Arnab Roy, Zone CFO – Greater India, Schneider Electric Schneider Electric India, which is the Indian arm of the French conglomerate Schneider Electric is likely to see less fluctuations in prices and availability of its two key raw materials – electronics and metals – this year, which in turn could boost the sales and revenues as economic activity post covid era picks up leading to demand surge of its products.
Over 50% of the products manufactured here in India are designed and developed and raw materials locally sourced as well.The electronics market has been facing tough times in recent years due to several factors that include global chip shortage, rising prices and supply chain disruptions. The COVID-19 pandemic has further exacerbated the already difficult situation, leading to a surge in demand for electronics as conditions prevailed which forced people to work, study, and hold meetings from home.
The closure of factories during lockdowns has also aggravated the increased demand for electronics during and post Covid pandemic.Schneider Electric has product catalogue as wide as building automation and control, low voltage products and solar and energy storage, critical power, cooling and racks, Electrical car chargings, UPS sytems, light switches and electrical sockets among several others.
But even as inflation in India goes down, economic recovery gathers steam with renewed industrial activities, Schneider Electric India Pvt Ltd which among others manufactures electrical equipment and supplies can not rule inflation completely out as a threat. In an exclusive interaction with ETCFO, Arnab Roy, Zone CFO – Greater India, Schneider Electric said inflation will remain as a moderate concern for this FY. “For our industries, the metal prices are relatively more stable compared to last year and electronics supply predictability is better. There will be inflation in electronics but most likely less unplanned buying”, Roy said. When asked if inflation remains a concern for CFOs for the current fiscal, he said (inflation) “a moderate concern for this fiscal”.
The Company focuses on building automation and security, installation systems and control, power monitoring and control critical power, and cooling services for electrical energy water, mariner, oil and gas, mine mineral and metal, construction sector amongst a huge range of products, services and solutions. The World Bank’s metals and minerals price index rose 10 percent in the first quarter of 2023. Price increases reflected positive sentiment about stronger demand amid supply disruptions for some key metals. Metal prices are expected to fall this year as supply recovers amid weak demand in advanced economies and China. When asked about how the company is dealing with raw material prices which are higher than usual, Roy said, “metal prices are relatively more stable and are moving in a more predictable manner”, adding the commodity hedging is seeming to be more effective this year. The CFO observed that Schneider India hedges risks in a structured way after factoring the natural hedges in this cash flow. This is a bottoms-up forecast that comes at the unit level and is then calibrated at the country treasury.
About Schneider Electric
Schneider’s purpose is to empower all to make the most of our energy and resources, bridging progress and sustainability for all. We call this Life Is On.
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