Simple way to group heavy data in xslt 1.0 using non Muenchian grouping

I am a total newbie on xslt, and hence unable to understand the complicated solutions provided here for what I want to achieve. Grouping of a heavy data structure ( meaning there are lots of attributes and elements and hence cannot be going with any concatenated solution) in a non Muenchian way. Coz I feel concatenation of large data will hit performance. Here is my sample input data, required output and xsl I have tried :

# input xml #

    <out:OuterSegment>
        <out:Segment >
             <out:from Code="CHN"/>
             <out:tothis Code="HYD"/>
             <out:group>0</out:group>
        </out:Segment>
        <out:Segment >
             <out:from Code="HYD"/>
             <out:tothis Code="BLR"/>
             <out:group>1</out:group>
        </out:Segment>
        <out:Segment >
             <out:from Code="BLR"/>
             <out:tothis Code="TVN"/>
             <out:group>2</out:group>
        </out:Segment>
        <out:Segment >
             <out:from Code="TVN"/>
             <out:tothis Code="DEL"/>
             <out:group>2</out:group>
        </out:Segment>
    </out:OuterSegment>

output xml

    <out2:OuterSegment>
        <out2:Segment >
             <out2:from Code="CHN"/>
             <out2:tothis Code="HYD"/>
             <out2:group>0</out2:group>
        </out2:Segment>
    </out2:OuterSegment>    
    <out2:OuterSegment>
        <out2:Segment >
             <out2:from Code="HYD"/>
             <out2:tothis Code="BLR"/>
             <out2:group>1</out2:group>
        </out2:Segment>
    </out2:OuterSegment>
    <out2:OuterSegment>
        <out2:Segment >
             <out2:from Code="BLR"/>
             <out2:tothis Code="TVN"/>
             <out2:group>2</out2:group>
        </out2:Segment>
    </out2:OuterSegment>
    <out2:OuterSegment>
        <out2:Segment >
             <out2:from Code="TVN"/>
             <out2:tothis Code="DEL"/>
             <out2:group>2</out2:group>
        </out2:Segment>
    </out2:OuterSegment>

XSL snippet

    <xsl:choose>
    <xsl:when test="position() = 1">
         <xsl:message> its the first row </xsl:message>
         <out:OuterSegment>            
                <xsl:apply-templates select="in2:IncomingSegment"
                                                    mode="localIncomingSegmentRefToSegment" />
            </out:OuterSegment>
    </xsl:when>
    <xsl:otherwise>
         <xsl:variable name="prevgroup" select="//in2:IncomingSegment[position() - 1]/@Group"/>
         <xsl:message> is the subsequent row</xsl:message>
         <xsl:if test="$prevgroup = //in2:IncomingSegment[$prevgroup]/@Group">
                <xsl:apply-templates select="in2:IncomingSegment"
                                                    mode="localIncomingSegmentRefToSegment" />                      
         </xsl:if>
         <xsl:if test="$prevgroup != //in2:IncomingSegment[$prevgroup]/@Group">
                <out:OuterSegment>     
                        <xsl:apply-templates select="in2:IncomingSegment"
                                                    mode="SegmentRefToSegment" />
                </out:OuterSegment>
         </xsl:if>
    </xsl:otherwise>
    </xsl:choose>

I will need to mention that the above input xml was generated by another xslt for which the input is as :

Actual input xml

    <in:RefSegment key="1" group="0">
        <in:inSegment >
             <in:from Code="CHN"/>
             <in:tothis Code="HYD"/>
        </in:inSegment>
    </in:RefSegment>
    <in:RefSegment key="2" group="1">
        <in:inSegment >
             <in:from Code="HYD"/>
             <in:tothis Code="BLR"/>
        </in:inSegment>
    </in:RefSegment>
    <in:RefSegment key="3" group="2">
        <in:inSegment >
             <in:from Code="BLR"/>
             <in:tothis Code="TVN"/>
        </in:inSegment>
    </in:RefSegment>
    <in:RefSegment key="4" group="2">
        <in:inSegment >
             <in:from Code="TVN"/>
             <in:tothis Code="BLR"/>
        </in:inSegment>
    </in:RefSegment>
    <in:DataSegments>
        <in:Data >
                    <in:keyref> 0 </in:keyref>
        </in:Data>
        <in:Data >
            <in:keyref> 1 </in:keyref>
        </in:Data>
        <in:Data >
                <in:keyref> 2 </in:keyref>
        </in:Data>
            <in:Data >
                <in:keyref> 2 </in:keyref>
        </in:Data>
  <in:DataSegments>

Is it possible to obtain the final output.xml in one shot out of the above actual input.xml ?