Siemens

Siemens acknowledges the impact of the West Asia conflict and volatility in commodity prices and Rupee depreciation, which are expected to influence inflation. Despite these concerns, the company observes a continuing growth story in India, with sustained private and public CapEx. The India-EU FTA is anticipated to bring significant opportunities for exports, potentially impacting GDP by 0.5% to 1% over the next few years, and is expected to reduce import costs for Siemens in certain segments.

For Q6 FY26, Siemens reported strong new orders of ₹6,730 crores, a 33% YoY increase, and revenue of ₹4,620 crores, up 14.6% YoY. The order backlog grew by 9.3% to ₹45,000 crores. However, profitability was challenged, with EBITDA declining to ₹450 crores from ₹510 crores in the prior year, and the EBITDA margin contracting by 290 bps to 9.7%. Profit before tax also decreased by 13.6% to ₹460 crores.

Digital Industries saw new orders of ₹970 crores (up 1.4%) and revenue of ₹1,150 crores (up 14.35%), but EBITDA margin was 2.6% due to Euro appreciation. Smart Infrastructure delivered strong growth with new orders of ₹2,960 crores (up 17.6%) and revenue of ₹2,580 crores (up 14.5%), though material costs impacted its 6-month EBITDA margin (15.1% vs 16.2%). Mobility demonstrated significant momentum, with new orders soaring by 75% to ₹2,800 crores and revenue increasing by 12.7% to ₹830 crores, supported by timely project execution and economies of scale, improving EBIT to 7.6%.

Increased material costs and Euro depreciation were primary drivers of margin pressure. Material cost as a percentage of revenue rose from 69% in Q2 to 74% in Q6. The Euro depreciated by 18% against the INR, and commodity prices for silver and copper increased by 160% and 45% respectively. While the company has implemented two price increases in DI and SI, the full impact is realized with a 3-4 month lag, and not all increases can be passed on due to market competitiveness and short-cycle product nature. Long-term contracts, particularly in Mobility, include price escalation clauses.

Siemens continues its focus on localization, with the MV switchgear and vacuum interrupter plant in Goa nearing completion. Localization efforts are also ongoing in Digital Industries and continuously in Mobility for signaling, rolling stock, locomotives, and bogies. The company is examining expansion requirements for its mobility factories in Nashik and Chhatrapati Sambhajinagar to support the growing order backlog. The sale of the low-voltage motors business is on track for completion in June 2026 as part of portfolio optimization.

The company's order backlog stands at a record ₹45,000 crores, up 9.3% YoY, providing strong revenue visibility for future quarters. Key orders include an ₹1,800 crores export order for bogies, traction motors, and gearboxes, to be executed over 2029-2039. The Data Centre segment represents 12-15% of the order book and is identified as a major growth area, with Siemens positioned as a leading player in electrification and integrated building management systems for this sector.

Cash flow was lower this quarter due to increased inventory levels, partly attributed to safeguarding customers amidst the West Asia crisis, and higher accounts receivable. The latter resulted from revenue recognition in mobility projects where invoicing had not yet occurred. Management stated that while cash is lower, there are no critical concerns regarding receivables, and they expect better cash flows going forward^⏳, though long-term contracts in Mobility could structurally impact working capital cycles.