Schneider Electric Infrastructure Limited (SCHNEIDER) Earnings Call Transcript & Summary

Ladies and gentlemen, good afternoon and welcome to Schneider Electric Infrastructure Limited Q1 FY '21 Earnings Call organized by Batlivala & Karani Securities India Pvt. Ltd. [Operator Instructions] I would now like to turn the conference over to Mr. Kunal Sheth. Thank you, and over to you, sir.

Yes. Thank you, Nevi. And I would like to welcome the management of Schneider Electric Infrastructure on the call, and we would like to thank them for giving us this opportunity. From the management, we have Mr. Bruno Dercle, Managing Director; Mr. Arnab Roy, Chief Financial Officer; and Mr. Vineet Jain, Head, Investor Relations. I would request the management to give us some opening remarks, post which we will open the floor for a Q&A. Over to you, sir.

Good afternoon, everybody. So I am Bruno Dercle, I am the Managing Director of Schneider Electric Infrastructure Limited. I am pleased to connect with you to share and update the progress of our company. Today, we'll present you a few slides on the market outlook. And since we are by phone, I will try to mention on which slide we need to be. So let's go to the presentation, and we slide -- we'll go straight to Slide #3 after the disclaimer. So I guess, Vineet, that everybody has a slide deck?

Yes, Bruno, they have. You can just mention the slide and continue.

Okay. So I was just doing a sanity check. So I am on Slide 3. We will do an overview of last year result to what is the result of our rebound project that I have communicated already several times on a quarterly basis and giving a hint about where we are going, looking forward, in terms of technology and markets. So then I will go to Slide #5 and on the overview. On Slide #5, we have not drastically changed our offer last year. So the right side of the screen is -- remains the same compared with the previous time. We have an activity, which is a mix of activity, some transaction on, some product base, some which are software on the other side of the map. We have services activity. The bulk of our activity is what we call equipment, so MV switchgear and component -- equipment. Some of them can be medium voltage switchgear or transformer. Some of them can be integrated into E-House and solution projects. So no drastic change compared with the previous communication on -- sorry, I'm receiving a message that I am using a different deck compared with the one I'm supposed to use. So just give me 1 second, I am catching up with you guys on the deck.

Bruno, we can start with the macroeconomic indicator. That was the first one, you could start speaking.

Can you repeat it because I cannot hear it. So my phone line is very weak as you can understand. Okay. Arnab, can you repeat?

Yes. I said, we can start with the macroeconomic indicator, that was the first one.

Yes, but I need to find the deck that -- who have sent me the deck for the shareholder in this presentation?

It is Vineet. In the meantime, I can start talking Bruno.

Okay. So now I get it.

Okay. You can start now. [Technical Difficulty]

Okay. So interrupt me again, in case we have -- you can't hear me again. So I start again and I hope that I am audible. So first of all, macroeconomics indicators, I am on Slide 3, again. But this time, it's a good slide. And I would like to have your attention on the left bottom corner, which are the most critical indicator, macroeconomic indicator, for our activity and our company. So you see the electricity growth has suffered a big dip in April and May. No surprise for that. This follows in fact the economic activity -- the industry activity of the country. We start to see recovery, but June figure was still negative in terms of economic electricity consumption. July figure starts to show some growth in some states and some degrowth in other states depending on -- in fact, the impact of the COVID-19 depending on the states. But... [Technical Difficulty]

Ladies and gentlemen, be online. Mr. Bruno will join the call shortly.

Did I got dropped out?

Yes, sir, you got disconnected from the call. One moment, we are connecting. Mr. Bruno, you can continue.

