, obviously, comes at a higher margin.
Aditya Deorah — Divisha Investments — Analyst
Sir, coming to your presentation, on Page 8, you have mentioned about emerging segments, our wins, some EV charging infrastructure work. [Technical Issues]. Can you just elaborate what we have done or what you plan to do in this particular segment?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
What’s going to happen is that we are going to move away from a centralized generation and distribution of energy to more of a distributed generation and a prosumer effect, where a consumer of electricity will also be a producer of electricity. So, you could see many charging stations, etc., where you would have a mix of power usage, which is more — which is a mix of what you take from the grid, which is your conventional energy, and some of its own solar generation as well. And then you would have the EV charging associated with this.
So, all this presents a very solid opportunity for electrification, A; B, digitization, because of the fact that when you’re using mixed sources of energy, you will not be able to manage the grid very efficiently without softwares; and C, because of the sheer scale at which EV will grow in the country, this will require a very large amount of focus in terms of infrastructure development. So, all this presents a very good opportunity for electrification and digitization, which is our core focus areas.
Aditya Deorah — Divisha Investments — Analyst
Sir, have we got any orders in this particular segment as of now?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
So right now, I would not like to talk about the wins. It’s a little bit premature. So, we will share more details with you as we go forward.
Aditya Deorah — Divisha Investments — Analyst
Okay. Thank you, sir.
Operator
Thank you. The next question is from the line of Nikhil Jain from Galaxy International. Please go ahead.
Nikhil Jain — Galaxy International — Analyst
I just wanted to actually check that the order book that we have of around INR1,000-odd crores, so what is the timeframe in which it is to be executed?
Mayank Holani — Chief Financial Officer
See typically, depending on the — for different products, the timeframe ranges between three months to 10 months, eight to 10 months. Typically, based on the product type, and some one-off contracts may have even longer period.
Nikhil Jain — Galaxy International — Analyst
Right. So, for simplicity’s sake, can we take, let’s say, around six to seven months on an average, some projects higher, some projects lower?
Mayank Holani — Chief Financial Officer
Yes.
Nikhil Jain — Galaxy International — Analyst
All right. Okay. And second thing is that once we take an order and especially in the longer-dated orders, so is there a clause for raw material escalation, or is it like kind of fixed?
Mayank Holani — Chief Financial Officer
See, we obviously want to have a price variation clause in each and every contract and we push for that. But — sorry, it depends on the customer conditions and how the competition is also going. But largely, contracts are fixed price.
Nikhil Jain — Galaxy International — Analyst
Largely, contracts are fixed price, okay. So, if the raw material prices fall, then whatever — if that gives us a benefit, we can retain that and vice-versa. So, if they rise, then whatever hit we have to take on the EBITDA margin, we take that, right, more or less?
Mayank Holani — Chief Financial Officer
Yes. But it will be a kind of mix because what happens if you are doing hedging, so if prices fall, you get a loss from the hedging. And then, also you don’t see an immediate result, right? Because if you — I’m ordering today, I’ve been getting material after two months, three months. And it’s a mixed bag, right? Still some commodities are going up, some are coming down. But yes largely, on the long run, if — it will get — it should not be negative.
Nikhil Jain — Galaxy International — Analyst
Okay. The next question I just wanted to ask was that you were referring in the opening remarks that there are some new products that you are kind of introducing. So, is it like possible to give some color on what are the kind of products and which area or segments you are doing that?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
It will be on the solar piece, where we would be introducing certain products to be more able to cater to that segment and the growth in that particular segment. We also see a very strong growth on the ring main units, etc., given the infrastructure growth in the country. So, we’ll be introducing some products around those areas as well. And we’ll be happy to share with you the progress as we go forward.
Nikhil Jain — Galaxy International — Analyst
Sure. Okay. And one final question, and that I actually wanted to get not a guidance, but basically some kind of a qualitative view from yourself. On — let’s say, what’s the kind of, let’s say, revenue growth, let’s say, we look forward to, let’s say, over a period of, let’s say, two to three years, right? So, are we saying it is possible or it may be possible to grow by 10%, 12%, or we will aspire, not possible, actually, aspire to grow by this much, aspire to grow by that much?
