Multi Baggers
Siemens
BSE ID : 500550 NSE ID : SIEMENS
RECOMMENDED PRICE 1065.00
PEAK FROM RECO 4066.10 281.79%
CURRENT PRICE 5739.00 Resource id #12
With a focus on electrification, automation and digitalization, Siemens India stands for engineering excellence, innovation, and reliability. Along with it, robust financial performance by company in year ending Sept`18 with healthy balance sheet makes a case for buy in stock with price target of Rs 1280 for long term horizon.
With a focus on electrification, automation and digitalization, Siemens India stands for engineering excellence, innovation, and reliability. As one of the world’s biggest producers of energy-efficient, resource-saving technologies, Siemens is a pioneer in infrastructure and energy solutions, as well as automation and software for industry. The company is also a leader in medical imaging equipment, laboratory diagnostics, and clinical IT. Siemens also provides business-to-business financial solutions, rail automation and wind power solutions Siemens has 22 factories located across India, 8 Centers of Competence and 11 R&D Centers and a nation-wide sales and service network. The factories manufacture Steam Turbines, Switchgear, Remote Monitoring Systems (RMS), Motors and Generators, Relays and Smart Grid Systems, Transformers, Railway Bogies and X-ray Machines. These have been set up replicating global, best-in-class manufacturing systems and practices. In Q4FY18 i.e Sept’18 Company has reported surge of 25% in topline at Rs 3939.20 Cr as against Rs 3141.80 Cr in Q4FY17. Operating profit of company has reported rise of decent 32% at Rs 418.60 Cr as against Rs 317.20 Cr in Q4FY17. Company’s bottomline as shown rise of more than whopping 300% at Rs 279.20 Cr in Q4FY18 against Q4FY17 (calculated excluding Exceptional Income of Rs 560.30 Cr in Q4FY17).
For the fourth quarter of Financial Year Sept’2018, new orders grew by 38.1% to Rs. 3,720 crore compared to Rs. 2,694 crore in the fourth quarter of Financial Year 2017. New Orders for the Financial Year 2018 were Rs. 12,740 crore. The order backlog as of September 30, 2018 stood at Rs. 12,352 crore. Order inflows in company’s base business continue to grow, its profitability and cash from operations is strong and company’s digitalization agenda continues to gather momentum.
Company is continuously driving on strong sectoral outlook. Demand for captive power plants is growing in fertilizer, sugar etc Also, replacement of ageing / inefficient power plants with super critical technology expected in the medium term which is positive for company. Capital expenditure is seen to be growing in some segments like automotive, pharmaceuticals, food & beverage. Along with above, strong interest in digitalization solutions for energy efficiency, enhanced productivity and flexibility will benefit company in long term.
The company is currently trading at 42.07 of TTM eps of Rs 25.31 while it is trading at 35x of FY19E eps & 32x of FY20E eps. As private Capex picks up and more of company’s customers see real benefits in implementing digitalization, company will continue to benefit from that. Along with it, robust financial performance by company in year ending Sept’18 with healthy balance sheet makes a case for buy in stock with price target of Rs 1280 for long term horizon.
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Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advice. Reader is requested to rely on his own decision and may take independent professional advice before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned herein and the same have acted upon or used the information prior to, or immediately following the publication.
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