Okay. So I don't know exactly when I was disconnected, so I will repeat part of my sentence. The 2 main KPIs for us in terms of industry KPIs of macroeconomic are the bottom left one, manufacturing growth and electricity growth. This electricity because, of course, we are a power manufacturing company. And manufacturing because a lot of our sales are being done in segments, which are industrial segments and -- where we sell transformers and switchgears. So you can see the 2 indicator were heavily negative in quarter 2. You have the figure of April and May. The figure of June was recovering, but still not positive, still a negative trend on the 2, manufacturing and electricity indicators. So this gives the global macroeconomic environment. The other important KPI that we have -- that we are following is the one of the GDP of the nation. And as you know, the GDP of the nation is now expected to be negative during, at least, 2 quarters, if not 3 quarters, and this is the one that you see on the top right side of the screen. So difficult environment to cut it short in terms of microeconomic situation. We will go to the next slide on the market trend, and I will start with the segment on the top right corner. We have differentiated segments, depending -- trends depending on the different segments. You know that we are most present into the power and grid, what we call the utility and distribution company segment. This is what absorbed most of our -- half of our activity approximately. And then the other 2 segments, which are important to us are mobility, the transportation segment, airport and the metro to be the main contributor. And [indiscernible], oil and gas and MMM, mining, metal segments. We are positioned -- our 2 main segments are very resilient to the crisis, and you will see this when we communicate about the order intake. Power and grid distribution company and metro and airports have shown a very strong resistance and resilience in terms of order intake. The projects have been delayed. We will see this when we see the sales of the quarter that just finished. But in terms of order intake, these 2 segments are very resilient, and you will see this when we'll talk about the order and the figures. Contrarily, MMM segment is very negatively impacted, mining metal and we have the cement industry, we have the steel industry in this segment. It is extremely negatively impacted in the quarter that we just finished, both in terms of order intake and also in terms of sales in terms of deliveries. The projects have been delayed and we don't see a recovery before -- at least 2 quarters in this specific segment. Oil and gas is in the in-between situation. The refinery, the downstream part of oil and gas is keeping good momentum, even though projects are being delayed, but not that much. The projects are not canceled. And the upstream part of the oil and gas segment has almost completely vanished, okay? So we have the big disconnect between the upstream and the downstream. The refinery is still active in India as seen from the energy supplier position. The other segment for us is mainly hotel and health care. Health care is dynamic. Hotel is almost at a standstill. Residential is very disturbed. So with what we call the diffused market for our activity, our medium voltage activity, the diffused market is hit by the crisis, not as much as MMM, mining, metal. And we have, by chance, a strong positioning on some resilient segment, power and grid utilities and mobility transportation. That is for the trend that we observed on this part. I want to insist on the technology part because I have somehow covered already the general and the investment when I was talking about the segments. So I will -- the orange part of this slide, I have already covered it. I insist now my last message on this slide is on the technology. The lockdown that we all experienced in the months of March, April and May has opened the eye of a lot of our partners and our stakeholders, customers, consultants about the importance of the remote services, importance of the smart component of the -- of any kind of network -- of our network and it is a strong push towards smart component diffusion inside the utility. And also the smart access, the remote access to equipment in order to do some maintenance. And your company has quite a good position for that with most of our projects being delivered being connectable -- remote connectable in order to do some remote maintenance or remote access. So that is a very strong push that has been observed, and people have understood also the importance of being able to do remote factory acceptance test. We have been very, very disturbed in March and early April in our operations by the fact that our customers could not come to our plants to do factory test. Starting from April and more and more along the months, the months of May and June, our customer has taken confidence into remote factory acceptance test because we have already -- we had invested in the past 6 months ago, we are investing into the right tools to do camera -- high-definition camera, et cetera, in order to do some remote factory acceptance test. This has allowed us to rebound in June and July as you will see when we'll talk about the figures. So the fact that now our customers have also understood the importance of remote access, including factory acceptance test, has been a great help for the rebound of the figure after the big dip of March and April. I continue on the executive summary. So I am on Slide #5, the very strong momentum on order intake. As I was mentioning regarding the segment, our positioning on some resilient segments has allowed us to have a very strong order intake in the deep of the crisis in April, May and June. So our sales was heavily disturbed. This is our priority for now, recovering the sales that -- but we have a very strong backlog, thanks to a very strong order intake. A good thing also is that our order intake come from several segments. The resilient segment I was mentioning. Here, you have a subset of 5 orders, which are higher than EUR 1.5 million each: so Azure is in solar, transformer for solar renewable generation; ABB Hitachi is in GIS, in oil and gas downstream segment; Siemens is in transmission utility segment; Chittaranjan is in local locomotives, so transportation segment; and Toyo is also in medium voltage for refinery, meaning oil and gas downstream. So you see a good dispatch of major order for the core of activity, GIS, local. Now all this is medium voltage transformer and equipment and products. Good achievement also. We have used the period of lockdown to progress quickly on the licensee partner. So we have qualified and finalized 2 medium voltage AIS licensee partner and 2 RMU secondary switchgear licensee partner. So 4 of them have been finalized, meaning going to market by quote date, quote date means that they -- they can quote on the market and so I think that they are ready to deliver, have come to the market in the last day of the quarter that -- of June, okay. Our issues are sales. We have a strong backlog and we have plenty of difficulties to deliver this backlog because of the lockdown and the consequence of the lockdown. Projects are being delayed and it is heavily impacting our figure of quarter 1 fiscal. And we have a recovery plan. We have a lot of discussions with our customers in order that they take the goods that we have manufactured for them as per the plan. We have been hit by the lockdown like everybody in April and May. We have very quickly restarted our operations starting from second half of May and June, July as well. So we have very quickly put back our operation in order. I will mention at some stage that we have a few cases of COVID-19 among our team, but not an epidemic. We have been very quickly able to identify a few cases whenever they happened. It happened in July, and we could identify the contact and tracing the contact and limit the spread of the few cases that we had in Baroda and the Kolkata. So operationally speaking, we are up and running, but our customer must take our goods. This is the issue that we have right now. And the recovery plan goes until September to catch up the different sales, which have been delayed in the first part of the lockdown. This is the second -- the middle part of this screen. We continue to have uncertainty until now. We are not yet out of the consequence of the lockdown to go to Nepal, to go to Assam, to go to different states, which are sometimes in lockdown, sometimes not like Bihar 2 weeks ago, 3 weeks ago. We still have a lot of consequences and the higher uncertainty, and this is basically the message, but we have also recovery plan to catch up the EUR 18 million of sales, which were delayed in April and May. Priority is catching up. We continue having a good order intake. Priority is also is to master our cost inside this environment. We have heavy program of cost reduction, including manpower, including both on the industrial side and in the commercial side. We need to maintain our competitivity and is the priority number that you can see also in this uncertain period is to secure cash and to get our cash from our customers. In March and April, a lot of customers have stopped paying under different, more or less, good reasons and we are catching up all this delayed payment. Ever since, the cash collection was good until March, but April was awful. We have to -- and we are still catching up and charging the customer for the cash. Last point is also important among the priorities, I want to stress on that. We are taking some conscious call that we want to maximize our manufacturing capacity to catch up on the delayed sales. So this is not really an item for quarter 1 of this year, but this is definitely an item for quarter 2 and quarter 3 of this year. We are right now manufacturing goods that we will know -- that we will not be able to ship them in August, but we will be able to ship them in September. But we want to capture as much as possible all our manufacturing capacity in order to catch up the EUR 18 million of delayed sales that we had in April, okay? So we have to do sometimes the trade-off between inventory and capacity utilization. We give priority this month to capacity utilization and we will have to pay the price somehow at the end of August with the high inventory that we will try to decrease by September. But this is not for quarter 1. It is for quarter 2 mainly. I go to the next slide. You will take it probably right now, Arnab, from Slide #7.

