Good morning. Welcome to the Siemens Limited earnings call for the quarter ended 31st March 2026. I hope you all are in good health and have seen the results that were announced on 26th of May. Before we start this call, let me give you a few instructions about the technology that we are using here. We are using the Microsoft Teams platform for the meeting. All of you are on mute, and the camera has been disabled. The meeting will start with a presentation by the management team of the company, followed by Q&A. Anyone who wishes to ask a question should use the Raise Hand option, and we will enable the microphone for the person in that order. After enabling the microphone at our end, the speaker must also enable it on their device and then start with the question.
In the interest of time, each one of you is requested to limit your question to maximum two. After the question is over, the speaker's microphone will be disabled. Moving on to the presenters, we have with us today Mr. Sunil Mathur , Managing Director and CEO, and Mr. Wolfgang Wurmning , Executive Director and CFO of Siemens Limited from the management team here. They will make a presentation on the performance of the company, post which we will move to the Q&A. Before I hand over to Mr. Mathur, please note that we are taking as having read the disclaimer statement that you can see in the presentation as slide number two, available on the website, and also currently on the screen. With that, over to you, Mr. Mathur.
Thank you very much, a warm welcome to all of you to our analyst meet today. We will structure this analyst presentation essentially in three parts. I will give a brief outline of how we see the macro scenario in the country and its impacts on Siemens, and some major events that have happened in the last quarter. Then I will hand over to Wolfgang to give a more detailed breakdown of the financials that have been released by the board a couple of days ago. Then I'll take it back and just summarize the presentations and key messages before we open it up for Q&A thereafter. I think it's fair to say that the macro scenario is known already. One of the key impacts on most financial results comes out of the West Asia conflict here.
Having said that, I would like to say we see very clearly a continuing growth story in India. We do not see a slowdown in private CapEx yet. We do not see a slowdown in public CapEx yet. Having said that, it is true that there have been major impacts in the last couple of months out of the sharp depreciation of the rupee and out of the volatility, extreme volatility, in commodity prices. The impact of both of these and the impact of the West Asia prices, of course, we believe will have an impact on inflation in the coming months. This is something that we're going to be watching very carefully.
Having said that, as I said, private sector CapEx continues to grow, not only in the new age technologies that we had earlier talked to you about in terms of semiconductors, batteries, and fuel cells, and so on, but also more in the traditional. We do see a growth in cement, steel, pharmaceuticals, et cetera, also happening during the last couple of months. There has been a pickup. I would not say we are yet at the peak on the private sector CapEx, but we definitely see a real pickup in the last couple of months coming out of the private sector CapEx there. Public CapEx pipeline in terms of roads, highways for us, railways, in particular data centers, private as well as public, major growth area for us. Also the railway pipelines are getting stronger.
We have more visibility in the tendering process of the opportunities that are out there. I think overall, from the demand perspective, we do not see a slowdown. Quite to the contrary, we see a pickup over there. What impact the strong depreciation of the rupee will have, the high increases in commodities will have on inflation, and consequently on interest rates, and consequently on ordering, we are not yet able to foretell. This is something over the next three to six months we will be watching very carefully. As also the India-EU FTA, which we believe will bring in huge opportunities for exports for our customers. For us directly, not so much of an impact. There will be some impact in terms of customs duties coming down once this agreement is signed off.
We believe for our customers, and therefore indirectly for us, there will be a huge impact coming out of that with, as we said, 0.5% to 1% impact on GDP over the next couple of years. Some areas during the quarter that we are particularly proud about is our increased focus on sustainability. We've been ranked as India's number 1 sustainable company in the engineering, electricals, and electronics sector. Something that we are very proud about. Following a lot of detailed work that we have done on Scope 1, Scope 2, Scope 3, we have been upgraded by all the 3 agencies that you see here. We will continue to keep our focus, not only internally, but also in talking to our customers, supporting our customers on their sustainability projects, because we have the technologies that can enable them to be more sustainable. Some other highlights during the quarter.
You've been following the 9000-horsepower locomotive project. We are proud to say that by 31st of March, we met the first contractual delivery dates of dispatching 40 locomotives from Dahod to the Indian Railways and have been fully paid for that in the meantime as well. The next two years will require us to deliver 80 locomotives a year, 80 in 2026 and 2027. It'll ramp up to 100 from 2028 to 2030, before we have to ramp up finally to 160 from 2030 to 2035. This is a good project. We are on track. We have been able to deliver, as we mentioned, over 90% localization in about two years. We are very satisfied with the progress over here. We also were able to receive an order from a leading semiconductor player for their OSAT facility in Gujarat.
This really demonstrates everything from designing the factory, designing the processes, to delivering automation system, the hardware, as well as the electricals. This is where we combine really the power of Siemens together by combining the portfolio elements that we have, software elements and hardware elements that we have in our Digital Industries business with the electrification portfolio that we have in our Smart Infrastructure business to provide a comprehensive solution that starts with software design of the product, design of the factory, design of the processes, then combine it with the hardware where we actually bring the electrification as well as the automation linked in with the IT/OT integration, and cybersecurity platforms that are required for the manufacturing facilities over here.
This is what we will really be focusing on moving forward is as a one tech company is combining the strength of all our businesses together to provide one technology solution across all our verticals to customers. The third one, of course, is another element of pride. We received an INR 18 billion order for the supply of bogies, traction motors, and gearboxes to the parent company, for onward use by them. Our bogie factory in Aurangabad is now part of the global network of factories of our Mobility activities. As you are aware, we have received multiple orders for export already by this factory. This is a large order that we have received as well. Will be executed over the period 2029 to 2039. This is basically product deliveries. It's not a project. This is basically product deliveries over a 10-year period, starting from 2029 onwards.
With that, I hand over to Wolfgang to give you more insights into the financials for the last period. Wolfgang, over to you.
