Siemens hits record high, rallies 8% on record order book, growth outlook

Shares of Siemens hit a record high of Rs 2,453.65, on rallying 8 per cent on BSE in Friday’s intra-day trade on strong growth outlook. The stock of capital goods company surpassed its previous high of Rs 2,438.50 touched on November 10, 2021. It was trading higher for the fourth straight day, gaining 13 per cent during the period.

For the financial year ended September 2021, Siemens had reported an increase of 32.4 per cent in new orders, 33.1 per cent in revenue and 40.3 per cent in profit after tax from continuing operations over the previous financial year.

As government investment in infrastructure continues and capacity utilization levels increase, the management believes tendering for private sector capex will pick up in the months ahead. This will provide further impetus to the company’s continued strategy of profitable growth, the management had said while announcing results on November 24, 2021.

Siemens is a technology company focused on industry, infrastructure, transport as well as transmission and generation of electrical power. The company’s order backlog stands at an all-time high of Rs 13,520 crore.

Analysts at Edelweiss Securities remain bullish on Siemens enthused by perking up private capex across wider sectors and a few encouraging emerging trends driving automation, digital and medium voltage structurally. The brokerage firm retains ‘BUY’ rating on the stock with target price of Rs 2,660 per share.

Siemen’s ordering cycle has improved consistently over the past few quarters led by efficiency-related private capex driven by shortmid cycle product orders from cement-metals, food-beverages and renewables, etc.  The company’s utilisation at ~70 per cent suggests large-scale Greenfield capex is still some time away; however, medium voltage led by electric vehicle (EV) charging infra, renewable integration, data centres, etc will be a major driver for electrification, the brokerage firm said in company update after attending the FY21 analyst meet on Siemens.