Analysts give 'Buy' call on Siemens post stellar Q4 show; stock jumps 5%

Shares of Siemens climbed 5 per cent at Rs 7,614 a piece on the BSE in Wednesday intraday trade after reporting robust quarterly earnings in the fourth quarter of financial year 2023-24 (Q4FY24). The company follows an October-September fiscal year.

 

At 10:36 AM; the shares of the company were trading 2.99 per cent higher at Rs 7,462.90 a piece. By comparison, the BSE Sensex was down 0.07 per cent at 79,944.98 level. 

 

According to analysts, the engineering and automation registered healthy financials across the key metrics, beating their expectations on revenue, profit and operating profit. 

 

During the quarter the company received new orders worth Rs 6,160 crore, up 37 per cent year on year, which is strong, considering the slowdown in order process amid election season, said analysts at HDFC Securities. 

 

The brokerage added that the robust order booking was on the back of strong wins in the smart infrastructure, mobility and energy segments whilst digital industries continued to experience normalisation in demand. Further analysts believe that the company’s order book is stacked for the next 12-14 months.  

 

“Big ticket-size orders are likely to materialise over the next 12–24 months. We find higher visibility of two large HVDC orders over next six–eight months while the large railway (loco/trainset) orders seem to be taking longer,” said analysts at Nuvama Institutional Equities. 

 

Given the strength in order inflows and robust order backlog, those at HDFC Securities  maintained a ‘Buy’ rating on the stock, with an increased target price of Rs 8,114.

 

Meanwhile, analysts at Nuvama said that in their bull case they find 26 per cent-plus upside, with a target price of Rs 9,147, if they build-in optionality of two HVDCs (instead of one in base case), worth Rs 5,000 crore each in FY25E/27E and 15.5 per cent OPMs by FY27E (versus. 14.5 per cent in base case). 

 

Moreover, analysts said that the company earlier approved the demerger of its energy segment into a separate entity which is expected to be listed by the second half of calendar year 2025. Siemens is also increasing its capex for Power Transformer factory at Kalwa (announced in November 2023) by INR 100 crore, resulting in the total capex of Rs 460 crore. 

 

Siemens Q4 results

 

Siemens reported a 45.4 per cent year-on-year (YoY) growth in net profit, reaching Rs 830.7 crore for the fourth quarter ending September 30, 2024. In the same quarter of the previous fiscal, Siemens posted a net profit of Rs 571.3 crore. 

 

Revenue from operations rose by 11.2 per cent, totaling Rs 6,461 crore, compared to Rs 5,807.7 crore in the corresponding period of the previous year. The company's operating profit or earnings before interest, tax, depreciation and amortisation (Ebitda), surged 34 per cent to Rs 938 crore, up from Rs 700.2 crore in Q4 of the previous fiscal. 

 

The Ebitda margin also improved, standing at 14.5 per cent for the reporting quarter, compared to 12.1 per cent in the same period last year.