Thank you, Sunil, and good morning, everyone. In today's call, I will provide you an update on the financial performance of Siemens Limited and its key businesses for Q6 , compared to the same quarter 12 months ago, as well as performance for 6 months ended March 26, same compared to the 6 months ended March 25. This quarter represents the final quarter of our financial year following the change of the October- to- September cycle to April- to- March. Now let me start with the headline. We delivered strong order intake and revenue growth despite global uncertainties. I will walk you through the consolidated performance, some key facts regarding our performance, the business segments, highlights for Smart Infrastructure, Mobility, and Digital Industries.
I will close with a look at the six months financials and details on the structure of our business. Now let me start with the highlights. First, order and revenue growth were strong, even as the macro environment remained challenging. Geopolitical uncertainty and economic volatility are impacting the economy. Despite these challenges, the company maintains a strong order backlog, also providing revenue visibility for future quarters. Second, on profitability, the key factor in this period, but also for the six months, was increased material cost, mainly due to external challenges of increased commodity pricing and foreign exchange. In addition, we have seen price increases for materials and purchased products from suppliers, which we couldn't completely pass on to the market. Third, on the portfolio topic, the sale of the Low Voltage Motors business is on track for completion in June 2026.
Now, Pete, let's take a look at the Q6 financials. Order backlog increased to INR 450 billion compared to INR 412 billion a quarter ago, 12 months ago, yes, an increase of 9.3%. New orders grew strongly to INR 67.3 billion, up 33% year-on-year, driven by Smart Infrastructure and Mobility growing double digits. Revenue increased to INR 46.2 billion, up 14.6%, all three businesses growing double digits. On profitability, EBITDA was INR 4.5 billion versus the INR 5.1 billion in the comparable period. EBITDA margin moved from 12.6% to 9.7%, down 290 basis points. As a result, profit before tax was INR 4.6 billion compared to INR 5.3 billion, down 13.6%. In summary, a strong growth in orders and revenue and negative margin impact driven mainly by impact from cost volatility, cost increases largely driven by commodity prices and foreign exchange.
Now I give you a little bit more details on the impact of the material cost increases. On this slide, I just want to point out two things. You can see very clearly the impact of material cost increases due to FX and commodity prices. In quarter two, the material cost was reported as 69% of revenue, and in Q6 , the number went up to 74%. When we take a look at the currency, the euro appreciated by almost 18.18% versus Q2 from an average INR 91 per euro to INR 107 per euro in Q6. Same thing, when we look at the commodities, we do see a similar picture. For silver, the price per kg went up from $1,000 to $2,700, an increase of 160%. For copper, the price per metric ton increased from INR 8,800 to INR 12,800 in Q6, a 45%+.
I want to make one point clear. Our operations continue to remain strong and resilient, our underlying margin remains robust. Our priority continues to be on a consistent, focused, and rigorous execution. The other important message is the following. We are managing our remaining costs very well. All costs other than the material costs went up only by 0.8% from Q2 to Q6. Looking at our profit before tax, you can see two effects, each one offsetting each other. On one hand, the other income in Q6 declined by INR 500 million, in Q6, we also had INR 500 million lower demerger expenses. Overall, the impact of commodity prices and the FX is significant, but our operational performance is still very strong. Now let me move to the individual businesses, starting with Digital Industries.
Digital Industries delivered a moderate order intake in Q6, supported by revenue growth through backlog execution and showed normalized profitability sequentially. In Q6, new orders were INR 9.7 billion, broadly flat, only up 1.4% versus INR 9.5 billion in the comparable period. For the six months ending 2026, new orders increased to INR 20.7 billion, up 17.1% in the six months period. Order growth was driven by strong demand in certain verticals like metals and mining, cement and food and beverage. Revenue in Q6 was INR 11.5 billion, up 14.5%, and very similar in the six months period, revenue was up 14.6%. As already said, also here, revenue growth was mainly driven by a strong order impact in Q5. The book-to-bill for Q6 was 0.84, meaning revenue exceeded orders in the quarter, while demand remained healthy in selected verticals.
Overall, we see the positive momentum in the market of Digital Industries to continue. EBITDA in Q6, 2.6% versus 5% in prior year. Due to the large share of products we purchased from Germany, we just see the significant impact from the EUR appreciation. As already pointed out, 18% cost increase just from the EUR appreciation. EBITDA margin for the 18- months period is 5.6%, and here we are close to the margin range we just told you in December meeting. Taking out the FX impact, we would be in the range of the 6.8% range we have communicated to you. Now let me move on to the Smart Infrastructure business. Smart Infrastructure delivered strong order in revenue growth, while also profitability declined due to higher input costs.
The Smart Infrastructure business is more sensitive to the development of commodity prices and partially to the euro- INR exchange rate. Due to the high share of local manufacturing, the impact of currency is less significant in the Smart Infrastructure business. In Q6, new orders increased to INR 29.6 billion, up 17.6%. For the six months, we grew to INR 60.6 billion, up 22.9%. Order growth was driven by customers in the area of power utilities, renewables, and the data center business. Revenue also went up. In Q6, our revenue was INR 25.8 billion, 14.5% up. For the six months, revenue was up 11.6%. Revenue growth was led by significant business out of the electrification and automation business, but also from our electrical products business.
Book-to-bill was 1.15, supporting backlog and also forward visibility. As already said, on profitability, the key driver of the decline was higher material cost due to volatile commodity prices. For the six months period, EBITDA declined by 120 basis points from 16.2% to 15.1%. Overall, Smart Infrastructure continues to deliver strong top-line momentum, with margins reflecting the volatile commodity and FX environment. Let me move to the third business, the Mobility business. Here, also Mobility continues to demonstrate strong business momentum. We have achieved major milestone with the delivery of the first 9,000- horsepower locomotives to Indian Railways. In Q6, new orders increased significantly to INR 28 billion, up 75%. For the six months ending March, new orders were INR 34.3 billion, up 42%. Also, revenue increased substantially.
