SIEMENS LTD Results Analysis By S.P.Tulsian

If the Q2 performance of Siemens had disappointed and had borne the brunt of the transition, the financial performance for the third quarter ended 30th June 2008, indicates that the company has slowly but surely absorbed this change.

For Q3, net sales of the company rose, YoY marginally by 1.54% but QoQ, there has been a 15% fall. This is again because the company’s revenue reflects the discontinuation effects of the automotive, building technologies and information and communication business. Communication & Building Technologies businesses were transferred to separate Siemens companies and Automotive Business was sold as part of a global deal. The key volume drivers were power (46% of the net sales), automation & drives (26% of the net sales) and industrial solutions & services business segments (16% of the net sales). Healthcare contributed 8.3%, transport around 8% and real estate 0.75%.

New orders for Q3 witnessed a healthy rise of 18% amounting to Rs.2078 crore. This included a mega order of around Rs.3790 crore and industrial solutions & services and automation & drives businesses got the main orders. Unexecuted order value position for Q3 was at Rs.9846 crore.

YoY, EBIDTA was up 122% at Rs.267.05 crore. PBT was up 117% at Rs.262 crore. Profitability was driven mainly by power and industrial solutions & services businesses. PAT was up 107% at Rs.169.42 crore.

For the future, the company is confident of achieving consistent growth in Q4. The company’s expansion plans and attempts to increase localization is well on track. The fact that it has added 700 employees recently reflects this fact. The company, along with Siemens AG received a Rs.300 crore order from Delhi International Airport Limited (DIAL) for Terminal 3 Baggage Handling System at Delhi International Airport. The project is scheduled to be commissioned by March 2010.

The long outlook continues to look good and the transition pain is behind. Stay invested, it’s a sound company.
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