Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Siemens Ltd - Healthy revival in orders and margins - ICICI Securities

Posted On: 2020-11-30 03:52:56 (Time Zone: Arizona, USA)

Siemens reported better than expected earnings supported by healthy recovery of execution and strong operating margins in the Jul-Sep quarter (Q4FY20). Despite the macro headwinds, order intake grew 9% YoY to Rs32bn during the quarter lending growth visibility. Management indicated an overall improvement in order finalisation led by uptick from government sector and increased activity in certain segments like pharma, data centres, food & beverages, etc. Private sector is increasingly investing towards automation and efficiency-related solutions. Factoring-in the better than expected performance, we raise earnings estimates by 5% and 10% for FY21E and FY22E respectively. However, given the recent run-up in valuation, we downgrade to the stock to HOLD from Add with a revised SoTP-based target price of Rs1,447 (earlier: Rs1,202).

- Healthy recovery of execution; strong order intake: Revenues witnessed strong sequential recovery, especially in Digital Industries, gas & power, and 'smart' infrastructure segments. We believe, there should have been certain bunching up of orders from the prior quarter given certain logistical bottlenecks due to lockdown. Despite headwinds, order intake was strong at Rs32bn (+9% YoY) lending growth visibility. Management is confident of recovery in ordering going forward.

- Strong operational margins: EBIDTA margins improved 180bps YoY to 12.9% driven by control over fixed overheads and favourable revenue mix. Contribution from services has increased to 17.7% in FY20 vs 11.6% in FY19 and export contribution in revenues has increased to 22.4% from 18.5% in FY19. We believe, this has also supported overall margin improvement. Management is focused towards margin improvement and cashflows.

- Downgrade to HOLD due to rich valuation: Management is confident that the economy is gradually moving back to normalcy driven by government thrust towards infrastructure. Green shoots in certain sectors like pharma, food & beverages, data centres, etc. will support base orders. However, we believe the recent run-up in stock price has made the valuations expensive, hence we downgrade it to HOLD. We have changed our valuation methodology to SoTP assigning multiples to FY22E core PAT for each individual segment; post this, we add back the cash; we have also accounted for C&S business and the mechanical drives businesses separately. We arrive at an SoTP based target price of Rs1,447 (previously: Rs1,202).

Shares of SIEMENS LTD. was last trading in BSE at Rs.1514 as compared to the previous close of Rs. 1520.9. The total number of shares traded during the day was 138205 in over 5871 trades.

The stock hit an intraday high of Rs. 1532.8 and intraday low of 1492. The net turnover during the day was Rs. 209129725.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

IPO Review - Indian Railway Finance Corporation (IRFC) - ICICI Direct

HCL Technologies - Q3FY21 First Cut - ICICI Direct

Logistics Sector Update - Indian Railways - getting aggressive - HDFC Securities

Indigo Paints - IPO view - YES SECURITIES

Infosys - Near-term margins will likely come under pressure - ICICI Securities

CESC - 7% dividend yield + higher ESG rating - ICICI Securities

South Indian Bank - Unveils vision 2024; targets RoA / RoE of 1% / 13% by 2024 - ICICI Securities

Maintain BUY on Infosys - Growth certainty on explosive deal wins - HDFC Securities

Maintain ADD on Wipro - Growth acceleration - HDFC Securities

Consumer Durables - Q3FY21 Results Preview - HDFC Securities

Q3FY21 Company Update - Filatex India - ICICI Direct

Q3FY21 Result Update - Wipro Ltd - ICICI Direct

Q3FY21 Result Update - CESC - ICICI Direct

Monthly Inflation - December 2020 - ICICI Direct

Q3FY21 Result Update - Infosys - ICICI Direct

Banks Q3FY21 Results Preview - Scope for optimism beyond a tepid 3Q - HDFC Securities

Consumer Discretionary Companies - Q3FY21 Results Preview Report - HDFC Securities

Pharma Sector Update - Ample catalysts to sustain luster - HDFC Securities

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on IIP data

Infosys - Q3FY21 First Cut - ICICI Direct

Wipro - Q3FY21 First Cut - ICICI Direct

HDFC Securities - Real Estate Q3FY21 Results Preview - Has COVID triggered a new cycle?

Industrials Q3FY21 Results Preview - Normalisation done, growth awaited - HDFC Securities

FMCG & Alco Bev - Q3FY21 Results Preview - HDFC Securities

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on December 2020 CPI Data

Cement & Building Materials (Tiles) - Results Preview - Robust Performance on Improved Volume - Reliance Securities

Automobile & Auto Ancillary - Results Preview - Strong Results on Healthy Volume Performance in 3QFY21 - Reliance Securities

Q3FY21 Result Update - Tata Consultancy Services - ICICI Direct

Q3FY21 Result Preview - Real Estate & Infrastructure - ICICI Direct

Q3FY21 Result Update - Avenue Supermarts - ICICI Direct

Q3FY21 Result Preview - Metals & Mining - ICICI Direct

Insurance and Capital Markets Companies Q3FY21 Results Preview - Stronger earnings expected across sectors - HDFC Securities

Capri Global Capital - Getting back to normalcy - ICICI Securities

Avenue Supermarts - Fast recovery; there are speed breakers though - ICICI Securities

Tata Consultancy Services - Steady state growth / margins are yet to be seen! - ICICI Securities

Q3FY21 Result Preview - FMCG - ICICI Direct

Cement Sector - Q3FY21 Results Preview - HDFC Securities

Avenue Supermart Q3FY21 Results - Views of YES SECURITIES

The Phoenix Mills - Festive season ushers in consumption revival - ICICI Securities

Quant Pick - Zee Entertainment - ICICI Direct

Q3FY21 Result Preview - Auto and auto ancillary - ICICI Direct

Q3FY21 Result Preview - Capital Goods & Power - ICICI Direct

Q3FY21 Result Preview - Consumer Discretionary - ICICI Direct

Q3FY21 Result Preview - Banking & Financial Services - ICICI Direct

Q3FY21 Result Preview - Cement - ICICI Direct

Stock Tales - Esab India - ICICI Direct

TCS - Q3FY21 First Cut - ICICI Direct

NHPC - Receivables decline; pending issues cleared - ICICI Securities

ICICI Securities - Telecom - Bharti Airtel to outperform yet again...

Cement - Yet another strong quarter; upgrades to continue - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020