Q6 revenue was INR 8.3, up 12.7%, and the 6 months revenue was INR 16.5 billion, up 20.4%. Revenue growth was primarily driven by the ongoing execution of the 9,000- horsepower loco project. Still, with the backlog we have, there is definitely a positive outlook with regards to revenue going forward. The book-to-bill of Q6 was 3.37, adding additional future revenue to our backlog. Sunil already mentioned the significant order in Q6 for work allocation for manufacture and supply of bogies, traction motors, and gearboxes. When it comes to profitability, we did see some slight increase of profit margin, and this was mainly supported by timely project execution, revenue growth, and resulting economies of scale. EBIT improved from 7.2% to 7.6%, an increase of 40 basis points.
The six months EBITDA went down from INR 8.2 to INR 6.4 as a result of FX and also business mix. In summary, Mobility business continues to manage operations well, with clear progress on key projects and improving underlying profitability. Now, the six months consolidated financials. Just a brief look at the performance comparison for the six months ended in March 2026. We have seen orders increasing to INR 115.6 billion, up 26.8%. Revenue increased to INR 84.5 billion, up 14.3%. EBITDA is INR 8.7 billion, slightly down compared to the prior six months. The EBITDA margin moved from 12.3% to 10.3%, down 200 basis points, reflecting the topic of commodity prices and foreign exchange. Profit before tax is INR 8.9 compared to INR 10.2, down 13%.
As already mentioned at the beginning, our order backlog stands at INR 450.3 billion. Again, the picture is consistent. Strong order intake and revenue growth and profitability impacted by external cost environment and FX. We delivered strong order intake and revenue growth across the company. Profitability was impacted by higher material costs, but our underlying operational performance remains robust. Smart Infrastructure and Mobility showed very strong momentum, and also Digital Industries showed stable demand with normalized profitability trends. Just to repeat, the Low Voltage Motors businesses remains on track for completion June 2026. Now I would like to close my presentation with a look at the structure of the business, just briefly comparing revenue mix across businesses, geographic and business dimensions. At a high level, the mix is stable year on year.
The share of revenue from business is pretty much stable, with a minor increase in the share of the Mobility business and a consequent decrease in the share of Digital Industries. The geographic split remains broadly consistent based on revenue, domestic sales are around 87%, and exports are about 30%. The business mix remains stable with regards to projects at about 30%-31%, and products and services at 69%-70%. More is also here, we do see a very stable business environment. With this, I close my presentation. Thank you for listening and give it back to Sunil.
Thank you very much, Wolfgang. Basically to highlight the presentation so far, we continue to believe that the economy is resilient. There are concerns, however, around inflation and the impact that inflation will have and the rupee depreciation and commodity prices, we will watch that very closely. Having said that, as we said, we do not see any slowdown currently as we speak, neither in the private CapEx nor in the public CapEx space. We are now at a record order backlog level with a long reach ahead of us. Our EBITDA, as Wolfgang mentioned to you, has been impacted by commodity prices and FX. That was primarily the main impacts to the EBITDA.
Of course, sustainability will remain a key focus for us as well as for our customers, and we believe that we have the technologies that can enable our customers to meet their sustainability as well as their digitalization requirements in an increasingly volatile world ahead. With that, we end our presentation. We'd like to hand it over to you for questions, which we will attempt to answer. Radhika, over to you to moderate the session.
Thank you. We will now start the Q&A session. As I mentioned earlier, please try and limit your questions only to two. We have the first question from the line of Mohit Kumar from ICICI Securities. We'll unmute you, and then you can unmute at your end and go ahead. You're unmuted, Mohit.
Yeah. Hi, am I audible?
Yeah. Can you speak a little loud?
Yes. I'll try to be loud. Thank you, and congratulations on a very strong order inflow. My first question is, will the margin continue to stay at current levels in DI and SI for couple of quarters? Because the prices are still at elevated level and the rupee is where it is. Do you believe this will improve our next three, four quarters, because we might still be locked in the fixed price contract for the orders already in place.
Mohit, we are not giving guidance on the future quarters. All that we can say, and that is going back to Wolfgang's earlier presentation to you, our price, our underlying margins continue to be strong, continue to grow. However, we are unaware and we cannot predict what the impact of foreign exchange and commodity prices will have. These we will reflect to you transparently as we have done this time as well, in terms of where we stand both on our DI and SI businesses. Our DI and SI businesses are largely short-term durations. We have some contracts in SI which are electrification that may extend over a year or two. Largely, they are short-term contracts. So the impacts that you will see will be more short-term impacts.
We don't have tied in long-term fixed prices.
Understood. My second question is, of course, we had a very strong ordering flow from the parent in the Mobility segment in the quarter. How should we think about further opportunity in metro from parent from a medium-term perspective?
As I mentioned before as well, metros is a huge opportunity for India first. Every city at some point in time will need metros. Not only one line, but multiple lines of metros. I think that is a huge opportunity for us, both on the rolling stock side, but also on the electrification and signaling side as well. Globally, the metro market is also doing well. As I mentioned earlier, we are part of the global supply chain of our parent. Whenever there is a suitable allocation that has to be done to us, we will receive those allocations as we receive for all our 25 factories here in the country.
Understood, sir. Thank you and all the best. Thank you.
Thank you.
Yeah. Thank you. We now move to Harshit Patel from Equirus. Harshit, you can go ahead. Yeah, Harshit, you're on mute.
Hi. Yeah. Am I audible?
Yeah, we can hear you now.
