Siemens Ltd on August 10 joined the elite club of Rs 1 trillion market capitalisation after its shares surged nearly 19 percent this year.
In Intraday trading, the stock hit a record high of Rs 2,849 on the Bombay Stock Exchange (BSE), up one percent, with a market cap of Rs 1.01 trillion. At 3.30 pm, the scrip was at Rs 2,810 on BSE, unchanged from its previous close.
On August 2, the firm reported a 51 percent year-on-year surge in consolidated revenue to Rs 4,198 crore. The energy segment grew 52.3 percent to Rs 1,454.4 crore; the smart infrastructure segment grew 40.5 percent to Rs 1,506 crore, its mobility segment revenue grew 171.4 percent YoY to Rs 391.1 crore and the digital industries segment revenue grew 45.7 percent to Rs 996.2 crore. Net profit was at Rs 300.7 crore, up 112.1 percent YoY.
Order inflows were robust at Rs 4,992 crore, registering a growth of 20 percent on a YoY basis led by all business segments. This resulted in an order backlog at Rs 17,856 crore, which indicates a clear upswing in both public and private capex spending.
The company in its outlook said it is more concerned about global headwinds impacting the demand which could result in a slowdown in capex spending. Analysts say the company is well positioned for profitable growth as ordering momentum is expected to continue along with strong growth in short cycle business and high volume project business. The company is cautiously optimistic given the highly competitive market amid a dynamic global environment.
"Over the past several years, Siemens has kept on reinventing itself to become more market/customer centric, has successfully retained its technological edge and has worked on cost efficiencies to stay competitive. The focus on change in business model has helped the company to reduce the volatility of its earnings and has helped it deliver strong growth in base orders. We believe, Siemens, with the right product portfolio/advanced digital offerings, focus on achieving cost efficiencies and a large manufacturing base will be a key beneficiary of the recovery in the capex cycle over the long-term," said B&K Securities in a note to investors. The brokerage firm has maintained a buy rating and revised its target price to Rs 2,893 a share from Rs 2,683 earlier.
Brokerage firm JM Financial said Siemens management is bullish on sustained momentum in capex from both the government and private sectors, despite macro challenges. It expects Siemens manufacturing capabilities to significantly scale up driven by increased use of digitisation and automation in Indian industries, strong demand pick-up from new end-markets: data centres, EV charging and building automation, and revival of industrial capex from the PLI scheme.
"We believe Siemens is best placed to capture these opportunities and we expect a robust growth in order inflows in the next five years (FY21-25E) from Siemens Digital industries (20 percent order inflow CAGR) and Smart infrastructure (17 percent order inflow CAGR)," JM Financial added.
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