Schneider Elect. Q1 FY27 Results (NSE: SCHNEIDER)
Signal: Margin pressure
The read
The key inflection is a sharp margin deterioration: revenue grew +4.8% YoY to ₹65,136 lakh, but raw material cost rose +28.5% to ₹45,728 lakh and reached 70.2% of revenue versus 57.2%, compressing gross margin by 2,650bps and reducing PAT 69.8% to ₹1,244 lakh; the next results must show whether this is transient or a persistent pricing/mix problem.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹651.36 Cr | +4.8% | +10.5% |
| Net profit | ₹12.44 Cr | -69.8% | |
| EPS | ₹0.52 | -69.8% | |
| EBIT margin | 6.3% |
P&L walk
Standalone revenue increased to ₹65,136 lakh, +4.8% YoY and +10.5% QoQ, but material-cost inflation or mix pressure reduced gross margin by 2,650bps YoY to 35.4%, driving the operating margin proxy down to 6.3% and PAT to ₹1,244 lakh, -69.8% YoY.
Key positives
- Revenue from operations increased to ₹65,136 lakh, +4.8% YoY and +10.5% QoQ, maintaining positive top-line momentum.
- EPS declined 69.8% YoY to ₹0.52, in line with the 69.8% PAT decline to ₹1,244 lakh, with no evidence of dilution in this quarter.
- The limited review report carried an unmodified conclusion on the unaudited results.
Key concerns
- Gross margin compressed 2,650bps YoY to 35.4% as raw material cost rose to 70.2% of revenue from 57.2%; with revenue growing but margins falling, the company appears to have absorbed cost pressure, and the filing does not disclose the driver.
- Operating margin proxy fell 555bps YoY to 6.3%, while finance costs rose 40.7% YoY to ₹1,515 lakh, compounding the pressure on PBT.
- PAT declined 69.8% YoY to ₹1,244 lakh despite revenue growth of 4.8%, showing that earnings momentum is substantially weaker than sales momentum.
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