Hold Siemens; target of Rs 1400: Edelweiss

Edelweiss's research report on Siemens

Key takeaways from Siemens’ annual analyst meet are: a) 26% jump in FY17 order inflow was driven by public spending (HVDC Pugalur order and Nagpur Metro), while private sector remained muted. Management expects FY18 to be no different; b) while digitalisation of power plants’ maintenance has been accepted in private sector (Vedanta & CLP), public sector is awaiting proof of concept before placing orders; and c) delays in large orders with only ~30% actually awarded versus management’s initial assessment.

Outlook

We trim FY18/19E EPS 3% each factoring in muted Q4 and maintain ‘HOLD’ with revised TP of INR1,400 (INR1,450 earlier).