Siemens Q1 Results Review - Strong Performance; Growth Across Segment Drive Revenues: Prabhudas Lilladher

Prabhudas Lilladher Report

Siemens Ltd. reported strong quarterly performance with consolidated revenue up ~14.4% YoY. Ebitda margin expanded 195 basis points YoY to 11.6%, owing to lower other expenses.

We believe that strong traction is likely to continue in high growth verticals such as data centers, railways, chemicals and pharma, e-mobility, waste heat recovery, smart infra, intralogistics, building automation, decarbonisation, transmission and distribution etc.

Order inflows grew 5.9% YoY to Rs 52.9 billion, driven by base business (up 10.9% YoY) despite some impact on advance ordering in short cycle products.

We remain positive on Siemens from a long-term perspective given-

1. its strong and diversified presence across industries through focus on electrification, digitisation and automation products,

2. product localisation,

3. strong balance sheet,

4. healthy public and private capex and

5. focus on cost efficiencies.

The stock is currently trading at price-to-earning of 69.7 times/63.4 times/53.5 times SY23/24/25E.

We maintain 'Accumulate' rating on stock with target price of Rs 4,241 (Rs 4018 earlier), valuing it at PE of 60 times SY25E (57 times earlier), factoring in strong outlook and focus on high growth areas such as digitalisation, automation and energy efficiency product offerings.

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