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: Other income will save FY00 - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Aug 22, 2000

    Siemens: Other income will save FY00

    Siemens one of India's major engineering companies is all set declare its annual results on September 30, 2000. So lets take a look at what the future holds for it.

    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, ancilliary equipment). The balance is split between power projects, industrial projects and switchgears. Thus about 70% of revenues are vulnerable to economic fluctuations.

    The company suffered losses in FY97 and FY98, as it was plagued by very high interest costs. By FY99 however, the company managed to reduce its interest burden, but its turnover became more or less stagnant. In FY99, the company managed to report a profit largely aided by its other income.

    Taking its first three quarters till June 2000 this year as base, we estimated the company's FY2000 results. The results again reiterate Siemens dependence on the other income to save the day.

    (Rs m) FY99 FY00E Change
    Sales 10,834 9,590 -11.5%
    Other Income 512 813 58.8%
    Expenditure 10,222 9,415 -7.9%
    Operating Profit (EBDIT) 612 175 -71.4%
    Operating Profit Margin (%) 5.6% 1.8%  
    Interest 283 34 -88.0%
    Depreciation 460 316 -31.3%
    Profit before Tax 381 638 67.5%
    Tax 30 42 40.0%
    Profit after Tax/(Loss) 351 596 69.8%
    Net profit margin (%) 3.2% 6.2%  

    Its FY2000 turnover looks set to take a hit of around 12%. Other income is likely to surge by around a whopping 60%. As a result, its operating profit has shrunk, but its net profit has surged.

    Valuation Statistics
    No. of Shares (eoy) (m) 28.4 35.5
    Diluted number of shares (m) 35.5 35.5
    Diluted Earnings per share* 9.9 16.8
    *(annualised)    
    P/E Ratio (based on current price) 35.9 21.1

    Based on the current price of Rs 355, the stock is available at 21 times its FY2000 expected earnings. The company historically trades at a P/E multiple of 35 to 40 times its earnings. From this perspective the stock looks attractive, but so do many of the leading old economy stocks.

    Siemens turnover is in the stagnant phase. Until its turnover treads the growth path, prospects do not look too bright. But, if investment in power sector picks up the company is likely to benefit from this. Also, Siemens industrial automation division is one of the potential high growth areas. But until that clicks, its the same old story.

     

     

    Equitymaster requests your view! Post a comment on "Siemens: Other income will save FY00 ". 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

    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.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    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.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    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 22, 2017 12:25 PM

    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 8-QTR ANALYSIS

    Detailed Quarterly Results With Charts

    COMPARE SIEMENS WITH

    MARKET STATS