Buy Siemens; target of Rs 2660: Edelweiss Securities

Edelweiss Securities' report on Siemens

Siemens (SIEM) posted a stable set of P&L with execution and order intake for Q4 largely at pre-covid levels. Revenues are in line, but EBITDA missed consensus with adverse input cost/overhead impact. For FY21, SIEM posted a strong comeback with revenue/EBITDA largely at FY19 levels; however, order intake grew at high single digit. SIEM translated a far superior OCF to PAT at 125% (versus 90% in FY20) for the year. Management commentary on private capex and infra remains optimistic for coming quarters. With wider private sector participation and improving new order outlook, SIEM’s earning trajectory should get better in line with peers such as ABB. Retain ‘BUY’.

Outlook

SIEM’s addressable market opportunity has been expanding led by improving private capex spending and larger manufacturing footprint. Unlike peers, SIEM is a play on both public infra, private capex revival with additional upside from new segments. Retain ‘BUY/SO’ with a TP of INR2,660 (earlier INR2,360) on a rollover to Mar-23E.