Siemens marked a 90 percent jump in its Q2 consolidated net profit at Rs.334 crore from Rs 175.7 crore in the same quarter last year. Revenue was up 31.9 percent at Rs 3,483.7 crore versus Rs 2,640.2 crore in the year-ago period.
Siemens’s share price rose 4 percent in the early trade on May 12, a day after the company posted a 90 percent jump in its Q2 consolidated net profit at Rs.334 crore from Rs.175.7 crore in the same quarter last year.
Earnings before interest, tax, depreciation and amortization (EBITDA) were at Rs 457.9 crore versus Rs. 221.6 crore and the margin was up at 13.1 percent from 8.4 percent, YoY.
Opinion of brokerages about the stock and company after March earnings:
We cut our FY21E EPS by 9 percent, while we maintain our FY22/FY23E EPS estimates.
We like the company’s product portfolio and diverse end-market exposure. The company is poised to benefit over the long term, led by the niche industrial automation and digitalization businesses. However, re-rating of the stock has been quite steep. Adjusted for strong cuts in other expenses (7.3 percent of sales v/s 13.8 percent in 2QFY20), the margin trend seems to be under pressure. We maintain our neutral rating with the target price of Rs 1,700 per share (42x Mar’23E EPS). We prefer ABB over Siemens at current valuations.
Overall, Siemens is expected to strengthen its leadership position through further penetration of automation and digitization products and services across segments, particularly in digital industries, smart infrastructure, mobility segments, driving long-term growth.
We revise our target price to Rs 2,295 a share (earlier Rs 2,210) and maintain a buy rating, implying multiple of 50x on FY23E EPS for core business and valuing C&S business at 1.7x on FY23E sales.
The brokerage raised FY21e EPS estimates by 8.1 percent to factor in the robust Q2 performance, while retaining FY22e/FY23e estimates. It has retained “buy” with the target price of Rs 2,300 based on 55x Mar’23E EPS.
Macquarie maintained “underperform” call with the target at Rs 1,520 per share.
There was an in-line growth excluding C&S segment. The ordering momentum is weaker than ABB.
At 0919 hours, Siemens was quoting at Rs 1,993.05, up Rs 44.05, or 2.26 percent, on the BSE.
The share touched a 52-week high of Rs 2,055.10 on February 24, 2021, and a 52-week low of Rs 990.30 on May 18, 2020. It is trading 3.02 percent below its 52-week high and 101.26 percent above its 52-week low.