When you hear Schneider Electric, you usually think of a global powerhouse in energy management and automation. But one of its Indian subsidiaries, Schneider Electric President Systems Limited (SEPSL), has had a quieter — and more nuanced — six months.
The company’s revenue slipped, but it also pulled off something few manufacturers manage in a slowdown: profit margins actually improved. Let’s unpack what happened.
In the first half of FY26, SEPSL’s revenue from operations dropped from ₹238 crore to ₹187 crore — a 21% fall.
It’s not entirely surprising. The company supplies precision enclosures, integrated infrastructure solutions, and customized cabinets for IT and industrial clients — segments that have seen a bit of post-COVID normalization. Orders have taken longer to close, and demand from certain export markets has softened.
But while sales shrank, profits didn’t collapse — they got more efficient.
How do you make less revenue but higher margins?
Simple — you cut smarter.
Cost of materials fell sharply to ₹116 crore (from ₹170 crore).
Gross margins expanded from 30.25% → 35.3%.
Operating margins (EBITDA) improved from 9.7% → 11.8%.
In other words, SEPSL managed to squeeze more profit out of every rupee of sales by controlling input costs and streamlining operations.
Even at the bottom line, PAT fell only slightly — ₹16 crore vs ₹18 crore last year — but net margin improved to 8.6%. For a manufacturing company, that’s a solid show of resilience.
Here’s where things get interesting.
In the same period last year, SEPSL was burning cash — operating cash flow was -₹22 crore.
This year? It flipped to +₹31 crore.
That’s a ₹53 crore turnaround.
Better working-capital control, faster receivable collections, and leaner inventories helped the business turn its operations into a cash machine.
As a result, cash reserves soared from ₹17 crore to ₹102 crore — a 6x jump. For a company with a ₹187 crore half-year revenue, that’s an enviable liquidity cushion.
Even with slower sales, SEPSL’s net worth jumped from ₹170 crore to ₹216 crore, thanks to strong internal accruals.
Total assets rose modestly to ₹305 crore, and inventory ticked up to ₹44 crore — possibly to support upcoming orders.
In short, the company grew cautiously, avoided debt bloat, and fortified its balance sheet.
Growth — or the lack of it.
While efficiency metrics are great, SEPSL’s ability to expand topline again will determine its next phase. The industrial automation and infrastructure segments are cyclical; eventually, margin optimization runs out of road if volumes don’t bounce back.
But for now, Schneider Electric’s Indian arm looks like a case study in discipline over expansion — protecting profitability even when the market slows.
Revenue fell, but margins rose — a classic example of good cost control.
Cash flows turned positive, giving the company stronger footing for FY27.
The next test? Reviving demand while keeping this new-found efficiency intact.
If SEPSL can pull that off, it’ll prove that even in manufacturing, less can sometimes be more.
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