Multinational engineering firm Siemens' third quarter net profit is seen rising 10.5-fold year-on-year to Rs 136 crore on strong operational front, according to average of estimates of analysts polled by CNBC-TV18.
The company follows October-September as its financial year.
Revenue may increase 2.7 percent to Rs 2,438 crore in June quarter compared to Rs 2,374 crore in the year-ago period. Analysts expect sedate growth in revenue on lower starting order backlog, which could keep the execution weak.
Operating profit (earnings before interest, tax, depreciation and amortisation) climbed 4 times year-on-year to Rs 216 crore and margin may expand 670 basis points to 8.9 percent in the quarter gone by.
Siemens, in June quarter 2014, had revised estimated revenue, costs and project related provisions while there was no separate booking under exceptional income charge. So adjusted for this figure, adjusted EBITDA could be Rs 203.5 crore and PAT Rs 135 crore.
Margin may get support from cost rationalisation initiatives, higher indigenisation and reduced project-specific losses. Low base in the year-ago quarter may also support margin.
Raw material imports are 55 percent of raw material cost and 82 percent of import is from Siemens AG’s network. Euro has depreciated by a sharp 20 percent against rupee since March 2014, which may, too, help to improve product competitiveness and margin profile.
In fact, the margin has been consistently trending higher for Siemens, at 9.4 percent in March 2015 from 8.7 percent in December 2015, 6.9 percent in September 2014.
Analysts expect improved profitability in the company’s energy and industry verticals.
Key issues to watch out for would be order inflow environment across various industries, pace of execution, provision for cost & time overruns and margin.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
