The share price of Siemens rallied over 9 percent after the company reported its September quarter earnings. The stock jumped as much as 9.28 percent to an intraday high of Rs 1,488.90 apiece on the BSE.

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The German technology major reported a marginal 4.7 percent fall in net income to Rs 333 crore for the September quarter, due to the lockdown that led to underutilization and a resultant loss of Rs 285 crore.

The company follows an October-September financial year and reported a dip in revenue and profit for the full year to September.

Income declined to Rs 10,179 crore from Rs 13,394 crore, pulling down net income to Rs 765 crore from Rs 1,068. Revenue fell 9.2 percent to Rs 3,422 crore for the quarter, while new orders grew 8.7 percent to Rs 3,220 crore.

Global brokerage Jefferies maintained an 'underperform' rating on the stock with a target of Rs 900 per share.

Jefferies said the company’s Q4 EBITDA was above its estimates due to higher revenues, while other expenses were down 29 percent YoY.

The gross margins improved 211 bps YoY, despite a 9 percent YoY revenue decline, while order flow was up 9 percent YoY and debtor days up 22 percent YoY. The details of Q4 margin sustainability will be keenly watched, Jefferies said.

Siemens' management led by managing director and chief executive Sunil Mathur guided towards better days as more areas of the economy come out of the lockdown restrictions and government orders, a key component of its business, begin to flow into the system. Also, there is a steady increase in orders from the private sector.

“A major part of the year was impacted due to the pandemic. Effectively we lost a quarter of our business. But we managed to close the year better than expected on the bank of many orders from the state government for drinking water and sanitation as well power transmission orders,” Mathur told.

The company recommended a dividend of Rs 7 per share of Rs 2 each for the financial year ended September 2020.

At 10:45 am, the shares of Siemens were trading 8.25 percent higher at Rs 1,474.75 on the BSE.

(With agency inputs)

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