Axis Securities research report on Siemens
The management’s outlook was very much visible in 1HFY16 order inflow of Rs 65 bn (up 35% YoY), which was driven mainly by T&D and Railways, and a large export order of Rs 13 bn. However, management underscored strong export orders as one-off and expects it to sustain at 15-20% of revenue. It also emphasized on profitable growth and cited incidences of lost large orders which did not meet its margin threshold.
Margin expansion of 600 bps over last 2 years was driven by write-back of provisions and cost rationalization, which has limited scope henceforward.Our TP stands at Rs 922 (30x FY17E+Rs 29/sh as special dividend on sale of healthcare business).
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