Neutral Siemens; target of Rs 3350: Motilal Oswal

Motilal Oswal's research report on Siemens

Siemens (SIEM) delivered a revenue beat, while profitability came in slightly below our estimate. Segment-wise, smart infra and mobility did well in terms of revenue, while the digital industry remained weak on both revenue and margin fronts. This resulted in a lower-than-estimated overall EBITDA margin. Order inflows grew 10% YoY and stood at INR48b for the quarter. The company has changed the financial year to the Apr-Mar period. However, on a like-for-like comparison basis, its order inflow growth stood at 20% YoY for the trailing 12-month period, while the trailing 12M PAT has declined YoY even after adjusting for higher other income last year on property sales. Due to weaker than-expected margins, we cut our future margin assumptions and roll forward our TP to INR3,350, premised on 45x P/E Dec’27 estimates. We reiterate our Neutral rating on the stock as we await a broad-based scale-up in inflows and execution. Our estimates already bake in margin improvements across segments.

Outlook

The stock is currently trading at 47.7x/40.2x P/E on FY27/28E earnings. We reiterate our Neutral rating on the stock with a revised TP of INR3,350, based on 45x Dec’27E earnings.