Prabhudas Lilladher’s analysis report on Siemens
We not too long ago attended Siemens India’s (SIEM) analyst meet the place administration highlighted that India is a core focus for the mother or father, Siemens AG, given it’s their quickest rising market. Sturdy financial indicators, secure inflation & rates of interest and softening commodity costs augur effectively for a wholesome capex setting within the nation. Strong public capex on infrastructure (with 70-80% of the budgeted outlays being applied) shall be augmented by a take-off in personal capex, which is able to absolutely kick-in when capability utilization reaches 80-85% (vs 75-80% at the moment and 52-53% precovid). PLI schemes additional profit the corporate by enabling prospects to incur further capex. Key alternatives lie in areas of digitalization & automation, cybersecurity, information facilities, railways, renewable vitality, energy transmission & distribution. We stay constructive on SIEM from a long-term perspective given 1) its sturdy and diversified presence throughout industries via deal with electrification, digitalization & automation, 2) product localization, 3) sturdy stability sheet, 4) wholesome public & personal capex and 5) deal with value efficiencies.
Outlook
The inventory is at the moment buying and selling at a PE of 63.0x/54.5x SY24/25E. We preserve our ‘Accumulate’ score on the inventory with a TP of Rs4,359 (Rs4,241 earlier), valuing it at PE of 60x SY25E (identical as earlier).
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Siemens – 23 – 12 – 2023 – prabhu
