The market was not too enthused with the Q1 performance (year ending on 30th Sept) of Siemens though, on the face of it, net profit at Rs.634 crore is up almost 10 times over previous Q1. This is despite the 9% (YoY) drop in net sales at Rs.2141 crore. What really boosted the net profit to this level is the profit it booked on sale of its subsidiary at Rs.705 crore. If we were to remove this exceptional gain, profit as a percentage of revenue, increased from 3.4% in Q1 2014 to 6.1% in current Q1.

Cost cutting measures did bear fruits and this ensured that operating costs were 96% of net revenue earned v/s 98% in previous Q1. Other income of Rs.30 crore, up over 4 times also helped. The company’s tax outgo also rose during the current Q1 from Rs.33 crore to Rs.231 crore and this was on account of the Rs.177 crore tax it had to book on the profit it earned from sale of its subsidiary.