Energy, railways, data centres may drive Siemens’ growth
₹4,499.80 apiece seen last week. Analysts suggest that power transmission and distribution, data centres, railways, metros, and locomotives will remain growth areas for the heavy electrical equipment manufacturer. In the December quarter of fiscal year 2024 (Q1FY24), Siemens secured new orders worth ₹5,971 crore, nearly a 10% increase previous year.
Growth was primarily led by the energy business, particularly the transmission segment. The company follows an October-September financial year. New orders in digital industries automation fell due to destocking after demand normalization, but Siemens sees normalcy beginning Q3.
“Excluding the large railway order, order book stands at ₹20,700 crore (1.2x FY23 revenues) thus providing strong revenue growth visibility for the near future," said ICICI Securities. The smart infrastructure segment, which includes data centres and constituted the largest portion of Siemens' revenue last quarter at nearly 38%, saw a 22% growth year-on-year. The energy segment, benefitting from strong demand and the transition to sustainable energy sources, follows closely.
Siemens' energy solutions are tailored for transmission utilities, independent power producers, and system operators. Moreover, a heightened focus on railways meant that the mobility business saw a strong 72% growth, with prospects in e-locomotives, propulsion systems, trainsets, metro projects, and bogies. However, the company saw a decrease in its Ebitda (earnings before interest, taxes, depreciation, and amortization) margin by 257 basis points to 12.4% in Q1, attributed to a lower gross margin and increased other expenses.
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