Yes, Bruno. Thank you. Just to update on the financials. As Bruno said, the momentum in the market, primarily due to the segments where we are mainly present, which is power and grid, oil and gas. So due to this resilience, the order booking performance for the company was good. So overall, if you see for the quarter, in spite of the lockdown, we had a double-digit order growth. So we had 11.1% order growth in the quarter and with a good mix of order growth from end users as well as EPCs. Moving on to the sales. As we covered in the executive summary, so we had INR 150 crores, which we could not ship because of the lockdown. As you know, the country was on a complete shutdown since March 22, but the supply chain effect of it was felt from mid-February. So as a result of this, the overall impact for the quarter was about INR 150 crores what we could not ship in the quarter and that primarily impacted the performance. Moving on to the P&L, and before I go into the P&L, I think we need to contextualize the P&L a little bit. So you can see, compared to the last quarter to this quarter, we had INR 150 crore lower sales. Now mechanically, if one has to do the volume impact of the INR 150 crores, which account for 30% gross margin, it should have translated into a INR 45 crore loss, but what we have reported is INR 27 crores before the exceptional item. So which means there has been some good news in the P&L. That is mainly coming from 2 or 3 buckets. The first bucket of good news came from the gross margin. So if you see, the gross margin compared to a comparable quarter last year has improved by about 6.6%. A part of it was due to the mix because this quarter we could not ship out some of the equipment. There are some of the flow products that got shipped more. So there is an effect of that. So approximately 2% is the effect of the mix -- of the favorable mix. And the fact that I'm highlighting this is because that's not a sustainable thing. And hence, you should discount that 2% and look at the whole thing. But even if you discount the 2% and look on a sustainable basis, still you see a very significant improvement. Still we are over in the 31%, 31.5% mark and this is thanks to the -- all the communications, which we have been doing to you in the last few quarters on the -- on our go-to-market, having a very segment-focused kind of an approach, looking to eradicate the under-absorption or reduce the under-absorption in the plant, a combination of all of this. So that has shown a result in this quarter in terms of the gross margin effect. As the effect of COVID was spreading, so we did a complete relook at our cost structure. So you could see a lot of reflection of that in the quarter in the P&L and you will see more reflection of -- in the coming quarters. So the way we are approaching the entire fixed cost is we have segmented it into 2 parts. A set of tactical actions, which we are doing during COVID to brace ourselves for the lower volume in COVID, which means some tough calls on employee payouts, some restrictions on salaries, some -- a lot of restrictions on travel because there is almost -- we are in a zero travel situation. And then there are some structural actions, which is happening on the overall, I mean, kind of footprint, which we have across the country, the kind of manpower and we are relooking at each and every aspect of cost. So there is a very significant work, which is happening there. Some effect of it is relevant in the quarter as you will see that the employee cost is lower, the other expenses is lower and so on and so forth. Cash remains a focus, and this quarter was stretched. Although, as Bruno said, April was very bad with the complete lockdown. May was slightly better. June was better than May. July was better than June. So the graph is positive. But we are still, I mean, in a tough market situation as far as the cash is concerned. So there is some reflection of that as you see the interest cost in the P&L. But yes, it's an area where we are focused, and we are trying to recover it. So net-net, if you see other than the volume impact, I think it has been, most of the lines, there is a positive, but the volume impact is what it is because of the lockdown. And we expect to catch it up in the coming 2 quarters. It will not be an immediate recovery in the next quarter. There will be partly recovery in the next quarter, and then we will be partly recovering it in the October to December quarter. So that, in a nutshell, is the overall P&L picture, and I will stop here and open the call for questions now.

