Siemens shares down 9% as management sees sluggish private capex, says 'not participating' in a crucial segment

In the call with analysts, Siemens confirmed that the 'private capex has not picked up meaningfully'.

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Shares of Siemens were sharply lower by over 9% in mid-day trade, after analysts were disappointed by the fine print of the investor call that the company hosted on December 20, which alluded to a stagnant private capex, and concerns regarding supply chain for digital industries.

In the call with analysts, the company confirmed that the 'private capex has not picked up meaningfully', souring the sentiment for the share price. However, private capex in semiconductors, batteries, solar PVs and the electric vehicles space has been good, the company added. The capex investment trajectory in most sectors appeared to be trending upwards, expect automotive and metals, which were stagnant, said Siemens.

The sentimental ruboff was seen in the shares of ABB India as well, which slipped by nearly 4% during trade.

Siemens said that it is seeing traditional technologies garner slower investment, and added that the company is 'not participating in LCCs' in India or globally. A Line-Commutated Converter (LCC) is a device to convert alternating current (AC) into direct current (DC) and vice versa, and are commonly used in High-Voltage DC (HVDC) systems.

The company also mentioned that it remains active in the Voltage Source Converter (VSC) segment, but the numbers here are 'not material' right now. VSCs are devices to connect high voltage alternating current (HVAC) and high voltage direct current (HVDC) systems.

Siemens added that the government spending in infrastructure sector continued at a slower pace in H1FY25, but is expected to pick up in H2FY25. It also cited the manufacturing PMI indicator, which rebounded in October from nine-month lows as new orders and international sales fuelled growth. The rebound will help the manufacturing space, which has seen an easing of activity over last three months.

Siemens also noted an increased demand for energy transmission and efficiency solution equipment, and the management pointed towards signs of a consumption pickup in the economy.

Siemens shares fell to near a month low, however, on a YTD basis are higher by 75%. The company has a market capitalisation of Rs 2.55 lakh crore.

The management added that the demerger and listing of Siemens Energy is expected to be completed in 2025. The fourth quarter new orders are expected to be grow by 20.9% on year, Siemens added in the presentation.