Engineering and capital goods major Siemens Ltd reported a 39% fall in net profit year-on-year in the March 2020 quarter at ₹172 crore, as revenue declined 21% to ₹2,738 crore over the same period. The company attributed the decline in revenue to a slowdown in the business cycle and deferred offtake by customers.
The company’s order backlog stands at ₹12,547 crore.
The company said that the covid-19 pandemic and the national lockdown in India has hit short-cycle businesses while there has been a prolonged weaker demand in large infrastructure projects.
“With the slowdown in the economy being accelerated and accentuated by the sudden impact of the Covid-19 crisis, capital expenditure spending reduced dramatically in the current quarter," Sunil Mathur, MD and CEO, Siemens Ltd, said. “A gradual slowdown in the operations of our customers and supply chain was already visible from February. With the announcement of the lockdown, all our factories, project sites and offices were shut since the last week of March, resulting in a steep drop in revenue for the quarter. Currently six of our factories have reopened with limited operations and a further two are expected to be opened this week."
“While we continue to optimize our operations to meet the rapid changes in the economic environment, our performance in the coming quarters will be influenced greatly by a lifting of the lockdown. In the meantime, we have seen a heightened interest from our customers to find digitalization solutions to enable them to reduce their capital expenditure requirements, save cash and increase their productivity," Mathur said.