Edelweiss recommended hold rating on Siemens with a target price of Rs 1322 in its research report dated May 15, 2017.
Edelweiss' research report on Siemens
Siemens (SIEM) reported 25%/21% YoY surge in Q2/H1FY17 revenues, led by large orders in power T&D and oil & gas. SIEM reported strong 96%/45% YoY growth in Q2/H1FY17 orders. However, PAT came below estimates on poor gross margins (down 400bps YoY).
We estimate 19% earnings CAGR over FY16-18 with RoE profile of 12%. At CMP, the stock trades at 55x FY18E PE. We upgrade to ‘HOLD/SP’ from ‘REDUCE/SP’ with TP of INR 1,322 (based on 55x FY18E PE), given robust order book growth outlook.
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