Schneider Electric Infrastructure, a key player in the heavy electric equipment industry, has seen its shares hit the 5% lower circuit limit for the fourth straight day. The shares have fallen from ₹916 to ₹746.30, marking an 18.52% decline.
This recent drop means the stock has fallen 22% from its recent all-time high of ₹954.35. The decline followed the company’s Q4 earnings, which did not meet market expectations.
Despite this, the stock has still given a 215% return in the past year and a 611% return over the last five years, showing strong long-term performance.
On May 23, Schneider Electric reported a 92.7% drop in net profit for the March quarter, down to ₹3.28 crore, mainly due to a sharp increase in operating expenses, which rose to ₹398.54 crore from ₹349.55 crore in Q4 FY23.
Additionally, finance costs increased to ₹32.38 crore from ₹14.34 crore in Q4 FY23. Revenue from operations for the quarter increased by 15% year-on-year, reaching ₹471.75 crore from ₹410.51 crore.
For the full fiscal year (FY24), the company’s net profit improved to ₹172 crore from ₹124 crore in FY23, while revenue from operations rose to ₹2,207 crore from ₹1,777 crore, according to the company’s Q4 investor presentation.
Global brokerage firm Goldman Sachs has maintained a cautious outlook on the stock, citing the sharp rise in share value in recent years. The firm has a ‘Sell’ rating on the stock with a 12-month target price of ₹470 per share, due to what it sees as expensive valuations.
However, Goldman Sachs is optimistic about Schneider Electric’s future, believing it will benefit from the Indian government’s Revamped Distribution System Scheme (RDSS), part of power distribution sector reforms.
The RDSS is expected to drive a US$37 billion capital expenditure in distribution system expansion and strengthening over the next five years. Currently, projects worth US$14 billion have been approved under the scheme.
Recently, Capgemini and Schneider Electric announced a new collaboration focused on energy optimization.
Schneider Electric, headquartered in India, specializes in power distribution, manufacturing, designing, and servicing advanced products and systems for electricity distribution. These include distribution transformers, medium voltage switchgear, protection relays, and various electricity distribution and automation equipment.
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