And also on the EBITDA margin. So what would be the kind of EBITDA margin that you actually aspire to get to? Because it has been very variable, right, from 0% to let’s say, 7% in some quarters to 12%, 13% also. So, I just am trying to understand what may be kind of, let’s say, modeling perspective, what can be the reasonable EBITDA margin which management would actually be looking to get to?
Mayank Holani — Chief Financial Officer
See, generally, we don’t provide any guidance in terms of future revenue or margin. But just would like to give one comment because here the quarter we are comparing last year, Q1 was an exceptional one, which was effected by the COVID second wave, right? So that has also impacted the quarter. But as far as guidance is concerned, we don’t provide any guidance for future.
Nikhil Jain — Galaxy International — Analyst
Right. I understand that. I appreciate. So — but the only point that I was looking for is, let’s say, in this business that we are doing, actually, right, so, what’s the kind of — some kind of aspirational margin that we have, right, which we are looking for, whether 10% is good enough for us, you are targeting 15%, or we will look at 8% is good enough for us? So, something like that is what I’m just trying to get a hang on. Like no guidance per se, not on a quarter-on-quarter or year-on-year basis, but at least a direction in which…
Mayank Holani — Chief Financial Officer
I won’t comment on that, but I would only say that, okay, we will adversely not be looking at the margin from a quarterly perspective or — because quarter-on-quarter sometimes this is the project business, so the numbers may fluctuate, right, the volumes may fluctuate and that directly affect margins.
Nikhil Jain — Galaxy International — Analyst
Okay. Fair enough. Thank you. I’ll join back the queue.
Operator
Thank you. [Operator Instructions] The next question is from the line of Manish Goyal, an Individual Investor. Please go ahead.
Manish Goyal — Private Investor — Analyst
Yes, sure. Thank you so much. I would like to just get more perspective on the revenue mix change, what we have mentioned which has led to improvement in gross margins and EBITDA margins. And also what we see that other expenses have actually declined Y-o-Y despite strong topline growth. So, I just want — if you can probably give more perspective as to how sustainable it is? And maybe if you can share the revenue breakup on systems, equipments and transactional products, that will be helpful.
Mayank Holani — Chief Financial Officer
Yes. So, Manish, the revenue breakup for the quarter, if you see, this quarter has been system, 69%; transaction, 21%; and services, 10%. While if you look at last year’s same quarter, it was 75% for system; 17% for transaction; and 8% for services. So, about 4% increase in transaction and 2% in services. So, that is the mix change which I was mentioning. And also there was — within equipment also, there was a one product line, there was a some decline, product which was giving a lower margin, that also helped improving the margin decline.
Now, on the second part of your question, if you see other expense, it’s mainly the savings coming from — saving for the old debts recovering, which has reduced expenses. So, old debt recovery and the forex gain. So, these are two items which have reduced. Otherwise, expenses, which are directly linked to volume, be it freight or travel last year, there was not much travel in this quarter because of COVID. So, travel has gone up. Freight has gone up. Trademark fees linked to volume, that has gone up. But the rent, as there were some savings, obviously, it’s a part of the continuous focus on cost savings, and then the old debts collection and forex are the major items which have negated all the impact of increasing costs. And overall, you see the lower other expenses.
Manish Goyal — Private Investor — Analyst
So, would it be possible to quantify how much recovery and forex gain we had in the quarter?
Mayank Holani — Chief Financial Officer
So that is about — if these two items you add together, it’s about INR75 million.
Manish Goyal — Private Investor — Analyst
Okay. And Mayank just maybe if you can probably get — so I just want to get a better perspective on this INR1,000 crore order book, what we had. So is it possible that the kind of gross margins what we have seen based on the current order book, we are more or less likely to remain near these levels?
Mayank Holani — Chief Financial Officer
So, we see our order booking margin as such has not changed drastically, so — on either sides. So, it will continue to be in the similar range.
Manish Goyal — Private Investor — Analyst
No, where I’m coming from is what improvement we have seen due to better revenue mix and, as mentioned in a presentation, on improvement in productivity, so, like, do we see this trend continuing going forward?
Mayank Holani — Chief Financial Officer
No. See, I think this mix change is, I mean, too wide. So, debt exactly, while we continue to focus on improving the mix and we’ve seen a gradual improvement in services mix and transaction, but exactly this kind of mix may not continue — it can keep fluctuating quarter-on-quarter.
