Siemens is a leading global firm offering technological and modernisation programmes to metallurgical industry like steel.
Siemens's share price has lost ground in the past few sessions following weak management commentary. The management indicated challenges to the growth outlook due to stagnant private capex and concerns over semiconductor shortages for digital industries. Government infra-spending may regain momentum from January 2025.
Both new and completed project values as of December 2024 remain below pre-pandemic levels seen in 2019.
Operating margins have been the primary driver of corporate earnings in India in recent quarters, despite revenue growth suffering from weak consumer demand. Companies across sectors have reported a sharp improvement in earnings before interest, tax, depreciation, and amortisation (Ebitda) margins over the past two years, benefiting from lower commodity and energy prices. Higher margins more than compensated for slower revenue growth, resulting in double-digit growth in net profit for five consecutive quarters.
Large and small businesses alike have delivered low-key performances.
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Net profit grew 25.4% in Q4 but revenue growth, lower at 8.5%, suggests lack of volume expansion.
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Q1 results indicate more pain ahead, as slowdown has spread to more sectors, pricing power has come down and rising interest cost is eating into profits.
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