Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Siemens Ltd - Healthy margins with growth recovery - ICICI Securities

Posted On: 2021-05-12 05:40:35 (Time Zone: UTC)

Siemens' Q2FY21 earnings were supported by strong recovery in execution (up 28% YoY) and strong operating margins (13.2% EBITDA margin) in Jan-Mar quarter (Q2FY21). Despite macro headwinds, order intake grew 17% YoY to Rs33bn during the quarter and the orderbook remained strong at Rs127bn, lending growth visibility. Going ahead, the impact of second covid wave on operations is uncertain; however, we expect increased activity in certain segments like pharma, data centres, food & beverages, etc. Private sector is increasingly investing in automation and efficiency-related solutions. Factoring in better-than-expected performance, we raise earnings estimates by 16.3% and 11% for FY21E and FY22E, respectively. However, given the recent run-up in valuation and the uncertainty due to the second wave, we maintain HOLD with a revised SoTP-based target price of Rs1,860 (earlier: Rs1,768).

- Healthy execution and order intake: Revenues witnessed strong recovery, especially in digital industries (short-cycle orders) and 'smart' infrastructure segments. The order intake grew 16.9% YoY at Rs33bn and the orderbook stood strong at Rs127bn (+17% YoY), lending growth visibility. Booking of a large order under mobility and healthy orders under digital industries.

- Strong operational margins despite higher material costs: EBIDTA margin at 13.2% (up 480bps YoY) was supported by control over fixed overheads as other expense declined 32% YoY. This was despite 650bps YoY increase in material cost proportion to 68.6%. We believe this should be partly due to revenue mix and partly due to increase in commodity prices. We believe 32% YoY drop in other expense to Rs2.4bn is aided by forex gains.

- Maintain HOLD due to rich valuation & impact of second covid wave: Management is confident that economy is gradually moving back to normalcy driven by government thrust towards infrastructure as indicated in FY22 Budget. 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 valuations expensive; hence, we maintain HOLD. We value the stock using SoTP methodology assigning multiples to FY22E core PAT for each individual segment, post this, we add back the cash. We have also accounted for C&S and mechanical drives businesses separately. We arrive at an SoTP-based target price of Rs1,860 (previously: Rs1,768).

Shares of SIEMENS LTD. was last trading in BSE at Rs.1947 as compared to the previous close of Rs. 1882.6. The total number of shares traded during the day was 23435 in over 1726 trades.

The stock hit an intraday high of Rs. 1963.8 and intraday low of 1868.7. The net turnover during the day was Rs. 45187635.

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:

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct

Q4FY21 Company Update - Globus Spirits - ICICI Direct

Q4FY21 Result Update - DB Corp - ICICI Direct

Q4FY21 Result Update - Somany Ceramics - ICICI Direct

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities

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

disclaimer copyright © 2005 - 2020