Upcoming capex in steel, cement and chemical companies are expected to be major beneficiaries of this digitalization and automation.
Siemens registered strong sales growth on back of healthy order book in FY18. The recent jump in railway capex and the likely strengthening of the same is likely to continue.
Siemens is likely to be one of the biggest beneficiary of this. The likely new order inflow are likely to further expand margin.
Indian railways has achieved highest ever capex at Rs 1, 320 billion (incremental Rs 300 billion) in FY19. Capex investments is likely to increase due to higher focus on railway electrification and target of achieving 100% electrification by 2022. Railway capex also includes network expansion and decongestion, which in turn should lead to strong order inflows for Siemens.
Siemens has introduced many products in value chain over the years to achieve end to end portfolio for digital transformation. Upcoming capex in steel, cement and chemical companies are expected to be major beneficiaries of this digitalization and automation.
Order book of Rs 132 billion shows revenue visibility of 24 months. Order inflows for H1FY20 has grown by 13.6% to Rs 70 billion. We expect order inflows to show strong growth due to railways, metro projects and automation orders from steel industry. We expect sales to grow at 12%
We expect considerable order book expansion of the company along with continued improvement in margin.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.The Great Diwali Discount!
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