Siemens Qtr Profit Up 74% at Rs 896 Cr - Demerger & Expansion

New Delhi, May 14 (PTI) Technology firm Siemens Ltd on Tuesday posted nearly 74 per cent rise in March quarter profit after tax at Rs 896 crore, mainly on the back of higher revenues.

The company, which follows October-September financial year, had logged a profit after tax (PAT) of Rs 516 crore in the year-ago quarter, Siemens said in a statement.

The company said it received new orders worth Rs 5,184 crore.

Revenue during the quarter stood at Rs 5,248 crore, a 19 per cent increase over Rs 4,400 crore in March quarter 2023.

Managing Director and Chief Executive Officer Sunil Mathur said the second quarter showed a robust growth in revenues built off a strong order backlog.

Some large orders have been deferred. There has also been a slowdown in ordering of industrial automation products due to normalization of demand following shorter delivery cycles, he stated.

"Our growth in profits include volume and price effects, continued productivity measures as also gains on account of sale of property and dividend received from subsidiaries. Overall, our Q2 FY 2024 results reflect the continued robustness in the economy led by Government spending in infrastructure, which has resulted in increased capacity utilization and the beginning of capacity expansions by the private sector," he said.

The company's board approved a proposal to demerge its energy business into a separate legal entity – Siemens Energy India Ltd (currently a wholly- owned subsidiary of Siemens Ltd).

Siemens Energy India will be subsequently listed and mirror the shareholding of Siemens Ltd, upon the receipt of requisite approvals.

While Siemens Ltd will continue to be a leading technology-focused company in industry, infrastructure and mobility, Siemens Energy will provide solutions across the entire energy value chain – from power and heat generation, transmission to storage through a portfolio that includes conventional and renewable energy technology.

As per the scheme of arrangement, shareholders of Siemens Ltd will receive 1 share of Siemens Energy for every 1 share of Siemens Ltd.

The new entity will subsequently be listed on the BSE and NSE.

The demerger will lead to the creation of two strong and independent entities which are able to better address their respective markets and customers with a more focused approach.

Mathur said the demerger will enable both companies to pursue their specific strategies, focus on their core portfolios and take decisions on capital allocation.

This will enable the full value of each of the businesses to be unlocked for the benefit of the shareholders, he added.

The process of demerger, including receipt of requisite approvals, and subsequent listing of Siemens Energy India is expected to be completed in 2025.

Siemens Ltd also announced the expansion of two of its 32 factories in India.

The board has approved an investment of around Rs 519 crore towards capacity addition at Gas Insulated Switchgear Factory, Goa and Metro train manufacturing facility, Aurangabad.

This is in addition to the capacity expansions of the power transformer factory in Kalwa and vacuum interrupter factory in Goa announced by the company in November 2023. With this, total capex investment is expected to exceed Rs 1,000 crore, it stated.

Siemens' Smart Infrastructure Business is expanding its factory footprint in Goa in order to meet the rapidly increasing need for critical components of the industry, infrastructure and power distribution sectors. The total investment will be Rs 333 crore and this will be the largest investment by Siemens in Goa.

The factory will bring to market state-of-the-art Gas Insulated Switchgear and Clean Air GIS (Blue GIS) technologies. These products will help customers in sectors such as data centers, metro rail, oil & gas, steel, transmission & amp; distribution to meet their sustainability goals.

To address demand of growing metro rail networks globally, Mobility Business is investing Rs 186 crore to build a metro train manufacturing facility at Aurangabad.

This is in addition to the existing bogie manufacturing facility at the same location. This facility will be equipped with the latest technologies, locally procured components and skilled technical workforce, and can adapt to changing customer requirements.

Going forward, the facility will play a key role as an export hub for metro turnkey projects.

Siemens Ltd is the flagship listed company of Germany-based Siemens AG, in India. As of September 30, 2023, Siemens had revenue from continuing operations of Rs 17,701 crore and 8,888 employees.