Name: Latest research reports of Standard Industries Ltd. authored by HDFC Securities and published by - Trendlyne research reports.
Item: Standard Industries Ltd.
Rating: 3
Author: HDFC Securities

Siemens (2QFY19): Transformation to the encore. NEUTRAL

Neutral: Standard Industries Ltd.

HDFC Securities

SIL stands to benefit from secular growth in less cyclical segments like Smart Infrastructure. Government investment in Gas & Power is expected to recover as the installed base ages and upgrades are needed. Meanwhile, Metro projects will drive the Mobility segment. Digital Industries' market can multiply as automation and efficiency initiatives pick up. Upcoming corporate actions preclude rich valuations, which would otherwise accrue naturally to a business with this pedigree. Hence, we recommend NEU. Key risks (1) Delays in Government capex recovery, (2) Slowdown in private investments, (3) INR depreciation, and (4) Any adverse corporate action by Parent. We recommend a NEU on Siemens India Ltd. (SIL) with a TP of Rs 1,165/sh. SIL is well placed to monetize its strength in digitalization of Manufacturing/Smart Infra. This shall lead to clients taking up discretionary efficiency improvement initiatives. Introduction of newer technologies will further improve margins and aid growth.