Thank you. Sir, my first question is on data centers. Could you comment on the data center exposure for both SI as well as DI businesses in terms of orders and order backlog? How are we positioned vis-a-vis competition, Schneider, ABB, Eaton, et cetera, in India? What would be our market share in the LV, MV electrification and the automation part of the DC CapEx?
Look, we don't monitor our portfolio by vertical. In other words, we are not able to provide you accurate information about how much LV, MV we are providing into data centers, how much integrated building management system we are supplying into them, et cetera. Suffices to say, we are competitive against Schneider and ABB as well on all the portfolios that we have, particularly in data centers. This is one of the fastest growing portfolio elements for us in the company overall. It is primarily an SI portfolio element or an SI vertical. Not too much of DI content for us, but it's mainly the electrification, as well as the integrated building management systems. To some extent, there is also software coming out of the DI portfolio, but that's not very material.
Understood. My second question is on CapEx. Could you highlight some of the CapEx programs that we are running in all three businesses? In the past, you have mentioned the MV switchgear portfolio and the vacuum interrupters for the SI business. Which are the more product lines that we plan to localize in the next two to three years? If you could guide on the total CapEx plan over the next two to three years, that will be helpful.
I will not be able to give you specifics about our strategic plans over the next couple of years. You're right, our Medium-V oltage and vacuum interrupter plant in Goa is nearing completion and we should be able to come to commercial production with those expanded capacities already. In DI, there is the first element of some localization that we have started with. In Mobility, we have continuous localization that is happening, but this goes more in the area of signaling and rolling stock. Rolling stock in the area of locomotives and bogies and so on, but this is an ongoing activity. As I said, we will continue to localize activities and increase our capacities based on market demand. That is something when we are ready to announce them, we will announce them after we get board approval for them.
Okay. Thank you. We move to the next question. Mahesh Patil from ICICI Mutual Fund. Mahesh, can you go ahead, please?
Yeah. Hi. Am I audible?
Yeah.
Yeah. In the presentation, we have mentioned some value adjustment for our 9,000- HP railway order. Can we get the exact order size of the INR 450 billion order book that we have of this railway order?
The large order that we have received recently, the export order is the INR 18 billion order that we have just received, which is in the order backlog. What is the question specifically?
After the value adjustments, what is the value of the order?
The current value of the order.
Yes, sir. The 9,000- HP order that we have in India, for that, we have mentioned in the presentation that there has been some value adjustment. Of the INR 450 billion overall order book, how much would that order be?
We will come back to you with this number. We don't have it offhand.
Okay. Okay, sir. My second question is on the margins. Given the price escalations, largely, how much portion of our, we can say contract in terms of percentage, roughly, will this cost be entirely passed through? Or how are the escalation clauses?
Well, are you talking in general or are you talking specific to any business?
No, sir. In general.
Look, we have had price increases across our businesses, both in DI and SI. There are two price increases that we have already passed on to the customer. Not all of it has stuck. We continue to try to pass on some parts to the customer. We don't have price escalation clauses because these are short cycle products. We manage that through price increase announcements that we do at regular intervals. Yes, there have been two price increases that we have announced across our DI and SI portfolio.
Okay, sir. Thank you so much.
We haven't disclosed the value adjustment numbers, Mahesh. We have the INR 26,000 crores that we announced initially. There are these regular value adjustments that keep happening in the contract as per the terms.
Okay, ma'am. Thank you so much.
Thank you. We move to the next question from Parikshit Kandpal at HDFC Securities. Parikshit, you are unmuted, you can go ahead now.
Am I audible now? Hello.
Yes, you are.
Hello. My first question is, sir, on this bogie order backlog in our order book of INR 45,000 crore. My sense is it should be close to about INR 23,000-INR 24,000 crore. How are we protected on price increases here? Do we have any PV clauses because this is a large part of the order book sitting in our order backlog.
Ulrich
In this contract we have price escalations covering the cost increases over the long period of time. What we usually have for long-term contract, we have escalation clauses, but also it depends on the competitive environment, and also on the customer in the terms of T&Cs , what he puts into his RFPs. It's really handled case by case.
For the bogie order or for the locomotive order, there is a Price Variation clause built into it with an index there as well.
Are we adequately covered because the kind of price increases we have seen? Are we fully covered or a part of that indexes are only covering a part of that, so we are not able to pass the entire cost through to the commodity increases?
I think the commodity increases. It's mainly commodity increases that is there. I think we're adequately covered.
Yes.
I confirm that we are adequately covered. Of course, there are always some remaining risk which could hit. From my perspective, at this point in time, we are well covered.
You're also seeing these value adjustments coming in, right, Parikshit?
Okay. Yeah.
Part of that would come for that as well. That's why I said that we don't give it away, the exact number, but those things are covered there.
All right. My second question is on data centers. Sunil sir, I just want to pick your brain here. We have hardly any installed capacity on data center side. Number goes anywhere between 1.5 gigawatts of IT load , and it is expected to go to 10 to 18 numbers, widely ranged. I just wanted to hear from you how's the inquiry book building out there. Are you seeing incremental RFPs coming for the large hyperscalers? How do you see this build-out happening over the next two, three years? Your own guesstimate how this capacity will move and how it will benefit us. What is the share of data centers currently in the order backlog? Some color on that will be helpful.
The maximum position, as you rightly said, 1.5 Going up to 9 is the official number right now. I believe this will probably go to 18- 20, as you said, in the next couple of years. We see a very strong push for data centers here in the country. It's one of our fastest growing businesses as well. A lot of conversion actually happening on the ground. Hyperscalers are ordering. Our position in this entire environment is strong. We are strong players in the electrification area. We can do simulations in data centers, and we can manage the entire electricity within the data center as well, including design the data center as well. These are the areas that we contribute to.
We see a strong growth coming in, both for our software business, which is outside of Siemens Limited, but also for our SI business, as I mentioned earlier. I do believe this is an opportunity or a sector that will grow much faster than it has been growing in the past. We are well positioned to take that opportunity.
