ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Market Constraint

Market Constraint Hansavivek SIEMENS INDIA has suffered a sharp setback in its performance during 1983-84 forcing the directors to slash dividend by four points to 14 per cent. Gross profit has tumbled from previous year's Rs 27.17 crore to Rs 14.69 crore following a comparatively modest decline in turnover from Rs 143.76 crore to Rs 138:99 crore. Although tax liability is much lower, the net profit is halved to Rs 5.23 crore (Rs 10,49 crore) and earnings cover for the reduced dividend has thinned down to 3.46 times from 5.41 times previously. This outcome is attributed to sluggish market conditions with pressure on margins and cost increases in all inputs of production. Orders carried forward at the year-end stood at Rs 98.7 crore, about 10 per cent lower than the level of at the beginning of the year. The company was able to achieve an export turnover of Rs 14.9 crore despite a much reduced volume of business from USSR. Fresh inroads were made in the field of project work abroad with a repeat order for a 70 kV substation from Indonesia and a first-ever order from Aden for a substation worth Rs 60 lakh. Power Engineering Division, which has largely contributed to the company's growth over several years in the past, had a difficult time, with the order inflow having been affected due to the generally recessionary conditions in the industry and postponement of several large projects. The products particularly affected were switchboards and motors, which had to contend with severe competition at the market place. Execution of ongoing projects, however, has progressed well. The management proposes to ensure growth for this division by updating the existing products as well as by entering into more sophisticated areas of control and automation systems. The company has already commenced production of programmable control systems. It has also developed a range of thyristonsed force-commutated AC drives, which have hitherto been imported by the synthetic fibre industry. These are to be produced this year. The company has introduced a new series of switchgear and motors to cater to the changing needs of the Indian industry. In the Medical Engineering Division, the company's endeavour is to modernise the existing product range to meet the market requirement. The company has plans to enter into the electromedicine market in the next two years and for this purpose it has already received letters of intent for the manufacture of ultrasound diagnostic, patient monitoring and electrocardiograph units. In the field of advanced technology, particularly in computerised tomography and diagnostic equipment, the company has successfully installed sophisticated units manufactured by us principals, Siemens of West Germany, in various major hospitals in the country. The Components Data and Communications Division did well, despite entry of new firms in the field of railway signalling. It has introduced three phase point machines and AC immunised relays, for which orders are now being received.

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