Siemens Q1 net profit seen up 35.8% to Rs 96 cr

Net sales are seen going up by 4.9 percent to Rs 2,515 crore from Rs 2,397 crore during the same period, according to CNBC-TV18 poll.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to go up by 56.7 percent YoY to Rs 193 crore in the October-December quarter. Operating profit margin is seen improving 250 basis points YoY to 7.7 percent in the first quarter.

Given its focus on power transmission & distribution and industrial automation segments, which are facing weak demand, analysts expect marginal improvement in revenues.

They expect segments like healthcare and infrastructure to grow while the traditionally strong verticals like energy and industrial solutions would slow down due to the sluggish economy.

Margins

Analysts feel the company's cost reduction measures will bear fruit in the first quarter.

Margins will also look improved due to higher write backs this quarter, according to analysts.

In July-September quarter, the company took a write-down of Rs 120 crore for the closure of its wind energy plant and guided for a further impairment of Rs 80 crore in FY13, without indicating a timeline for the same. This could materialize in this quarter, say analysts.

Expectations on the order book

According to analysts, Siemens is likely to receive orders worth Rs 1,500-2,000 crore, taking its unexecuted order book to Rs 9,700 crore at the end of the quarter.

Investors should watch out for 1) any further losses in energy segment on execution of low margin orders (mainly in T&D); 2) recovery of cost overruns; 3) pick up in execution delays (Project execution has been constrained over FY12, impacted by high cost of capital and slower offtake by customers); 4) order inflows; and 5) any large order in the Middle East region that would be a positive.

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