What is the percentage in our order book for this now? If you color on that, how big this would be in our order book?
I think it's in the range of around 12-15. As I mentioned earlier, it depends again, when you look at it in terms of the order book, over there, it would probably be in the range of 12-15 or so.
Excluding the bogie order, right? I mean, excluding that large bogie order.
Let me think about that now.
That's INR 45,000 crores order book. Out of that INR 4,000 is a very big number. INR 4,000-INR 6,000 looks to be quite a bigger number.
No, it's probably excluded. We will get back to you on that.
Okay. Sure, sir. Thank you. Those are my questions.
Okay. We move to the next question. Jay Negandhi from Ambit Capital. You are unmuted, Jay. You can go ahead.
Am I audible?
Yes, we can hear you.
Great. Thank you. My first question was regarding the commodity inflation. I understand that we have taken two price increases. Would we get to see its benefit in the coming quarters with a lag? Does competitive pressure cap the magnitude of price increases? How does that affect the demand or order intake going ahead?
Look, you can do a price increase, but, first, it depends on what the customer is willing to pay. Second, it depends on what he's able to get from the competitor. Yes, being competitive, as well as the stickability with the customer does play a role. The price increases always have a lag effect. As I said, these are all short cycle businesses. The products that we are supplying today, once we announce a price increase, the impact of that is felt in three or four months later. Yes, we do expect that there should be an improvement in the underlying profitability. Of course, you can't pass on the complete increase of 20% foreign exchange and 50%-150% of copper and silver to the customer. Whatever we can, as we said, we've done it twice, and we will continue to do it.
All right. My second question would be that you said that railways and data centers are a growth driver for us. How are the other end markets shaping up? Could you give us some directional outlook on them?
Okay. Let's go business by business. If I look at our DI business and we look at chemicals, fertilizers, they are growing well. We will have to wait and see what the impact of the West Asia crisis is on fertilizers. Chemicals are doing well. Pharma is growing well. Food and beverages is growing well also. Automotive is beginning to pick up. Two-wheelers are doing much better than four-wheelers, the four-wheelers are also picking up as well. What else do we have? Which other verticals do we have? Power utilities. When I look at our SI business, we look at the power utilities, a lot of ordering happening in the entire electrification space. This is very clearly a large growth area, that is growing extremely well. Commercial buildings is a mixed story. We do see a lot of constructions happening over there.
The pace varies depending on which part of the country, but commercial buildings are also growing well, and by that I mean schools, malls, hospitals, educational institutions, stadiums, et cetera. The residential segment is also growing well. I think overall, we see in almost every segment that we are working in growth. Some slowdown in metals, in other words, in steel a little bit. We are not sure whether this is short-term or whether this is more systemic, but there's some slight slowdown in the last one or two months. I don't know whether this is more long-term or not. Other than that, cement is also doing well. Yeah, I think I've covered enough of the verticals so far.
All right. Thank you so much.
Okay. Thank you.
Those are my questions. All the best.
Thank you.
Thank you.
We have the next question from Bhavin Vithlani from SBI Mutual Fund . Bhavin, you can go ahead. Bhavin? Bhavin, you are unmuted. Okay. Maybe he can't hear us. We go to the next question. Renu Baid from IIFL. Renu, you are unmuted, you can go ahead.
Yeah. Hi. Morning, I hope I'm audible.
Yeah, Renu, we can hear you.
Sure. Good morning to you, I have a couple of questions. First, while, Sunil, your overall comments on growth and private sector were optimistic, if you look at the order inflow for the quarter, this being a March quarter for domestic market and ex of the bogie export order, inflows have actually declined year-over-year. Where do we see the gap up in terms of order flow finalization in the domestic market? Is it because of postponement around the Middle East war or there are certain segments which are not firing well and ex of these large orders and the FX adjustment or commodity adjustment which we had on the loco, what is the outlook on inflow trajectory from the domestic market over the next 12 months in your view?
The expected rebound in the private sector investment decisiveness, do you see that holding up well or it could be still on the sidelines? Along with this, if you can also throw some inputs in terms of government being fiscally challenged this year on multiple fronts. Do you see government sector ordering keeping up pace or that may soften a bit? That's the first part of the question.
Okay. That's a long question. Let me try and answer them, Renu. Yes, I am optimistic about the growth. If you see the overall presentation that Wolfgang gave, and break that down by the individual segments that we have got over there, our DI business grew at 1.5 % roughly, right? In terms of order income. This is again short cycle. I do not believe this is a reflection of the private sector CapEx right now. Overall, if you see for the year, for the six months, it's growing at 17%. I think it's just a quarterly impact and we shouldn't read too much into it.
Sunil, if I can get here.
Yeah.
The reason for the soft growth in Q6 was we did a price increase at the beginning of the Q6 , so customers just pre-ordered in Q5. I believe here we need to look at the 6- months revenue order growth, and with 17%, I believe it's pretty much okay.
Yeah. When I look at our SI volumes over here, this reflects what I was mentioning earlier in terms of the electrification business really growing well, 17.5% in the quarter, 23% for the 6- months. That's pretty robust. If I just take these two segments that cover a large part, the railways is the other part over there. Yes, there are large orders. The railways, you shouldn't look at individual quarters, I think. More important to look at it in terms of over 6- months or half or a full year. We have won orders for propulsion systems, for signaling, for electrification. That flow continues to come. The pipeline, as I mentioned, is very strong. Now, yes, you have a valid point in terms of the fiscal challenge and the impact that it could have on government ordering.
To be honest, we don't see that yet playing out in the areas that we are active in. Which is, if I look at government ordering from our perspective, it's either in the power utilities segment or it is in the railways. In neither of them, and power utilities is not central government, it's primarily state governments.
