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Q4FY21 results of Siemens:

The infrastructure company follows October-September financial year. For the Q4 period of Fy21, the company logged decent performance despite disruptions. Consolidated revenue came in at Rs. 4296.1 crore, up 21.1% YoY. EBITDA stood at Rs. 447.2 crore with margins of 10.4% impacted by higher other expense, higher commodity prices. Consequently, the company reported profit after tax (PAT) of Rs. 321.6 crore. Order inflows for the review period had been decent at approximately Rs. 3378 crore, up 4.9% on YoY.

About Siemens:

Siemens is a leading player in technology solutions with key focus on intelligent and smart infra for buildings and distributed energy systems, among others. The company operates primarily in 5 major segments that include energy/gas & power, smart infrastructure, digital industries, mobility. As per the brokerage house, Siemens is well positioned to benefit from the overall energy market transformation from electrification to automation & digitisation.

Target Price and Valuation:

The brokerage values Siemens at Rs. 2550 on an SoTP basis. “Overall, further penetration of automation & digitisation products and services across segments to drive long term growth”, adds the brokerage.

Key triggers for future price performance:

Strong focus on technology leadership in digitisation and automation products to further strengthen its market share.

Strong demand for short cycle products with clear traction form steel, cement, chemical, pharma, fertiliser industries to drive strong growth and margin expansion in smart infrastructure and digital industries segments.

We expect revenue, EBITDA to grow at CAGR of nearly 11%, 16.4%, respectively, in FY21-23E owing to strong traction in short cycle products and services .

Alternate Stock Idea:

“We also like Bharat Electronics in our coverage. Strong order inflows visibility, strategy to diversify into non-defence/civil areas, focus on increasing exports and services to drive long term growth”, said the brokerage. Buy with a target price of Rs. 250 suggests the brokerage house, resulting into gains of 26 percent if the investor buys into the scrip at the current market price of Rs. 198.2 per share.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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The Central Board of Direct Taxes under the supervision of the Ministry of Finance and Department of Revenue has issued guidelines under sub-section (4) of section 194-0, sub-section (3) of section 194Q, and subsection (I-I) of section 206C of Income-tax Act, 1961. The department clarified these guidelines in a circular released on November 25, 2021.

Section 194-O in the Income-tax Act 1961

According to the department “Finance Act, 2020 inserted a new section 194-0 in the Income-tax Act 1961which mandates that with effect from 1st day of October 2020, an e-commerce operator shall deduct income-tax at the rate of one per cent of the gross amount of sale of goods or provision of services or both, facilitated through its digital or electronic facility or platform. However, exemption from the said deduction has been provided in the case of certain individuals or Hindu undivided families subject to fulfillment of specified conditions. This deduction is required to be made at the time of credit of the amount of such sale or service or both to the account of an e-commerce participant or at the time of payment thereof to such e-COmmerce participant, whichever is earlier.”

Section 206C of the Income Tax Act

CBFT has clarified in its official statement that “Finance Act, 2020 also inserted sub-section ( 11-1 ) in section 206C of the Act which mandates that with effect from I” day of October 2020 a seller receiving an amount as consideration for the sale of any goods of the value or aggregate of such value exceeding Rs. 50 lakhs in any previous year shall collect from the buyer, a sum equal to 0.1 per cent of the sale consideration exceeding Rs. 50 lakhs as income tax. The collection is required to be made at the time of receipt of the amount of sale consideration. Seller is defined as the person whose total sales or gross receipts or turnover from the business carried on by him exceed Rs. 10 Cr during the financial year immediately preceding the financial year in which the sale of good is carried out. Central Government has been authorised to specify by notification in the Official Gazette, the person who would not be considered as the seller for the purposes of this section, subject to the fulfillment of certain conditions as specified therein.”

Section 194Q of the Income Tax Act

CBDT has clarified in its official circular that “Finance Act, 2021 inserted a new section 194Q to the Act which took effect from 1st day of July 2021. It applies to any buyer who is responsible for paying any sum to any resident seller for the purchase of any goods or the value or aggregate of value exceeding Rs. 50 lakh in any previous year. The buyer, at the time of credit of such sum to the account of the seller or at the time of payment, whichever is earlier, is required to deduct an amount equal to 0. 1 % of such sum exceeding Rs. 50 lakh as income tax. A buyer is defined to be the person whose total sales or gross receipts or turnover from the business carried on by him exceed Rs. 10 Cr during the financial year immediately preceding the financial year in which the purchase of goods is carried out. Central Government has been authorised to specify by notification in the Official Gazette, the person who would not be considered as a buyer for the purposes of this section, subject to fulfillment of specified conditions.”

Read the full circular here.