[Operator Instructions] So we have first questions from Mr. Jigar Shroff from Financial Research.

Yes, I had a couple of questions. One is how does the euro appreciation affect us? That is the first question. And what would be the net debt position? And what would be the utilization level across our factories at this point of time? These are the first 3 questions, and I'll continue after that, please.

Okay. Let's go one by one. I think on your first question on the euro appreciation, yes, it does affect us to the extent we have the imported products. And as you know, we have 2 products in our portfolio, which is mainly imported. One is the gas insulated switchgear, and the second is the portion of relays, which we have. So these 2 product lines will have appreciation impact for us. But having said that, as I have communicated in earlier, we do a hedging, but hedging is always not a profit hedging. So there will be still some timing gap. But principally, we do hedging and we cover it. So that's on your first question, but that's about, I mean, 15% of our portfolio.

But is it a pass-through or something, I mean?

See, most of our products are engineered-to-order product. So when you are quoting for a project, you usually take it into the pricing and you pass it through. But if the project is getting delayed for some reason, and you would have already quoted in the project earlier, that is where it will come and impact you for that particular project. But principally, it is a pass-through because you are taking the current costing, and you're costing for the project, okay? Now to your question on the net debt, I mean, see, in the June quarter, we don't circulate the balance sheet, so I think it's not prudent on my part to call out a number. But yes, there are some impact of it definitely on the debt, but we were able to manage it over the overall volume limit. But I'll not give you a number because we don't publish the balance sheet in the June quarter. Your third question was -- sorry, if you can repeat once again.

The utilization level across all the factories.

Utilization of the factory on -- see, April, the factory was completely shut, so May is when we started getting the approvals and we started opening the factory. So May, we were at about 20%, 25%. June, we came back to the range of about 70%, 75%. And July has been better than June. So July, we are almost at about 90%, 95% range.

So July, August at this point of 90%, 95%.

That's right. There are still some supply chain dependencies because of -- the factories are operational fully, but there are some supply chain dependency still because as you know in different -- yes.

Yes, yes. Please go ahead...

As you know, we are seeing the different parts of India is in the different stages of COVID, we have some dependencies in Maharashtra and all which is still recovering, I would say.

Okay. And sir, I believe, for FY '20, the mix of sales from systems was about 74%, I believe. So what is the targeted mix that we're looking at in the medium term in terms of transaction systems and services? So if you could elaborate on that.

