Siemens Q2 sales hit by GST, profitability improves, orders up 10%

Electrical goods maker Siemens Ltd reported an improvement in its profit margins, but underlying sales growth decelerated to 1.8% due to GST-related impact. The company usually posts 8%-15% growth in revenue.

Net profit also showed a decline as last year, the company had exceptional income related to the sale of a unit.

Revenue, on a reported basis fell to 3,205 cr from Rs 3,288 cr last year as it no longer shows certain taxes as part of its revenue.

New orders grew by 10.4% to Rs. 2,704 crore compared to Rs. 2,450 crore, reflecting an improvement in the overall economic outlook this year.

Order inflow tends to be crucial for the company, which is dependent on large contracts for the bulk of its sales.

Net profit fell to 624 cr from Rs 2,490 cr. However, last year’s net profit had seen a boost of 2,992 cr from the sale of a unit. This time, exceptional income was only 560 cr.

Profit before exceptional items and taxes jumped 10.5% to Rs 328 crore due to an improvement in operating margins.

Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Ltd., said, “The Company delivered yet another strong performance. All Divisions contributed to the strong growth. We continue to focus on winning projects where the government thrust on spending is high, while addressing the digitalization opportunities in the market.”