Why Did Siemens’ Net Profit Plunge Over 37% to Rs 408 Crore in the March Quarter?
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Synopsis
Siemens Ltd reports a staggering 37% drop in net profit, raising concerns in the tech industry. With ongoing challenges in demand and project delivery, the company grapples with rising costs and shifting market dynamics. What does this mean for Siemens' future?
Key Takeaways
- Net profit for Siemens fell to Rs 408 crore.
- Reported a 37% decline year-on-year.
- New orders increased by 44%.
- Challenges in Digital Industries sector persist.
- Future growth hinges on rising private capital expenditure.
New Delhi, May 13 (NationPress) Siemens Ltd, a prominent technology conglomerate, disclosed a significant decline of over 37% in its net profit, reporting Rs 408 crore for the January-March quarter, a drop from Rs 649 crore during the same period last year.
The company's revenue remained stable, influenced by the ongoing normalization of demand in the digital industries and standard project delivery schedules in its Mobility sector, as stated in its filing with the stock exchange.
The decrease in operational profit stemmed from under absorption and increased material costs within the Digital Industries segment.
Furthermore, profit figures were affected by an extraordinary gain of Rs 192 crore from property sales in Q2 FY 2024 and demerger expenses totaling Rs 63 crore in this quarter, as noted by the company.
Siemens operates on an October-September financial cycle, making the January-March period its second quarter (Q2).
“Despite the challenging macroeconomic landscape, our Order Income surged by 44%, propelled by our mobility and smart infrastructure sectors, which are witnessing ongoing public capital expenditure on infrastructure,” stated Sunil Mathur, Managing Director and Chief Executive Officer of Siemens Limited.
Siemens, a leading entity in technology centered on industry, infrastructure, and mobility, indicated that the short-cycle Digital Industries segment continues to face challenges from subdued private capital expenditure.
“As private capital expenditure increases both locally and globally, the demand for automation and digitalization solutions is expected to rise, as technology has proven vital for sustainable growth in industry and infrastructure,” noted Mathur.
During the March quarter, new orders soared by 44% to reach Rs 5,305 crore, while the order backlog increased by 7%.
In the previous quarter (Q1), Siemens reported a 21.5% year-on-year growth in net profit, totaling Rs 614.6 crore, compared to Rs 505.7 crore during the same period in FY24.
Point of View
The drop in Siemens' profits signals potential turbulence in the tech sector. While the company has shown resilience with a rise in order income, the challenges it faces underscore broader economic uncertainties. It's crucial for Siemens to adapt swiftly to maintain its leadership in the industry.
NationPress
22/07/2025
Frequently Asked Questions
What caused Siemens' profit drop?
The decline in profit was primarily due to under absorption, higher material costs in the Digital Industries business, and extraordinary gains from previous property sales.
How does Siemens' profit compare to last year?
Siemens reported a net profit of Rs 408 crore in the January-March quarter, down from Rs 649 crore in the same quarter last year.
What are Siemens' future prospects?
As private capital expenditure rises, Siemens expects an increase in demand for automation and digitalization solutions, crucial for sustainable growth.
