Siemens Ltd. share price target

Siemens Ltd Q1SY18 results comment Revenue decreased by 22.38% to Rs. 2363.2 Cr in Q1SY18 when compared to the previous quarter. On the other hand, it grew by 5.76% when compared with Q1SY17.

Adding to that, digitization and opex-led demand will continue to drive the show. With Union Budget capital outlay increasing by 20%, the state-driven big infrastructure orders would aid SIEM order inflows. For a company working with two-thirds of its true potential, the operating leverage is yet to be seen. We maintain BUY. Key Highlights and Investment Rationale Strong numbers from Energy management saves the day: Company reported revenue of Rs24bn, a 6% annual growthaided by energy management and digital...

On a reported basis,revenue increased 5.9% YoY to INR24.3b (est. of INR28.1b) . Muted revenue growth can be attributed to a weak performance in the power & gas (- 14%YoY), mobility (- 30% YoY) and process industries and drives (- 27% YoY)segments. EBIDTA improved 17% YoY to INR2.7b, with the margin at 11.2%(+100bp YoY; est. of 10.4%). Adjusted net profit from operations increased18.6% YoY to INR1.9b, below our estimate of INR2.1b.

Siemens reported FY17 (Sept year ending) recurring revenue at ~Rs 107 bn (up 14% YoY), but PBIT margin was flat YoY at 7.5%. Order inflow was up 26% YoY at Rs 135 bn on strong growth in base orders (up 19% YoY) as well as two large orders.

Back to the scope of SIEM orders, digitization and opex-led demand will continue to drive the show. The big infrastructure orders are driven by government spending. And this will be the trend for FY18 (Sep-Ending). A full-blown private sector capex, however, is four quarters away, at-the-least....

Refer to important disclosures at the end of this report Outlook remains strong despite shortterm hiccups Siemens Ltd's (SIEM) Q4FY17 operational performance is below our expectations. Revenue increased by 2% yoy, driven by 11% yoy growth in Energy Management (EM). EBITDAM increased by 120bps to 10.1% and APAT increased by 10.5% yoy. Order intake improved by 10.4% yoy to Rs27bn while order backlog increased by 23% yoy to ~Rs123bn. Government induced investments in Transmission, Railways and...

YoY; est. of 8.3%). Adjusted net profit from operations declined 8.6% YoY to INR2.0b, below our estimate of INR2.7b. Gross margin expanded 20bp YoY to 32.2% in 4QFY17. EBITDA margin of 10.1% came in ahead of our estimate of 8.3%. EBIT margin expanded 100bp YoY to 8.4% on account of margin improvement across segments, barring digital factory. Power & gas segment improved margin by 800bp YoY, led by a better revenue mix and one-off settlement from a customer. Order inflow up 10% YoY; book-to-bill at 1.1x: Order intake for the quarter...

With HVDC orders, the revenues booked were stronger in Energy and Building Technologies segment. This helped SIEM report Rs26bn/Rs2.2bn/Rs1.6bn in Revenue/EBITDA/net profit respectively-ahead of our estimates. With 34% gross margin, SIEM has ticked the operating leverage boxes. Adding to that, with scalable business model, we think SIEM can clip a similar growth. With macroeconomic narratives translating in orders-- and with short-cycle bookbill ratio of ~1.2x, a robust CAGR in earnings remains on cards. Maintain BUY. Key Highlights and Investment Rationale Thanks to HVDC, the energy segment is firing: With unusually strong March quarter,...

At Rs47bn, the order inflow nearly doubled. Further, the revenues booked were way ahead in Mobility and Energy segment. This helped SIEM to report Rs29 bn/Rs2.7 bn/ Rs1.8 bn in Revenue/EBITDA/net profit respectivelyahead of our estimates. We think the current capacity utilization is 70% at the best. With 30% gross margin,...

Siemens' Q1FY17 (Y/E Sep) net profit at Rs 1.6 bn (up 44% YoY) beat both our and consensus expectations of Rs1.3 bn. Revenue at Rs 23 bn (down1% YoY), was broadly in line,but EBITDA at Rs 2.3bn was 15% above our/consensus estimate of Rs 2bn. EBITDA margin was up 200 bps YoY at 10.2%, largely drive..