So as you rightly said, the FY '20, if you see FY '20 terms, systems was around 74%, okay, and transaction was 15%, services was 11%. So that was FY '20 mix. Directionally, I mean, we intend to take the transactions to about 17%, 18%, services to about 12%, 13%. So that's the direction. Of course, as I said, the June quarter is not representative because we could not ship the larger projects. So hence, I'm not picking June quarter as a reference point here. But on an average, transaction will go up by about 2% to 3% and services by about 1% to 2%.

I see, I see. And any distinct outsourcing opportunities in terms of timing -- in terms of export opportunities that we are looking at?

It is already there.

So export, we are also having initiative to capture the new aggressivity of EPC -- Indian EPC to abroad, so meaning to support our Indian EPC to capture foreign markets of the complex solutions. We have seen in the past few months, a very strong [indiscernible] of staying when it's done of L&T of [indiscernible]. So these Indian EPCs have shown a very strong aggressivity to capture complex projects in abroad, and some of them right from the tender. So this is an indirect export that we are also focusing right now. Yes, and it has helped also to capture part of the 11% growth that we had. The other elements that came in -- from the EPC action plan contribution is the fact that ABB and demands solution, the groups, are being step-by-step dismantled. And they become open to Schneider Electric products. So we have also been able to capture some market share, which was forbidden to us in the past because it was a captive market share between ABB and Siemens. But now that big conglomerates are being split and spin off, it opened some new markets for us, a new channel is open to us, and we have been able to capture some market share from ABB and Siemens solution branches, which are not spin-offs from demand groups.

Okay. What was the next question, sorry?

Yes. Last question, sir. What is the EBITDA margin that we are looking at in the medium term?

I mean, as you know, we don't give you a guidance. So I think we will give you enough insight into the business, but we'll not give you a specific guidance going forward. That's something which we don't do.

Something like, I mean, in the high -- in the double-digit level...

I won't give you a specific guidance. Sorry, we don't do that. You can ask questions about the business. We will give you a specific answer there. You can join back in the queue.

[Operator Instructions] So we have questions from Mr. Kunal Sheth.

Sir, if you can give us some sense about the -- we were supposed to do a VRS scheme. So any updates on that? Have you concluded it? And...

Okay. So Kunal, the first phase of the VRS, which we had announced last year, that got concluded. If you remember, last year, we had done a INR 33 crore provision for the VRS sometime in Q1, so that was concluded. But as I said, due to COVID, we are looking at each and every aspects of cost. So there are some cost actions, which we are doing. But the way we are doing this time, it is more in phases. It's not a one-off big bang scheme, but it is happening in phases. So you will have an update going for -- from us every quarter now on the impact of what you see. You already see a small portion of it, which we have classified as exceptional in this quarter, the [ INR 24 ], which I showed you in the P&L. But you will see the corresponding higher amount coming in the next 3 quarters. So it will be by phases, but it will not be one big bang kind of a thing.

Okay, okay. But -- so will it be concluded in this year? Or we can see it spilling out to next year as well?

Most of it will conclude during this year, but we are looking at every aspect of cost, both in the plant as well as in the commercial teams.

Okay. And sir, if you can give us some sense in terms of while we understand the last few quarters have been a little bumpy and this year, obviously, because of COVID impact. But in 2 years' time, what steady state operating margin we can expect from the business?

Okay. I think let's break the question into 2, 3 parts. So if you see the entire '19, '20 fiscal, so there are -- so we had 2 abnormal events, which hit us during this quarter. One is, obviously, this quarter, we had the COVID impact, which is INR 150 crores of sales we missed, we told you. The second one is, if you remember, in the month of July last year, we had the Baroda flood, and the operations were down for about a month in Baroda. And there is a significant impact, and we are in the process of getting a property damage and a business interruption claims. And if you go to the transcript of that particular quarter, you will see a quantification of that, it was done. So these 2 abnormal events, if you take out in the entire year P&L and do a normal P&L simulation, you will see that, broadly, we are in direction with the strategy, which we have been giving to you. So from that perspective, and what I just told you during the P&L presentation, that steady state, we are reaching at about a 30%, 31% gross margin. So you can do a simulation with an average cost, so that will give you a trend of -- and that's the reason I'm not answering the gentleman's question on guidance because I think we give you enough figures to do your own modeling. But if you see, with the 30%, 35% steady state margin, these 2 abnormal events taken out, you can get a fairly good direction of the -- where we are moving. And I think with the volumes coming back and the catch-up, which will happen in the next 2 quarters, I think we will move further in that direction.

