Siemens Ltd. share price target

Robust execution and margins in Q2 led by smart infrastructure and mobility segments; base order inflow at Rs 57bn

Strong Q1 beat aided by margin expansion across segments. C&S Electric turns a corner

Similar to its closest peer, ABB (which posted strong EBITDA margin of 15% in the latest quarter), Siemens (SIEM) has reported standalone EBITDA of Rs5.5bn (+66% YoY) in Q1FY23, which was ahead of our and street’s estimates. This was led by 13% YoY revenue growth and 482bps YoY expansion in EBITDA margin to 15.1%.

Well positioned to benefit from emerging opportunities in digitalisation and sustainable solutions

This report reiterates our positive stance on Siemens (SIEM) as a structural theme in the long-term perspective due to: i) it being a strong play on the industrial capex cycle; ii) well integration of C&S operations (which further strengthens its positioning in the global LV & MV switchgear market).

In its FY22 annual analyst meet, Siemens indicated that ordering momentum is strong across business segments led by both public and private capex. Company continues to increase localisation, which may further expand margins.

Siemens witnessed moderation in execution with standalone revenue growing 11.7% YoY to Rs43bn against our expectations of Rs46bn for Q4FY22. Except mobility, all the segments reported execution below estimates.