Yes.
We don't really see a slowdown happening there. The railway, the pipeline, as I mentioned, is deep and broad as well, both on the electrification as well as on the signaling and rolling stock. 24,000 kilometers of signaling has already been done, has already been ordered. We expect the rest to be ordered probably end of next year. Electrification and rolling stock, there are large opportunities that are already in the pipeline and a good flow that is coming. Looking at the future, as I said, I think some of the drivers that the government is going to have to look at is, how will the impact of the oil crisis play into the inflationary environment in the country? Will that have an impact on the depreciation of the rupee as well, that could give a challenge to the government in balancing the books.
Also then there could be the moment you get inflation going up, there could be impacts on interest rates, and that may impact ordering as well. As I said today, as we speak, we have no signs of any slowdown happening. There is slippage probably because of LPG here or LPG there. We don't see a slowdown because once you start a CapEx project, setting up a new factory or putting an infrastructure in place over there, it's not viable to stop midway. I think we do have visibility to that extent, both on public and private projects. Where we think that they will continue to go ahead. Moving forward three to six months, we will have to just wait and see how that pans out in terms of the rupee and in terms of inflation.
Got it. The second part of the question, can you just highlight in terms of, you have seen year-end slippage in the net working capital or the cash conversion cycles on books. Any particular pockets which has led to this increase or this is more transitionary for some large lumpy orders which were executed? Also, earlier, some of your footnotes in the previous quarter results mentioned that expansion of the Aurangabad facility was put on hold indefinitely. After we have won this bogie order, do we see any expansion on that facility resuming back? If I have not or misread something on this side, you can help clarify. Thank you.
I'll ask Wolfgang to respond to the first part and I said come back on the second.
On the cash side, there were two major developments. One is we increased our inventory levels, also based on the West Asia crisis, to safeguard our customers and also be able to continue with manufacturing and supplying to our customers. This is one reason why our cash is lower than we have seen in the past. The second reason, also due to the significant increase in revenue, especially towards the end of the quarter, we have seen accounts receivable, trade receivables going up. Because we do a lot of work in the Mobility environment, recognizing revenue but not sending invoices yet to the customer. Our contract assets are going up. These are the major reasons why our cash flow is lower than in prior periods. No area of concerns with regards to receivables.
Our overdues are stable and not at all at a critical level. Overall, I say it's the right thing to do at this point in time, and we will see going forward better cash flows.
As we see Mobility execution ramps up in volume terms, do we see this increasing in the current assets being slightly more structural, given the long dated payment cycle from the Indian Railways side?
It could be structural because of the long-term contracts, also now with the shipment starting for the locomotives, for example, we also send invoices to the customer for payment. I believe that they will level out. Yeah.
Got it.
On factory expansions, we are examining the expansion requirements for our Mobility factories, both in Nashik as well as in Aurangabad, in view of the order backlogs that we currently have, as well as the pipelines that we see coming up. We will come back in due course with further information around this.
Sure. Thank you, and best wishes team. Thank you.
Thanks, Renu. Thank you.
Thank you. Just in the interest of time, I will request everybody now to restrict your question to one, please. Bhavin is back online. Bhavin, would you like to go ahead, please, now? Bhavin Vithlani from SBI Mutual Fund. Bhavin, you are muted. No? Okay, I think we have some issue. We have the next question from Sumit Kishore from Axis. Sumit, you are unmuted. You can go ahead.
Yeah. Hi. Thanks for the opportunity. My first question is, we heard with interest that your order book ex loco has 12%-15% share from data center contracts. Just wanted to hear your thoughts on a per megawatt basis, on a very crude, what is the total addressable opportunity in INR million per megawatt that Siemens India can cater to? If you could quantify the megawatt quantum of inquiries that we are seeing in data centers. The targets are pretty lofty, but what is actually going around right now in terms of ordering? That's my first question.
Thank you, Sumit.
One second. Sumit, can you repeat your question, please? There were too many parts to it.
No, no. Look, we don't measure on the basis of megawatts and so on. I don't have answers to your questions, Sumit.
Okay.
We don't measure it on that basis.
How would you say, versus the medium term trajectory of 10+ gigawatt that is being talked about, what currently is actively in pipeline for discussions right now?
I don't have the answer to that, but I will get back to you on that.
Sounds good. My second question is, in relation to the locomotive contract, good to see the 40 loco delivery, you're talking about a 80 loco ramp up in the current fiscal year. What sort of operating leverage would be possible here? As you start booking the O&M income also, can you qualitatively tell us whether the margin profile of the locomotive contract as it evolves, would it be better than your ex loco Mobility margin profile? Something that could help us sort of appreciate the outlook here.
Sumit, I mentioned repeatedly in the past that this is a blended margins that we are doing, right? It takes into account the delivery of the loco as well as the O&M. The margins that we have are blended margins. The way we account for them are on percentage of completion basis. Right? What you see in the margins are linked to the inflow of cost, and we book the revenue based on inflow of costs.
Right. Would it be better than what you have been achieving in Mobility so far?
Oh, the margins are blended. What you see in the margins coming in, for the first 40 locos, for the next 80, the margins in absolute values will be proportionately adjusted. In percentage values, they will be at similar percentages.
Got it.
The real impact comes from the volume.
Got it. Thank you so much. Those are my questions.
Okay. Thank you. We move to the next question, which is from Rahul Gajare from Macquarie. Rahul, we have unmuted you. You can go ahead.
Yeah. Hi. Good morning. Am I audible?
Yeah, Rahul. We can hear you.
Yeah. Great. I have one question on the bogies. Could you help remind us the capacity of the Aurangabad factory for the bogies and this INR 1,800 crore order that you have got, which is for bogies, traction motor, and gear, is for how many bogies? You mentioned that this will be a part of the global factory. What does it really mean? Does it mean that Aurangabad will now become the first point for global orders anywhere in Siemens Group? That's the first question.