Manish Goyal — Private Investor — Analyst
Okay. But broadly directionally, we see that our margins should be on improvement trajectory?
Mayank Holani — Chief Financial Officer
Yes. The last year anyway was an exceptional year in terms of raw material inflation also, right? Because margin is also derivative, which is something not in completely in your hands, when you have a fixed price contracts, right. So, debt should improve, which will benefit our margin.
Manish Goyal — Private Investor — Analyst
Can you give me the intergroup revenue number for the quarter and also for the last full year?
Mayank Holani — Chief Financial Officer
So, IG revenue is about 22%.
Manish Goyal — Private Investor — Analyst
For the quarter?
Mayank Holani — Chief Financial Officer
Yes, for the quarter.
Manish Goyal — Private Investor — Analyst
So, what would be the order inflow number for IG?
Mayank Holani — Chief Financial Officer
Order is — order number?
Manish Goyal — Private Investor — Analyst
Order inflow number? Or is it that the revenue number is similar to the order inflow in the IG category?
Mayank Holani — Chief Financial Officer
So order absolute number, if I tell you, for the quarter, it’s about INR780 million, INR78 crores for this quarter.
Manish Goyal — Private Investor — Analyst
Do you have number for last full year, FY ’22, what was the IG revenue?
Mayank Holani — Chief Financial Officer
Last full year, just give me a second.
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Last full year, order intake number or…
Mayank Holani — Chief Financial Officer
No. He’s asking for revenue number.
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
IG number is 23% [Phonetic].
Mayank Holani — Chief Financial Officer
So, it was 23%, Manish.
Manish Goyal — Private Investor — Analyst
Okay. Thanks, sir. Thank you so much for all the answers.
Mayank Holani — Chief Financial Officer
Thank you. Thanks.
Operator
Thank you. The next question is from the line of Suraj Nanda from ICICI Prudential Mutual Fund. Please go ahead.
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
Yes. Hi, sir. So I just wanted to understand like what in the mix, how much is projects and how much is products?
Mayank Holani — Chief Financial Officer
Sorry, can you repeat your question?
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
Yes. In the mix, how much is projects — how much of the revenue is coming from projects and how much is the products?
Mayank Holani — Chief Financial Officer
Okay. So, I think I mentioned earlier. So on sales, our transactions is 21%; services is 10%; projects, 11%; equipment, 36%; and IG, 22%, so which together we call it systems, 69%.
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
Okay. So, projects is only 11% is what you are saying?
Mayank Holani — Chief Financial Officer
Yes.
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
Okay. And sir, on the borrowing side, we see that the debt level is pretty high and a major part of it is through loan from the sister entity, I think, Schneider Electric — IT Infra, I think, something. So how are we planning to reduce the debt, and as a result, the interest component in the…
Mayank Holani — Chief Financial Officer
See, the debt, if you see from last year, I mean, in last financial year from March ’21 to March ’22, also if you had seen in the annual report and the financials, debt has improved, right, with the improved collection. So, the way is to improve the operational performance and to get profit and cash in hand, so that way only we can reduce the debt. I mean at this stage, we don’t have any other plan to reduce the debt.
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
And is the — has the payment scenario for you improved in terms of days?
Mayank Holani — Chief Financial Officer
Yes, it has improved in terms of days. And definitely because — and that’s what reflects in our cash flow also. If you had seen the last quarter call or last financial results for the full year, our cash flow from operations was about INR120 crore versus, I think, INR6 crore, INR7 crore in the previous year. So, there has been a significant improvement in the collections and the cash utilization last financial year and the same trend continues in this quarter as well.
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
Okay. And are there any capex plans for indigenization or anything? Or the entire cash flow generation will be used for maintenance capex and paying back of debt?
Mayank Holani — Chief Financial Officer
No. At this stage, nothing specific or major capex finalized or in plan.
Suraj Nanda — ICICI Prudential Mutual Fund — Analyst
Okay. Thank you, sir. Thanks a lot.
Operator
Thank you. The next question is from the line of Viraj Mithani from Jupiter Financial. Please go ahead.
Viraj Mithani — Jupiter Financial — Analyst
Yes. Thank you for the opportunity again, sir. My question is, have you stabilized in terms of raw material prices by now? Like, what’s your sense on the market? Are we seeing some stability coming there?
