Siemens Q3 Review: Motilal Oswal Retains 'Netural' Stance On The Stock, Cuts Target Price — Here's Why
Motilal Oswal retains Neutral rating on the stock with a revised target price of Rs 3,300.
Siemens reported a weak set of results with a miss on PAT, while revenue and Ebitda were in line with our estimates. Revenue grew 16% YoY to Rs 43.5 billion, which was broadly in line with our estimates. YoY growth was led by strong growth across Smart Infra and Mobility segments, while weakness in Digital Industries continued, albeit it improved from Q1 levels.
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Motilal Oswal Report
Siemens Ltd.’s results were weak on profitability as lower margins and lower other income weighed on overall profitability. Execution scale-up was good in smart infrastructure and mobility, while it remained weak in digital industries.
Overall margins came in lower than our estimates due to weak margins in mobility. Order inflows were good for Siemens at Rs 57 billion (up 13% YoY) and included two large orders from the railways for mobility divisions.
The company has also transferred pending cash and cash equivalents worth Rs 24 billion to Siemens Energy during the quarter. It has also taken approval for changing the financial year from Oct-Sep to Apr-Mar. Thus, FY26 will include 18 months from Oct’24-Mar’26.
Going ahead, we would watch out for-
a broad-based recovery in inflows across all divisions, and
margin improvement, particularly in mobility and digital industries.
We incorporate the changes related to the change in financial year and Q3 FY26 performance and roll forward our target price to 45 times Sep’27E EPS.
We retain our Neutral rating on the stock with a revised target price of Rs 3,300.
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