Next question is from Mr. Manish Goyal from Enam Holdings.

So just to take it forward, Arnab, on the gross margins, so you said only 200 bps is something, which is we can relate to mix change of the higher share of transitional products. And you are indicating that the revenue share will definitely keep increasing going forward. So do you think this as a sustainable trend? Like in our order inflow, do we have such a mix which can support that and on -- probably the inquiries, what we have ongoing right now? And also if you can give up the revenue breakup and the order book breakup, as always, you give.

Sure, Manish. I think what I would suggest is don't take the quarterly breakup because as I told you, it is not representative because we could not ship the equipment. So I will ask you not to take the quarterly breakup. But overall, if you see -- you already have the FY '20 breakup, which was 74% in system, 15% in transaction, 11% in services. And as I told you directionally, to the earlier question that the 15%, we are looking to make it around 17% and 18%, that 11% to around 12% or 13%. So that is the desired mix going forward. And -- so that answers your mix question. In terms of the backlog, if you see, Manish, we are already at about INR 937 crores, which was end of June. So end of March, this number was about INR 892 crores. So the backlog has increased partly because of the shipments, which we could not do. But the order momentum, which I told you 11% growth, that is also added, which means if you look at it arithmetically, we have around 8% to 9% -- 8 to 9 months of our sales, which is already in the backlog. So it's a very, I would say, healthy situation we are in from that perspective. Of course, the challenge would be to get the supply chain back in track, our ability to produce and then ship to the customers with various degrees of lockdowns, which we still have in the country. Bruno is giving you some example earlier of Nepal and other things. I think those challenges continues, and I don't think it will be a recovery overnight. We will -- next 2 quarters, we will face the challenges. So that's the uncertain part of it. But subject to those elements, I think, clearly, we are in a stable direction, I would say.

Would it be possible to give the order book breakup that should be -- probably give us a better trend as well?

Out of this INR 937 crores, which I told you, systems is about 73%, transactional is 16% and services is 11%.

Before taking the question from Mr. Viraj Mithani from Jupiter Finance [Operator Instructions].

Okay. Just taking forward, what is the order book, you said INR 937 crores, right?

That's right, for the year.

Okay. And can you -- the same breakup is -- what has been the intergroup portion of the order book and this INR 937 crores for?

This is completely the external order book. This is not intergroup. Intergroup will be about INR 100 crores, which is over and above this.

[Foreign Language] INR 100 crores above. And any positive traction coming there in terms of the last 4, 5 months?

I missed your question. I couldn't hear you well. Can you repeat, please?

Any positive traction happening in the intergroup order book? I mean, are we seeing some increasing trend in that? Or...

No. I think it's pretty much in the same trend. There's not much change.

All right. And sir, this quarter, we became net worth negative. So what are the -- like you think in next 2 quarters we'll be again recovering the net worth?

Yes, absolutely. That's a pure arithmetic of the INR 150 crores what we missed. So if you see, we only did INR 200 crores of sales in this quarter. So that's an arithmetical reflection of that. That will come back.

So we won't require any parent support again for the net worth, right? That would be...

I don't think so, I don't think so.

Okay. Fair enough. And my last question is that shift to digital does help Schneider in terms of like have you seen a trend from the government or any of the infra projects where it is helping since this pandemic has started, a lot of things are shifting digital. So...

So Bruno, you want to take that?

So we benefit from the government plan, but they were already in the pipe, okay? The government plan is just an acceleration of the smart cities program for which we were already positioned. It's -- and when I say smart cities, it can be a smart home or smart campus or simply the monitoring of the secondary power network from the distribution company, okay, the power distribution company. So you have different level of complexity of smart cities, but the initiative of the government is pushing forward these smart cities, and this is what is the biggest impact on medium voltage. The second initiative of the government is the push to localize the data of India in India, and this push gives some market that I have not mentioned at the very beginning because it is still a smaller part of our pipe. Now some big data center giants, localizing the data center inside the boundaries of India, the first one being Amazon. So you don't see this in the quarter 1 results because it is still a small percentage of sales. But the push of the government to localize in India, the data of India is pushing the big giants to localize their data centers in India, the first one being Amazon, on which we are positioning our offer for the Hyderabad systems. But this is not yet visible inside quarter 1 figures. It might, I hope so, be considerable in quarter 3 figures.