Mayank Holani — Chief Financial Officer
The raw material prices continue to fluctuate. I mean, it’s difficult to say or forecast anything. So even if we look at last quarter, some commodities prices declined while others were going up. So, for example, copper prices, they have declined in last sometime, but CRGO steel has been going up or the transformer oil has increased a lot. So, it’s not a one way for all the commodities.
Viraj Mithani — Jupiter Financial — Analyst
Sir, the next question is, what is our capacity right now? What capacity you’re working at right now?
Mayank Holani — Chief Financial Officer
For transformers?
Viraj Mithani — Jupiter Financial — Analyst
Generally, capacity utilization would be what, like, transformer, others, etc.?
Mayank Holani — Chief Financial Officer
Plant capacity?
Viraj Mithani — Jupiter Financial — Analyst
Capacity utilization of the plant?
Mayank Holani — Chief Financial Officer
Yes. So that has been — I can say in the last quarter, it has been about, I think, 85% to 90% — 85%.
Viraj Mithani — Jupiter Financial — Analyst
Okay. And my last question, we price our products into euros, right, and then to the dollars. So, are we benefiting by the euro becoming weaker to the dollar?
Mayank Holani — Chief Financial Officer
No, we don’t — our products are mostly sold in India. So those orders are all in INR.
Viraj Mithani — Jupiter Financial — Analyst
No, imports which are there…
Mayank Holani — Chief Financial Officer
Yes. Okay. So, imports obviously — yes imports are in euro or USD, depending on the country. So, what was your question on that?
Viraj Mithani — Jupiter Financial — Analyst
Do we benefit from the euro weakening, that’s what my question?
Mayank Holani — Chief Financial Officer
Yes. See, that’s what I was — when I presented the — I was answering, I think, Manish’s question, you must have seen we have forex gain in the last quarter. So that depending on the fluctuation in some quarters, you will see a gain, some quarter we have loss. While we hedge also the forex to some extent, but some thing not always in your control.
Viraj Mithani — Jupiter Financial — Analyst
Terrific. Okay, sir. Thank you, and all the best.
Mayank Holani — Chief Financial Officer
Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Harshit Kapadia from Elara Securities. Please go ahead.
Harshit Kapadia — Elara Securities — Analyst
Thanks for the opportunity, sir. Just wanted to check with you on the semiconductor shortage. So now the issue been now getting lower, or you still face the issue in semiconductor shortages?
And secondly, any color you can give on the recent announcement of the revamped distribution scheme? Do you think that scheme is going to benefit Schneider Electric at large and you will see power grid growth, which you mentioned 6% to 7%, can move to double digit?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
Take the later half of the question. The first part, Mayank can take. The later half of the question is more towards power and grid. You would appreciate that the power and grid segment is quite a large segment in India, and 6% to 7% growth, especially driven by modernization of segment, presents a very good growth opportunity. And we will definitely benefit from the scheme that you are talking about, which is more around digitization and cutting losses in the segment.
Mayank Holani — Chief Financial Officer
Sorry, I mean, the line was not clear. What was your first part? It was around, I think, semiconductors, right?
Harshit Kapadia — Elara Securities — Analyst
Yes. Do you still face the semiconductor shortage issues?
Mayank Holani — Chief Financial Officer
Yes, it continues. So, the supply is limited and not exactly as per the demand.
Harshit Kapadia — Elara Securities — Analyst
So, do you anticipate any impact on revenue in the coming quarters or right now you have sufficient inventory at your backlog, so there should not be much impact?
Mayank Holani — Chief Financial Officer
No, see the impact is there. I mean if we get semiconductor electronics completely as per our demand, definitely, revenues can be better, but the impact is there.
Harshit Kapadia — Elara Securities — Analyst
Okay. Fair enough. And all the best. Thank you.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Harshit Kapadia for closing comments. Mr. Kapadia, you may go ahead.
Harshit Kapadia — Elara Securities — Analyst
Sorry. So, we would like to thank the management of — Schneider Electric Infrastructure management for giving us an opportunity to host this call. We also thank all investors and analysts for joining for this call. Any closing remarks, Sanjay, sir, you would want to give the investors?
Sanjay Sudhakaran — Managing Director and Chief Executive Officer
I’d like to thank all of you for your continued support and for joining this call and listening to us. Have a good day, please. Thank you.
Operator
[Operator Closing Remarks]