Buy Siemens; target of Rs 4600: Motilal Oswal

Motilal Oswal's research report on Siemens

Siemens in its analyst meet highlighted growth opportunities across segments, plans to demerge its energy division, and plans to increase localization across segments. The company is optimistic about growth prospects in the domestic market across government and private capex. It is also positive about opportunities emerging from new areas such as semiconductors, batteries, and EVs. We believe that near-term order inflows may be affected by the general election schedule; however, in the long term, order inflow prospects remain strong from transmission, railways, data center, industrial automation, etc. A potential demerger and listing of Siemens’s India Energy segment should open avenues for value-unlocking over the next 2-3 years.

Outlook

We marginally revise our estimates to bake in slightly better margins and expect the company to clock revenue/EBITDA/PAT CAGRs of 16%/18%/19% over FY23-26. We continue to value it at 55X P/E on two-year forward earnings and maintain our BUY rating with a TP of INR4,600.

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