Maintain Buy on Siemens - Motilal Oswal

Siemens (SIEM IN; Mkt Cap USD5.4b, CMP Rs728, Buy)

In 1QFY11 (year ending September) Siemens India reported revenue of Rs24b (up 36% YoY) which was above our estimates of Rs23b (up 23% YoY). 1QFY11 EBITDA margin dropped 497bp YoY to 14.4% against our estimate of 12% (down 730bp YoY). Reported PAT was up 3% YoY at Rs2.4b.

In 1QFY11, energy and industry revenue was Rs14b (up 60% YoY) and Rs12b (up 10% YoY) respectively.

The order book at the end of 1QFY11 was Rs151b. In 1QFY11, the company reported order intake of Rs40b, which was down 24% YoY.

We estimate Siemens will post FY11 EPS of Rs30.2 (up 23%) and FY12 EPS of Rs39 (up 28%). It will post revenue and PAT CAGR of 25% and 27% respectively over FY11-13. At its CMP Siemens trades at 19x FY11E and 15x FY12E. Maintain Buy with a price target of Rs907 (30x FY11E).

Source : Equity Bulls

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