Siemens stock nosedived after it posted a set of dismal numbers for second quarter ended 31^st March 2013. The company’s net profit fell 90% at Rs.30 crore, down from Rs.298 crore posted in Q2 of previous year. This dent in the bottomline was due to the revision in estimated revenue cost and project-related provisions totalling Rs.91 crore. The provisioning was due to impairment loss or in simple terms, asset value erosion, which was incurred for the wind energy manufacturing facility. As against this, last year in corresponding Q2, it had a net credit of Rs.266 crore on this count. Its net sales also dropped 27% at Rs.2908 crore.

The chunk of the problem was on account of delay in project completion, which in turn led to increase in costs. In terms of segmental breakup, the infra solution segment showed a 61% drop in net profit while the energy and industry division incurred losses. The only segment to have posted a profit was healthcare, but it was small at Rs.1 crore compared to Rs.12 crore in previous Q2. Also last year, one has to understand that it had completed the big ticket projects of Qatar and Torrent and that had added on to the revenue; in comparison to that, this year, there was no real big time order executed. Talking about orders, its order is in complete contrast to the numbers – was up 52% (YoY) at Rs.2814 crore. This  means orders are coming back but it is delays in project completions leading to this hit on profitability. So unless project implementation does not take off, the company will remain under pressure.