Siemens Q2 Review - In-Line Earnings; Margin Surprises: Motilal Oswal
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Motilal Oswal Report
Siemens Ltd.’s Q2 FY21 revenue growth of ~28% YoY suggests gradual recovery – as the two-year revenue compound annual growth rate came in flat.
Gross margins contracted YoY, while Ebitda doubled – aided by lower employee costs (down 11% YoY) and other expenses (down 33% YoY).
Adjusted for strong cuts in other expenses (7.3% of sales versus 13.8% in Q2 FY20), the margin trend seems to be under pressure and needs monitoring over the next one to two quarters.
Other income declined 33% YoY to Rs 540 million, despite a healthy cash balance, suggesting the impact of declining interest rates on excess cash on the balance sheet.
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