And what will be the size of the opportunity in this digital [indiscernible] like just a guess?

It probably depends on the data center over 50 megawatts, you have several million euros of medium voltage and several million euro of low voltage equipment on a data center of 50 megawatts. Then it's a number of data center of 50 megawatts, which have been built. And this is a size -- the type of data center, which are being built right now, which are in the pipe right now. Before, it was much smaller figure for 5 or 10 or 15 megawatts. But now we start really big that has been performing in the country.

It could be -- like, can you put some number to it, the ballpark figure of the opportunity?

I think it's very difficult to do that. I think Bruno is...

No, no. And it's a matter of -- we have running tender right now, and I don't want to give information to competition about the level of our offer, which is currently under protection. But we are talking about several million euro of low voltage and several million euro of medium voltage products.

It could be a decent-sized opportunity or a big-sized opportunity for us if it worked out. Is that correct to think?

The first one -- the first giant in the country is in Hyderabad, Amazon Services.

Next question is from Mr. Parimal Mithani from Credential Investment.

Yes. I just wanted to know, basically, the government has come with a bandwidth for power equipment. How does Schneider benefit from that? And secondly, I wanted to know what's the currency in terms of your Indian operations? And since we have not been turning corner since long time, any idea on from that? And what do you think about it?

So as the ban -- the initiative of the government regarding the Make in India is not something that -- we are positively impacted by the initiative of Make in India because a portion of our sales are already localized and our supply and vendor base. We are negatively impacted when we talk about the imported component, on which Arnab mentioned before, the one which are exposed to currency for exportization, meaning GIS -- media voltage for GIS and for protection relay. GIS protection is usually exposed to the European risk, which is euro valuation. And protection relay is exposed to the Chinese risk of imports. Each of them is a few million euro of [ headroom ], meaning that it can be recovered of a few hundred [ kilowatt ] in case of a risk shock euro variations in terms of the GIS or the [ import ] tax of participating in the import from China protection relay. So the other activities, the Make in India strategy of the government is favoring our company.

On your second part of the question, I think I have already answered to Manish. You would have got a sense on the P&L and how we are expecting to move. I think that's what I've already answered.

And sir, last thing, this traction, are you seeing traction because of this -- the Chinese ban on your -- in terms of inquiries in terms of products?

So in terms of products, China products is impacting protection relay, but procurement was done of our protection relay, which is in Europe where you always have 2 plants, one in Europe or anywhere and one in either India or China. So in the face of protection relay, we have drops. We augment them of Europe, which will be a little bit more expensive. So it may be competitivity and price issue of inner impact of a few hundred that we can have this year. This is the only material risk that we have from the China ban in the power sector, the fact that we could be forced to use another supply chain than our usual supply chain. The rest is moving forward because we have already in India.

Next question is from Mr. Manish Goyal from Enam Holdings.

Just one question. Arnab, if you can just share the IG group revenue and order inflow for current quarter?

Okay. For the current quarter, the IG orders were around -- is in Investec. It was about -- I think, about 5 -- current quarter, you're talking about, right? Current quarter IG order was in the range of, what, about INR 5 crore to INR 6 crore. It was not very much. And what was your second question, Manish?

Revenue contribution from IG in the current quarter.

Current quarter, IG was in the similar range. It was in the -- everything was down, but IG, I gave you the specific amount.

China, approximately 18%.

1-8, 18%.

18%. Yes, 1-8.

Now I would like to hand over the conference for the closing comment to the management.

Bruno?

So just one word of conclusion, I will be fast. The current market is -- we observe it is rebounding, okay? So sentiments looks to be positive in medium to long term. And we have, however, a few segments, which will take time to come back. I've mentioned this in the introductory presentation. So current market rebounding, something on positive medium to long term. And on the short term, a few segments will take time to come back. So we are watching, as usual, this evolution at ground level in order to capture more growth and in line with our strategy, and that's my concluding our remarks. Have a nice evening, everybody.

Thank you, everyone.

Thank you.

Thank you.

Shall I conclude the call?

Yes.

Thank you, ladies and gentlemen. This concludes your conference call for today. We thank you for your participation and for using iJunxion conference service. You may disconnect your lines now, and have a great day ahead. Thank you.

Thank you, thank you.