Siemens June quarter consolidated net profit jumps 27% to Rs 578 crore on margin expansion

Siemens is letting go a business with outsourced manufacturing that has grown at mid-to-single-digit CAGR over the past decade.

Siemens Ltd, the Indian arm of the German technology group Siemens AG, posted a 27 percent on-year rise in consolidated net profit at Rs 578 crore in the June quarter.

Consolidated revenues rose 6.8 percent to Rs 5,203.5 crore, Siemens, which follows the October to September financial year, said in an exchange filing on August 9.

For the quarter ended June 30, 2024, Siemen’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin rose nearly 160 basis points to 11.6 percent.

One basis point is one-hundredth of a percentage point.

The company's consolidated operating margin rose mainly on the back of a fall in depreciation and amortisation prices seen during the quarter. Siemens reported a 13 percent fall in depreciation and amortisation expense during the quarter ended June 30, 2024 to Rs 458 crore from Rs 527.4 crore in the same period a year ago.

The operating margin of the company's energy and smart infrastructure segment rose significantly, lifting its overall profit and contributing to a the rise in the overall profit for the quarter.

Siemens also saw its tax outgo rise 18.6 percent during the quarter to Rs 179.4 crore, which held back the rise in its net profit.

"The strong performance came off a high-quality order backlog that we continue to deliver diligently," Siemens' Managing Director and Chief Executive Officer Sunil Mathur said.

He added that Siemens continues to see strong order inflows in its smart infrastructure, mobility and energy segments, while order inflow remains weak in the digital industries segment.

The operating margin of the smart infrastructure segment rose around 400 basis points to 14.1 percent, as operating profit rose nearly 60 percent to Rs 277 crore. Revenues from the segment grew 14.5 percent to Rs 1,970 crore from the year-ago period.

Going forward, Siemens will try and maintain the current operating margin levels, Mathur said in a post-earning media call.

Operating margin of the mobility segment fell around 380 basis points to 2.6 percent, with operating profit falling 57 percent from the year-ago period to Rs 16 crore. Revenue grew 6.8 percent to Rs 616.8 crore.

Revenues from the digital industries vertical rose 7.7 percent to Rs 964.4 crore and profit rose 12.5 percent to Rs 90.8 crore.

The energy business clocked a revenue of Rs 1,486.5 crore and a profit of Rs 190.3 crore. In the year-ago period, revenue came in at Rs 1,518.1 crore and profit at Rs 158.5 crore.

The company's new orders stood at Rs 6,245 crore, an 18 percent rise from the previous year, when the company had booked orders worth Rs 5,288 crore.

Siemens is a technology company focused on industry, infrastructure, transport as well as transmission and generation of electrical power.