X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Siemens: Problems persist - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jul 19, 2001

    Siemens: Problems persist

    Siemens India Limited has recorded a 49% decline in its 3QFY02 net profit to Rs 76 m. This was despite a 22% growth in the company's topline. Higher taxes were the primary cause of this depressed bottomline in the 3QFY02.

    (Rs m) 3QFY01 3QFY02 Change 9m FY01 9m FY02 Change
    Net Sales 2,316 2,815 21.5% 7,317 8,086 10.5%
    Other Income 143 132 -8.2% 466 476 2.1%
    Expenditure 2,204 2,725 23.7% 7,001 7,782 11.1%
    Operating Profit (EBDIT) 112 89 -20.3% 316 305 -3.7%
    Operating Profit Margin (%) 4.8% 3.2%   4.3% 3.8%  
    Interest 9 4 -55.2% 26 15 -42.2%
    Depreciation 79 71 -9.8% 237 222 -6.2%
    Profit before Tax 168 146 -13.1% 520 543 4.5%
    Tax 20 70 250.0% 35 82 134.3%
    Profit after Tax/(Loss) 148 76 -48.7% 485 461 -4.8%
    Net profit margin (%) 6.4% 2.7%   6.6% 5.7%  
    No. of Shares (eoy) (m) 35.5 35.5   35.5 35.5  
    Earnings per share* 16.6 8.5   18.2 17.3  
    Diluted Earnings per share* 16.6 8.5   18.2 17.3  
    *(annualised)            
    Current P/e ratio   23.3     11.5  

    Siemens India is a 51% subsidiary of German engineering behemoth Siemens AG. In India, Siemens manufactures automation systems, components, medical equipment, motors and drivers, power generating equipment and switchgears. It derives 40-45% of revenues from standard products (automation, ancillary equipment). The balance is split between power projects, industrial projects and switchgears.

    The company's expenditure grew at a faster clip than sales and thus resulted in a 160 basis point decline in operating margins during the quarter. Siemens tax provisioning went up by 250% during the quarter. The profit before taxes declined by only 13%, but the taxes hit Siemens hard. The company has not explained the reason for this sudden tax jump.

    On a consolidated nine month period, Siemens recorded an 11% growth in topline and a marginal decline of 5% in bottomline. Here too, the company bore the brunt of tax effect.

    To Siemens credit the company's debt pruning exercise led to lower interest burden. Its depreciation provisioning has also come down.

    The Siemens board approved a proposal to buyback equity shares from the open market not exceeding 25% of the existing paid-up capital of the company, at a buy back price not exceeding Rs 250 per share and a buy back consideration not exceeding Rs 805 m. The maximum buyback offer price is at a 26% premium to the current market price.

    At the current price of Rs 199 the stock trades at a P/E multiple of 12 times its nine month annualised FY02 earnings, which is on the lower side. But given the company's topsy turvy performance in each quarter, the uncertanity in the minds of investors is likely to continue. The company has shown promise by retiring its debt and by initiating a VRS scheme. But unless the company shows steady topline and bottomline growth, valuations are unlikely to go anywhere but up.

     

     

    Equitymaster requests your view! Post a comment on "Siemens: Problems persist". Click here!

      
     

    More Views on News

    BHEL: Margins Dip into the Negative (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The company also saw order inflows of Rs 18 billion during the quarter, which was a massive 41% YoY lower than the previous year's quarter.

    Cummins Ltd: Domestic Revenues the Saving Grace (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The domestic economy continues to grow largely in areas which are positively impacted through continuing government investments in infrastructure.

    ABB: Large Orders Remain Muted (Quarterly Results Update - Detailed)

    Aug 2, 2017

    Decisions on government initiatives and private investments were stalled in anticipation of upcoming tax restructure.

    L&T: Amidst a Challenging Business Environment (Quarterly Results Update - Detailed)

    Aug 1, 2017

    Bank credit to industry remained muted and investment momentum was driven mostly by public sector spending.

    L&T: Private Sector Capex Remains in a Tizzy (Quarterly Results Update - Detailed)

    Jul 24, 2017

    Vast majority of private players remain more concerned with debt payback rather than starting new projects.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    SIEMENS SHARE PRICE


    Aug 17, 2017 (Close)

    TRACK SIEMENS

    • Track your investment in SIEMENS with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    SIEMENS - FINOLEX CABLES COMPARISON

    Compare Company With Charts

    COMPARE SIEMENS WITH

    MARKET STATS