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Siemens Ltd>
  • CMP : 7,436.3 Chg : -88.60 (-1.18%)
  • Target : 3,725.0 (15.43%)
  • Target Period : 12-18 Month

15 Feb 2023

All segments performed well…

About The Stock

Siemens Ltd (Siemens) is a leader in technology solutions for smart, intelligent, building technologies, mobility, digital industries and power T&D.

  • It operates mainly in five key segments including energy/gas & power (34%), smart infrastructure (33%), digital industries (22%), mobility (7%)
  • Well placed to gain from the overall energy market transformation from electrification to automation and digitisation

Siemens reported strong set of Q1FY23* numbers.

  • Consolidated revenue was at ₹ 4015.1 crore, grew by 13.1% YoY
  • EBITDA came at ₹ 599.2 crore with strong margins of 14.9% on account of strong volumes, price hikes, lower input costs and forex gain
  • Consequently, PAT came at ₹ 462.7 crore, up 84.5%
  • Order inflow for Q1FY23 was at ~₹ 5446 crore, up by 6% YoY
What should Investors do?

Overall, further penetration of automation & digitisation products and services across segments to drive long term growth.

  • We remain long term positive and retain our BUY rating on the stock
Target Price and Valuation

We value Siemens at ₹ 3725 i.e. 60x P/E on FY24E

Key Triggers for future price performance
  • Strong focus on technology leadership in digitisation and automation products to further strengthen its market share
  • Strong demand for short cycle products with clear traction from steel, cement, chemical, pharma, fertiliser industries to drive strong growth and margin expansion in smart infrastructure and digital industries segments
  • Expect revenue, EBITDA to grow at a CAGR of ~19.1%, 20.9%, respectively, in FY22-24E owing to strong traction in short cycle products and services
Alternate Stock Idea

 We also like ABB in our coverage.

  • ABB continues to see a recovery in certain segments and industries like data centre, renewables, electronics, food & beverages and pharma. It continues to focus on order win and seamless execution across projects
  • BUY with a target price of ₹ 3735

Key Financial Summary

Particulars FY19 FY20 FY21 5 Year CAGR % (FY17-FY22E) FY22 FY23E FY24E 2 Year CAGR % (FY22-FY24E)
Net Sales 13,083.9 9,946.5 13,639.2 7.8 16,137.8 19,524.7 22,887.4 19.1
EBITDA 1,526.1 1,003.6 1,518.5 - 1,757.3 2,343.0 2,860.9 27.6
RoCE (%) 19.1 11.2 14.1 - 15.8 20.2 21.8 -
RoE (%) 12.5 8.1 10.3 - 11.4 14.9 16.0 -
Source: Company, ICICI Direct Research

Year Q1FY23 Q1FY22 YoY (%) Q4FY22 QoQ (%) Comments
Income from Operation 4015.1 3550.4 13.1 4657.1 (13.8)  
Other Income 101.7 59.6 70.6 102.8 (1.1)  
Cost of materials consumed 2419.1 1965.1 23.1 2037.0 18.8  
Changes in inventories of finished goods & WIP (346.9) (151.3) 129.3 121.9 (384.6)  
Employee cost 496.3 467.5 6.2 478.1 3.8  
Other expenses 249.4 280.0 (10.9) 537.0 (53.6)  
EBITDA 599.2 364.6 64.3 515.9 16.1 On account of strong volumes, price hikes, lower input costs and forex gain
EBITDA Margin (%) 14.9 10.3 465 bps 11.1 385 bps  
Depreciation 76.1 80.6 (5.6) 79.8 (4.6)  
Interest 3.7 6.1 (39.3) 13.2    
PBT 621.1 337.5 84.0 525.7 18.1  
Taxes 158.4 86.7 82.7 144.0 10.0  
PAT 462.7 250.8 84.5 652.3 (29.1)  
Segment Revenue Q1FY23 Q1FY22 YoY (%) Q4FY22 QoQ (%)  
Gas & Power/ Energy 1160.1 1089.2 6.5 1631.6 (28.9)  
% Contribution 28% 30%   35%    
Smart Infrastrucutre 1519.7 1287.0 18.1 1665.8 (8.8)  
% Contribution 37% 36%   35%    
Mobility 383.8 300.7 27.6 441.8 (13.1)  
% Contribution 9% 8%   9%    
Digital Industries 1019.3 791.0 28.9 944.4 7.9 Strong performance by Digital segment with strong margins
% Contribution 25% 22%   20%    
Others 23.3 16.2 43.8 40.2 (42.0)  
% Contribution 0.0% 4%   0%    


Q1FY23 Results: All segments performed well…

  • Siemens reported consolidated revenue at | 4015.1 crore which grew by 13.1% on YoY basis. Gas & Power (Energy) segment grew by 6.5% to | 1160.1 crore; Smart Infrastructure segment grew by 18.1% to | 1519.7 crore, Mobility segment revenue grew by 27.6% YoY to | 383.8 crore and Digital industries segment revenue grew by 28.9% to | 1019.3 crore. Gas & Power, Smart Infrastructure, Digital Industries, Mobility segments contributed ~28%, ~37%, 25%, 9% respectively.


  • Order inflows wins were decent at | 5446 crore, registering a growth of 6% on YoY basis led by all business segments. On a like to like basis, inflow have grown 28% YoY, in Q1FY22 company had one large order to the tune of |900 crores)


  • EBITDA came in at | 599.2 crore with EBITDA margin of 14.9% (Vs. | 10.3% in Q1FY22). Gross margins expanded by 220bps to 33.5% on YoY basis and 60bps on QoQ basis. Gas & Power reported EBIT Margin of 11.5% expanded by 20bps on YoY basis, Digital Industries and smart infrastructure reported EBIT margins at 23.8% (vs. 8.4% in Q1FY22) and 8.7% (vs. 4.7% in Q1FY22) respectively. While Mobility segment EBIT margin came at 3.5% (vs. 10.1% in Q1FY22). The key reason for EBITDA beat was on account of strong volumes, price hikes, lower input costs and forex gain.


  • Reported PAT came in at | 462.7 crore, grew by 84.5% on YoY




I/We, Chirag Shah, PGDBM and Ameya Mahurkar, MFM (Masters in Financial Management), Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report

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