Higher raw material prices and logistics expenses impacted the earnings performance of Siemens Ltd for the September quarter. Revenue up 14% year-on-year (yoy) 4,000 crore, but on a two-year CAGR basis, revenue was flat, analysts said.
CAGR is short for Compound Annual Growth Rate.
EBITDA fell 5% annually and EBITDA margin fell 200 basis points to 10.7%.
Ebitda is short for earnings before interest, taxes, depreciation and amortization. One basis point is one hundredth of a percentile.
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Responding to earnings, the company’s shares fell by more than 5 per cent on the National Stock Exchange in early deals on Thursday.
The Ebitda margin missed the consensus estimate of 12.6%. Analysts at Nomura Financial Advisory & Securities (India) Pvt Ltd say higher commodity prices are major downside risks for the stock. Ltd. said in a report.
However, a bright spot in the company’s weak earnings performance was its strong order book. Company’s order flow grew 5% year-on-year 3,380 crore, but moderated sequentially. stood on its order book 13,500 crore, which is at an all-time high.
In addition, its order book/revenue ratio was 1 times. The company’s management said it expects an uptick in private sector orders to support order inflow growth.
Analysts at Motilal Oswal Financial Services Ltd said, given the rich valuation of the stock, strong order flow is imperative for its future outlook. According to the brokerage house, the stock has revalued sharply in anticipation of a capex recovery, but fails to account for margin pressure in the trade. “The company needs to continuously surprise on order intake to meet revenue growth expectations,” the report said.
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