Buy Siemens Ltd for the Target Rs 4,300 by Emkay Global Financial Services Ltd
Siemens’s operational performance surpassed our expectations, supported by robust execution in the Smart Infrastructure segment. Consolidated revenue at Rs57.3bn (up 17% yoy) was meaningfully above our estimates, supported by healthy execution across key segments such as Smart Infrastructure (up 20% yoy), Mobility (up 14% yoy), and Digital Industries (up 8% yoy). Siemens’s order inflow stood at Rs62.3bn (up 38% yoy), while the order backlog remained healthy at Rs470bn (up 12% yoy), providing visibility of 2.5x its TTM revenue. To factor in near-term margin pressure we marginally cut our FY27/28/29 estimates by 1%/5%/3%, respectively. However, we believe Siemens, with its technology-led product portfolio, is well placed to benefit from the broader capex cycle across Data centers, Railways, Industrial, and Power T&D. We retain BUY while cutting our TP by 6.5% to Rs4,300 (from Rs4,600), valuing the company at 60x its 1HFY29E EPS.
Robust execution drives operational beat Revenue for the quarter stood at Rs57.3bn (+17% yoy), supported by healthy execution across key segments such as Smart Infrastructure (Rs32.8bn; +20% yoy), Digital Industries (Rs11.5bn; +8% yoy), and Mobility (Rs12.9bn; +14% yoy). Gross margin declined by 260bps yoy to 27.3% on account of steep raw-material cost inflation witnessed during the quarter and partly due to adverse FX variation. However, EBITDA margin decline was restricted to 150bps yoy to 10.9% as operating leverage played out, helping Siemens register muted EBITDA growth of 2.7% yoy to Rs6.3bn. PAT reported 5% yoy growth to Rs5.0bn, above our estimate of Rs4.7bn.
Robust OCF generation and NWC management
Siemens efficiently managed its NWC cycle in 1HFY27, with NWC days being stable at 73 vs 75 in Sep-25. Operating cashflow for 1HFY27 stood robust at Rs13bn (66% of EBITDA) vs Rs3.7bn in Sep-25 (12M period; 19% of EBITDA), reflecting a sharp improvement driven by better working-capital management. Capex for 1HFY27 stood at Rs2.8bn (vs Rs3.8bn in Sep-25; 12M period).
Order book strong at Rs470bn; healthy order inflow of Rs62.3bn
Siemens’s order inflow for 2QFY27 stood at Rs62.3bn (+37.8% yoy), supported by robust capex spending in infrastructure and improvement in private-sector capex. The order backlog remained healthy at Rs470bn (+12% yoy), providing 2.5x TTM revenue visibility.
Investment summary
We believe Siemens, with its technology-led product portfolio, is well placed to benefit from the broader capex cycle across Data centers, Railways, Industrial, and Power T&D. We maintain BUY, with a revised TP of Rs4,300 (from Rs4,600) valuing the company at 60x its 1HFY29E EPS.
For More Emkay Global Financial Services Ltd Disclaimer http://www.emkayglobal.com/Uploads/disclaimer.pdf & SEBI Registration number is INH0000003
