Siemens Neutral Target Price Set at Rs 3500 by Motilal Oswal

Siemens' Quarterly and Full-Year Results Match Motilal Oswal's Estimates

Siemens' results for the quarter and full year were largely in line with Motilal Oswal's estimates, adjusted for the sale of the LVM business. However, margin performance was affected by a significant rise in RM prices and rupee depreciation, which could not be passed on to end users despite price hikes taken twice during the year in select segments.

The company's order inflow has increased in the last two quarters, resulting in a 9% growth in the overall order book for 18MFY26. This growth is supported by a large order from the parent for the mobility division. Siemens is currently experiencing a strong demand outlook across various segments, particularly in data centers, electrification, and private capex.

Going Forward, Siemens Expected to Benefit from Improvement in Order Inflows and Locomotive Delivery Ramp-Up

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Motilal Oswal expects Siemens to benefit from improvement in order inflows for smart infrastructure and digital industries, as well as locomotive delivery ramp-up in the mobility segment. This is expected to drive operating leverage for the company. However, the firm also anticipates that forex and currency volatility will continue to affect Siemens' margin performance for a few more quarters.

Revised Estimates and Target Price

Motilal Oswal has revised its estimates for Siemens, with a -1% revision for FY27 and a +4% revision for FY28. The firm has also revised its target price for the company to INR3500, based on a 45x P/E multiple for two-year forward earnings. The overall recommendation for Siemens remains Neutral.