Shares of Siemens fell 8% to Rs 2,099 on BSE during Thursday’s intraday trading on earnings booking after the company reported a 250 basis point (bps) drop in profit margin before interest, taxes, depreciation and amortization (ebitda) of 10.4 percent in the September quarter (Q4FY21) compared to 12.9 percent in Q4FY20 impacted by higher other expenses, gross margins.
The company has recommended a dividend of Rs.8 per share of Rs.2 each (400%) for the financial year ending September 30, 2021.
The company’s stock engaged in the heavy electrical equipment sector fell 14% from its 52-week high of 2,438.50 rupees reached on November 10, 2021. It had hit a 52-week low of 1,357, 55 rupees on November 25, 2020. In comparison, the S&P BSE Sensex was down 0.09% at 58,290 at 09:26.
In Q4FY21, the company’s revenue grew by 21.1% year-on-year (YoY) to Rs 4,296 crore, driven by strong performance in key Digital Industries and Infrastructure segments smart. Reported profit after tax (PAT) declined by 4.2% year-on-year to Rs 321.6 crore, due to higher raw material and logistics costs.
Siemens said the company’s order book reached an all-time high of Rs 13,520 crore. During the quarter, the company reported a 4.9% increase in new orders from continuing operations to Rs 3,378 crore from Rs 3,220 crore in the same period last year.
As public investment in infrastructure continues and capacity utilization levels increase, management believes that tendering for private sector capital spending will resume in the coming months. This will give further impetus to the company’s continued strategy of profitable growth, he added.
“Siemens delivered a decent performance despite pandemic-related challenges and rising raw material costs. The smart infrastructure and digital industries segments saw strong growth from 2020 levels. further strengthened the already strong order book. Overall, Siemens is expected to further strengthen its leadership position through increased penetration of automation and digitalization products and services across all segments,” ICICI Securities said in a statement. note.
“The company is poised to benefit from this in the long term, thanks to the niche activities of industrial automation and digitization. However, the revaluation of the stock has been quite abrupt and does not take into account the growing reliance on strong order inflows as well as margin risks in the business,” said Motilal Oswal Financial Services.