I don't have the installed capacity of Aurangabad factory offhand. We can provide this to you if that's important. As far as being a part of the global network is concerned, all our 25 factories in the country are linked into the global supply chain of Siemens AG. In other words, Siemens AG parent decides, based on orders it receives around the world, how much to allocate to which of their factories around the world. At some point, India gets an allocation, and that is what has happened in the INR 18 billion contract as well, as has happened in prior contracts for Budapest and so on as well, where they have allocated capacities to the Indian factory.
This happens, by the way, not only in the Mobility, but it also happens in our electrification factories in Goa and other parts of the country as well, where the global parent takes a call, how much to order from which factory around the world. We look at it from the perspective of do we have capacities to be able to deliver that, or do we need to expand capacities in order to deliver future demand?
Yeah. Now, with respect to what Renu asked earlier, with regarding the cancellation or deferment of CapEx for metro order. I think that was mainly because of delay in the domestic ordering. If you are now looking at removing it, are you getting some signs from the government that traction in metro orders is picking up, or you are now looking at mainly from the global perspective?
Our factories in Mobility, we've got factories in Aurangabad as well as in Nashik, and these are for propulsion equipment as well as for bogies. Yeah, Nashik does the propulsion equipment and the electrics of the bogies, and Aurangabad builds the bogies, right? These are the two areas we've received orders for this large order for supply of products to global. That may require an expansion of the existing capacities in Aurangabad as well as in Nashik. As I mentioned, we are looking into that, and we will come back once we are clear on a view over there, as well as once we are clear on a view of how the market for bogies and propulsion equipment plays out in the next couple of years. On the metro market, we are still looking at the domestic pipeline over there for rolling stock.
We are very active in electrification and signaling, but we are looking at the pipeline for metros, in terms of rolling stock, and taking a call based on that, whether it makes sense for us to build a factory or whether it makes sense for us to outsource or work or collaborate or find some other business model that gives us flexibility in view of the unclarity just now in the actual ordering pipeline versus getting more clarity in the future.
Okay, cool. With respect to imports, I know that DI is largely imported, and that therefore the low margin. Can you talk about the share of imports in the Smart Infra? Because this is where we have seen a sharp decline. I thought this was largely localized.
Yeah, it is largely localized. I think we're at 70%-75% localized in the Smart Infrastructure, and we continue to localize the remaining portfolio as well. As Wolfgang mentioned, the real impact in Smart Infrastructure is not out of foreign exchange. It is primarily out of commodities, which is copper and silver and aluminum, which is used in our factories. It's got nothing to do with export or imports. It is more linked to commodities.
Sure. Thank you very much.
Okay. Thank you. We have the next question from Mohit from Citi. Please limit your question to one. Mohit? You're unmuted, you can go ahead. Mohit? Mohit Pandey from Citi. Mohit, you have to unmute yourself. We move to the next question, from Atul Tiwari from JPMorgan.
Yeah, sir. Am I audible?
Yeah, Atul. We can hear you.
Yeah. Sir, these price hikes that you mentioned, when they were taken, were they taken after March month got over, and hence the impact is yet to be reflected?
No, one was taken prior to March and one is being taken post-March. Again, as I mentioned, it's a three- to four-month timeline before they actually start kicking in.
Okay, sir. Sir, these 40 locos that were delivered, were most of them delivered in January to March quarter, or it was more of a September to March period delivery?
No, only delivered January- to- March quarter.
Okay. Thank you.
Thank you. We move to the next question from Aditya Mongia from Kotak. Aditya, you're unmuted. You can go ahead.
Yeah. Thanks, Radhika. The question that I had was on the Smart Infra portfolio. I'm just trying to gauge, if you were to be splitting that segment out in terms of value addition and where it has been easy to pass on cost increases. Some color would be useful over here, and just to appreciate the different parts of the Smart Infra portfolio from the perspective of value addition.
It's never easy to pass on any price increase, but let me try and give you some element of what our Smart Infra is made out of. We have the Low Voltage Switchgear, which is very short cycle products only, products and systems only. We have done price increases there. Two price increases over there. Some of it sticks, some of it we hope will stick in the next couple of months. That is on the Low Voltage side. On the Medium Voltage side, there is less of a short cycle. This is Medium Voltage Switchgear, and therefore the price hikes are more built into our revised costing when we bid for fresh orders. The impact of that is then felt probably six months to a year later, once we start deliveries of the Medium Voltage Switchgear.
Again, over here, as I mentioned earlier on, and Wolfgang also said, this is not specific to foreign exchange. This is more commodity-based, and we have to see how much of the commodity increases or fluctuations we can actually pass on to the customer. It's a question of negotiating each order because more or less every order is a tailor-made order. Therefore, it's a question of negotiating on an order-to-order basis with the customer and see how much of the cost increases we are able to build in and price into the customer, we are able to negotiate with the customer on. The third element in the Smart Infrastructure is our buildings, which is a mixture of short cycle product supply as well as projects.
The short cycle product supply, and this is largely imported, is subject to both foreign exchange and less of commodity, more of foreign exchange. There again, it is similar to the Low Voltage where we try and build it into the price hikes that we do. The project business is again similar to the Medium Voltage, which is where we are having to negotiate prices on a case-by-case basis, order-by-order basis, taking into account the costs that we are actually receiving in terms of commodities. I hope that helps.
Sorry. Just a clarification if you can, based on your answer. This five- to-six -month period that you need to kind of revisit and realign, how much part of the Smart Infra portfolio kind of falls inside that bucket? How much can you quickly turnaround on pricing?
I think Wolfgang gave you an overview of the projects and the product business split. Overall, 30% of the business of the company is projects. It would probably be more or less the same in the Smart Infrastructure business. The rest of it is products, which is short cycle.
