Siemens Ltd Profit PLUMMETS 41% But Revenue SOARS! What's Next for Investors?

Author

Simar Singh | Whalesbook News Team

Detailed Coverage:

Siemens Ltd announced its financial results for the quarter, revealing a substantial 41.5% decrease in net profit, which fell to ₹485 crore from ₹830 crore in the same quarter last year. This decline was partly attributed to a one-time gain of ₹69 crore from the sale of property in the prior year's fourth quarter. Despite the profit dip, the company achieved a healthy 16% growth in revenue, reaching ₹5,171 crore, driven by strong performance in its Mobility and Smart Infrastructure businesses. However, the Digital Industries segment faced challenges due to a lower order backlog from the previous year and subdued private sector capital expenditure. New orders grew by 10% to ₹4,800 crore, and the order backlog increased by 6% to ₹42,253 crore. A significant corporate action announced is the change in the financial year to April 1-March 31, effective from October 1, 2024, with a one-time transitional period of 18 months.

Impact: This news is significant for Siemens Ltd shareholders and the industrial sector. While the profit drop is concerning, the strong revenue growth and increasing order book suggest underlying business strength. The financial year change is a strategic move that might affect short-term reporting comparisons but aligns the company with industry standards.

Difficult Terms Explained: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. EBITDA Margin: EBITDA divided by revenue, indicating profitability from core operations. Capex: Capital Expenditure, money spent by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.