Schneider Electric’s margin more than halved as costs outpaced revenue
Delivery deferrals affected sales, while the tax rate rose 12.48 percentage points and other income formed 42.71% of pre-tax profit.
Filed 28 May 2026, 18:42 IST · after market close · Schneider Electric Infrastructure Ltd (SCHNEIDER)
Key takeaways
- Standalone operating margin fell 7.13 percentage points year on year to 7.64% as expenses grew 8.88% while revenue was almost flat.
- Net profit declined 59.77% year on year, with a 37.78% tax rate and other income contributing 42.71% of profit before tax.
- The stock fell 4.99% on the first trading day after results, in line with its 4.99% median absolute move after the past eight results.
Price around the results
Delivery deferrals left Q4FY26 revenue nearly flat year on year
Schneider Electric Infrastructure reported standalone Q4FY26 revenue growth of just 0.48% year on year, while expenses rose 8.88%, cutting operating profit by 48.00%. Management said delivery deferrals and external factors affected quarterly sales. Sequentially, revenue fell 42.70% from Q3FY26, when the company had reported a much stronger quarter.
Margin pressure was compounded by higher financing and depreciation costs
Operating margin narrowed 7.13 percentage points year on year and 9.13 percentage points sequentially because costs grew faster than revenue in both comparisons. Interest expense rose 15.93% year on year and depreciation increased 55.12%, adding to the pressure below operating profit. The tax rate also rose 12.48 percentage points year on year to 37.78%, while other income accounted for 42.71% of pre-tax profit, making reported profit quality weaker.
Q4 margin reversed the Q3 peak and sat below the Industrials median
The 7.64% operating margin was 8.02 percentage points below the 15.66% median for 71 Industrials peers that had reported the same quarter, placing Schneider Electric seventh from the bottom. The margin had risen from 11.15% in Q1FY26 to 16.77% in Q3FY26 before falling sharply in Q4FY26, so the latest result marks a reversal rather than a third straight quarterly decline.
New data-centre orders contrast with a deferred-delivery quarter
Management said the company secured a major power-transformer order from a data centre and a retrofit-solution engagement for another data-centre client. The presentation also said Schneider Electric introduced One Digital Grid, an AI-enabled platform for utilities, and an end-to-end battery-energy-storage solution with digital orchestration across EMS, DERMS and microgrid control. Management further presented a projection that per-capita electricity consumption could rise from about 1.5MWh to 2MWh by 2030.
The initial sell-off was typical in size but widened over five sessions
The stock fell 4.99% on the first trading day after the results and was down 14.91% after five sessions, underperforming the market by 12.65% over that five-session period. The initial move matched the 4.99% median absolute reaction across the past eight results, during which the stock rose four times and fell four times.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹590 cr | ₹1,029 cr | -42.70% | +0.48% |
| Other income | ₹15 cr | ₹-20 cr | — | +164.10% |
| Expenses | ₹545 cr | ₹857 cr | -36.42% | +8.88% |
| Operating profit | ₹45 cr | ₹173 cr | -73.88% | -48.00% |
| Operating margin (%) | 7.64% | 16.77% | — | — |
| Interest | ₹15 cr | ₹14 cr | +8.94% | +15.93% |
| Depreciation | ₹10 cr | ₹8 cr | +17.26% | +55.12% |
| Profit before tax | ₹35 cr | ₹130 cr | -72.92% | -51.70% |
| Tax | ₹13 cr | ₹33 cr | -60.04% | -27.89% |
| Net profit | ₹22 cr | ₹97 cr | -77.36% | -59.77% |
| EPS (₹) | ₹0.92 | ₹4.06 | -77.34% | -59.65% |
Operating margin of 7.64% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -4.99% | -3.49% |
| Next session | -9.74% | — |
| 5 sessions | -14.91% | -12.65% |
| 15 sessions | -3.35% | — |
| 30 sessions | +0.05% | — |
Volume on the results session was 1.51× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- SEIL secured a retrofit solution engagement for a data-centre client.
Guidance & outlook
- Per-capita electricity consumption is projected to increase from about 1.5MWh to 2MWh by 2030.
New orders
- SEIL won a major power-transformer order from a data centre.
New initiatives
- SEIL introduced One Digital Grid, an AI-enabled platform for utilities to modernize grids and reduce energy costs.
- SEIL introduced an end-to-end BESS solution with digital orchestration covering EMS, DERMS and microgrid control.
Problems & risks
- Delivery deferrals and external factors affected quarterly sales.
What to watch
- Whether operating margin recovers from 7.64% after the Q4FY26 delivery deferrals.
- Whether revenue improves from Rs 589.69 cr as deferred deliveries are addressed.
- Whether the tax rate moves back from 37.78% and other income falls below 42.71% of pre-tax profit.