The industrial manufacturer posted a 17% rise in quarterly revenue to ₹5,734 crore, with sales expanding across smart infrastructure, mobility, and digital industries units. Operational execution also helped trim net working capital days from 79 down to 74 during the period. Nevertheless, higher raw material prices lowered Ebitda margins by 150 basis points to 10.9%. While selective price hikes offered minor sequential relief, competitive bidding on major contracts and currency swings continue to threaten future profit margins.
Key points
Expanding private capex and steady infrastructure allocations have provided the company w…: Expanding private capex and steady infrastructure allocations have provided the company with multi-year revenue visibility through its massive order book.
Profitability continues to face downward pressure from rising input prices, pulling divis…: Profitability continues to face downward pressure from rising input prices, pulling divisional Ebit margins down to 7.5% in mobility and 5% in digital industries.
Persistent margin recovery remains vulnerable to aggressive project bidding, foreign exch…: Persistent margin recovery remains vulnerable to aggressive project bidding, foreign exchange volatility, and possible broad capex slowdowns.
Sources checked by our analysis pipeline: 1
Siemens’ strong order pipeline in the September quarter (Q2FY27), healthy execution and improving sequential margins suggest that the capital expenditure cycle is gathering momentum. But rising input costs weighed on profitability, raising questions about how much of the growth opportunity can translate into earnings.
Consolidated Q2 revenue increased 17% year-on-year to ₹5,734 crore, with broad-based growth taking it ahead of analyst estimates. The smart infrastructure business led the way, clocking 20% revenue growth to ₹3,281 crore. Mobility and digital industries grew 14% and 8% to ₹1,291 crore and ₹1,150 crore, respectively.
Growth drivers
Smart infrastructure is expected to maintain its momentum, as investments in power distribution, grid modernisation, renewable energy integration and data centres create a favourable demand environment. Battery storage, electronics manufacturing and EV charging infrastructure offer additional opportunities.
Motilal Oswal Financial Services expects the segment to clock a 17% revenue CAGR over FY26-FY29, with Ebit margin ranging between 11% and 14%. As the segment gradually transitions from a hardware-centric business towards a solutions-led one, with a greater contribution from value-added products, software and services, Nomura expects its Ebit…
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