Siemens focusing on small orders for growth: Mathur

‘Big government orders have not come in last four years’

(From left) Managing Director, Siemens Ltd., Sunil Mathur, Secretary in the Department of Industrial Policy and Promotion (DIPP), Amitabh Kant, Chairman, Infrastructure Leasing and Financial Services Ltd., Ravi Parthasarthy, Japanese Ambassador,Takeshi Yagi, Director General, CII, Chandrajit Banerjee, and Managing Director, Hitachi India Ltd., Ichiro Lino, after signing of an MoU in New Delhi on March 17, 2015. Hitachi India Ltd. and Siemens Ltd. on March 17 signed two separate MoUs with the Confederation of Indian Industry (CII) to form a consortium that would create pilots and replicate them throughout the country for setting up 100 smart cities. Photo: Ramesh Sharma

Even as big orders from the government have not come in the last four years and the country is getting into an election mode, Siemens Limited, the Indian arm of Germany’s Siemens AG, is focusing on smaller orders in value terms for business growth even as it is betting big on digitisation.

Admitting that large orders are difficult to come by, Sunil Mathur, MD & CEO, Siemens Limited, said “there has been a slowdown in large orders from both the private and public sectors. But sub-large orders are being tendered and their volumes are high, but in terms of ticket size they are still at the lower-end.

“There is lot of activity in sectors like the pharma, power transmission and distribution, automotive, food and beverages, among others where customers are looking for solutions to enhance efficiency,” he added.

Power sector

There are few opportunities in the power sector due to low plant load factor and stressed assets. However, the company expects business from ageing, inefficient power plants with super critical technology in the medium-term.

“Last 3-4 years years were difficult as the large tenders that were expected to come up did not come up. The country can’t grow at 7-8% when 30-40 GW of power plants are over 30 years old, reaching the end of their life cycles which need to be replaced. You cannot be sitting on it. It has to come in the next five years. The market is beginning to pick up,” said Sunil Mathur, MD & CEO, Siemens Limited.

In the infrastructure segment, the transmission capex is seen shifting from Power Grid to State-level transmission and distribution (T&D) utilities. Even in smart city segment, there is absence of large integrated orders as the tendering is based on packages (sub-stations, smart solutions etc).

The company last Sunday reported revenues of ₹ 3,939 crore for the September quarter, the highest in the last seven years. However, profit fell 55% to ₹279 crore as the company had reported an exceptional gain of ₹560 crore in the year-ago period on selling its land in Mumbai.

“With our focus on digitisation, our revenues have grown at CAGR of over 10% in the last four years and profit from operations grew at over 30%,” he added.