Reduce Siemens - Kotak

Siemens Q2FY12 numbers are well above our estimates on revenue and profitability front. Higher operating margins in energy and infrastructure segments resulted in YoY PAT growth.

- However for 1HFY12, company has reported sharp contraction in operating margins which resulted in YoY de-growth in PAT for the first half of current year. We highlight that the company has a diversified product base which accounts for abbreviations in reported quarterly numbers and therefore do not reflect the actual business trend.

- We continue to prefer Siemens in the listed MNC players in power sector for having an inherent technological edge and diversified product profile over peer group. However, in view of downside from current levels, we change our rating from Accumulate to 'Reduce' with a DCF based revised price target of Rs 750 (Rs 735 earlier).

Source : Equity Bulls

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