Siemens India, a part of German capital goods major Siemens, said its revenues in the past fiscal have been driven by smaller-ticket orders and new services around digitisation and automation.
Siemens Ltd has earlier this month reported a 25 per cent growth in revenue from ₹3,142 crore in FY17 to ₹3,939 crore for the fourth quarter of 2018 fiscal (Siemens Ltd follows October-September financial year). Its net profit dipped by 55 per cent to ₹279 crore due to an exceptional gain of ₹560 crore in Q4 FY17, although after adjustment for the exceptional gain, the profit grew 39 per cent.
The company’s sales and profitability in the past two years has been mainly driven by a $520 million high-voltage direct current (HVDC) transmission system order from Power Grid Corporation of India (Powergrid) bagged in May, 2017 in consortium with Sumitomo Electric. Siemens’s share in the order translates to nearly ₹1,700 crore.
However, according to Sunil Mathur, MD and CEO, Siemens Limited, the large public orders similar to HVDC order “are not happening any more”.
Instead, Siemens has seen significant pick up in smaller orders across verticals. The company has recorded 38 per cent new orders growth to ₹3,720 crore during the fourth quarter of FY18 compared with ₹2,694 crore in the same quarter last year.
“Private sector capex is beginning to pick up, especially in sector like automation, food processing, pharmaceuticals,” said Mathur.
He added that more companies, including SMEs, are willing to adopt digitisation in order to improve operating efficiency, safe energy costs and increase productivity. Hence, to continue delivering profitability in the overall dull capex scenario, Siemens has relied on offering the market its digitisation and automation innovations for industry and infrastructure, including additive manufacturing and artificial intelligence.
Power sector
In the power sector, which has traditionally been the key growth driver for the company, the company has witnessed increasing orders for turbines for gas-based plants for captive use in cement, fertilisers and sugar industries as well as from distribution companies , Mathur added.
While thermal power has not seen much tractions due to overall stress, Mathur believes to cater to the growth in power demand in the country, stressed power plants would need to be revived while efficiency of existing power plants, too, would need to be improved. This provides Siemens with a good visibility for new orders.
“Supercritical technology will come in at some points in time, it may be 3-4 years away but we are moving in that direction because the country cannot grow 7-8 per cent and still have 30-40GW of electricity which are not available tin the system,” Mathur said .