Siemens Ltd. share price target

Siemens reported 14% YoY revenue growth, EBITDA margin improvement of 160bps YoY, EBITDA growth of 33% YoY and PAT growth of 43% YoY in Q3FY23 – all in all a good set of results and in line with consensus estimates. Order inflow growth was muted at 6% YoY. Book to bill ratio came in at 2.6x (vs 1.2x last year) aided by strong order inflow for locomotives.

Low-voltage and geared motors business divested to parent for Rs 22bn (2.1x revenue)

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).