Thanks and thank you. That was my question.
Thank you. Bhavin has sent his questions on the chat. He would like to get your thoughts on the fact that he says Siemens India addressable TAM at INR 7 crore per megawatt in the data center NEP CapEx of INR 40 crore per megawatt. As stated in the December 2025 PPT of data center, being 10% of SI revenues, was actually orders not revenues, but yeah, on SI revenues, this implies Siemens India market share of roughly 30% in data centers respective addressable area. What could be your thoughts on this?
I'm not going to comment on the market shares that we have right now, but let's put it this way. We are number one, number two in our portfolio for data centers.
The second question from him is what is the increase in the bill of material cost due to raw material and FX for SI segment? How much of this inflation has been passed on through the price hikes?
We don't monitor on a high-level basis. It is done on a product-to-product basis. In our Low Voltage Switchgear, for example, we've got over 10,000 products, right? In our Medium Voltage Switchgear, we've also got a couple of hundred products over there. It's very difficult to give you an average room temperature, because it depends on product-to-product over there. As I said, the price hikes that we have done on the short-cycle business would take us up to the margin levels that we aspire for on the short-cycle business. On the Medium Voltage business, we try to retain and grow our existing margins by trying to pass on whatever cost increases we have over there.
Since Medium Voltage and a large part of the project business in our buildings is a negotiated order, a lot of this depends on the level of negotiation.
Maybe if I can add, what we do on a regular basis, of course, we are reviewing the market and of course reviewing our cost position, and then we increase our list prices. Then, of course, as Sunil said, then it's a part of negotiation with our customers, at the end of the day, what price increase we can really capture. That's more or less really on a customer individual basis, and could be more, could be less so. What we do on a regular basis, increasing the list prices.
Thank you. We also have the question from Mohit Pandey. Mohit, your first question is already addressed in one of the earlier responses as to when the service revenue for the 9000- loco started flowing to us. That's why moving to your second question, please. Can you clarify on your comments on the India-EU FTA? Did you indicate that we would be an indirect beneficiary of increased trade, but possibly not a direct beneficiary? Would the import costs for us also get impacted?
Yes, import costs for us will go down, particularly in some segments. We are still to evaluate the fine print of the FTA there, but we do believe that import costs in some segments of our business will go down. In terms of the indirect benefit, yes, because all our customers who have interactions and intend to have interactions with the EU, we expect that that will increase their production requirements, and that will increase the market for us correspondingly.
What proportion of the backlog is now linked to power utilities and renewables?
I'm sorry, we don't track it on that basis, so I can't give you an accurate answer there.
Okay. Thank you. We have the next question from Subhadip Mitra from Nuvama.
Good morning. Am I audible? Hello.
Yes, you are. Please go ahead.
Perfect. Thank you so much for the opportunity. My first question is with regard to the data center piece. If I assume that there is $100 CapEx that's happening on data centers in terms of your products and offerings, how much of wallet share out of that $100 would come to Siemens?
My estimation would be in the range of 10%-20%.
Understood. Thank you.
The large part of the data center is the civil work.
I agree. Perfect. This answers my question.
Okay.
Secondly, if I may just shoot in one more. On the private sector CapEx side, you did mention that there were multiple sectors where you are seeing good growth. Is it fair to say that these sectors or the CapEx there would be growing at somewhere in the ballpark range of 10%-15% or lower? Any range of growth? What do you mean by good growth is what I was trying to understand.
I would say, 8-10 on an average % growth. I'm talking CapEx in these segments that I spoke about.
Perfect. Thank you so much. That answers my question.
Thank you. We have the last question from Jonas Bhutta from Aditya Birla Capital. Jonas, you're unmuted. You can go ahead, please.
Yeah. Thank you, Radhika. Good morning, Mr. Mathur and Wolfgang. One question on DI. Basically, given what we're seeing on currency depreciation and the variability of raw material has only increased in the last five years, is there a rethink on our part in terms of the localization of portfolio in this segment? This is where Siemens India sort of differs the most in terms of its margin profile versus its parent entity. Quickly on the loco order, sir, you mentioned that most of these locos were shipped out in the last quarter. Ideally, that should have led to an INR 4 billion delta, just multiplying 40 into the INR 10 crores odd, which is not visible in the Mobility top line. What am I missing here?
Okay. Let me start with the first question, which was around the DI localization part. Look, DI's products are primarily PLCs. Right? In terms of the hardware, it's primarily PLCs, in terms of the hardware. PLCs, you need a minimum volume, which runs into millions, to make a factory actually viable. Now, Siemens globally only has a limited number of factories that they have put up to serve the global requirement. Therefore, unless we are able to demonstrate a business case by showing substantial volumes here in the country, it does not make sense for us to actually go into localization here. This is a question that we continuously address.
We look at the market, we scan the market opportunities, what the volumes could be, and then we'll go back to the table to try and see, is there a business case that works in terms of volumes, in terms of setting up a new factory? Is there a make or a buy decision that we can do over here? Right now, as we speak, we do not see substantial opportunities for localization in the DI space, here in the country. Point number 2, there are some elements that we can localize, but they are very, very negligible. Flow meters is one of them that we announced in the past that we are localizing. That is, let's say in the overall scheme of things, not super material, but we are doing as much as we can whenever the opportunity comes up.
On your second question, I mentioned it before, this is a percentage- of- completion contract. It's not linked 40 to the total contract value, et cetera. It's linked into the cost inflow, and the revenues and margins are booked on the basis of the % of actual cost inflow to the projected cost inflow for the total project, and that's how the revenue is booked and correspondingly the margins.
Sure. Thank you so much, and all the best.
Okay. With that, we end the call. Thank you everyone for joining us today, and wish you a good day. You may now leave the-