Published on 19/04/2017 12:50:42 PM | Source: Motilal Oswal Securities Ltd
Neutral On Siemens Ltd For Target Rs.1,340.00 - Motilal Oswal
* During the quarter, SIEM in JV with Sumitomo Electric Industries has been awarded an order from Power Grid to supply HVDC transmission system for the Pugalur-Thrissur line. The total order size is USD520m (INR34.3b), of which SIEM’s share is INR16.8b.
* SIEM received an order from Delhi Transco to install 220/66/33KV GIS substation at RK Puram.
* SIEM has received an order from Sterlite Power Grid Ventures for supply of 765/400kv AIS substation at Khandwa (Madhya Pradesh) and an order for 765KV AIS bay extension equipment at Dhule from Khargone Transmission.
* We expect SIEM to register YoY revenue decline of 4% to INR26.8b, as it sold the healthcare division in 3QFY16. Excluding healthcare, we expect robust revenue growth of 14% YoY, led by strong performance by the industrial and energy segments.
* Maintain Neutral.
Key issues to watch
* Raw material imports account for 55% of raw material cost; Siemens AG’s network comprises 82% of imports; EUR appreciating 4% YoY v/s INR could impact margin profile.
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