Siemens in uncertain waters in India, but charts a global voyage

livemint.com:

Siemens Ltd’s consolidated Ebitda for the quarter ended June was sharply below analysts’ estimates despite growing 22% year-on-year. Growth was aided by lower raw material cost and ‘other expenses’, but fell short of estimates due to a sharp drop in revenue growth. The Indian unit of Siemens AG, a German industrial technology conglomerate, seems to be facing headwinds in project execution and could see lower growth in the near-term.

Some analysts have lowered their earnings estimates for Siemens Ltd by up to 10%. Revenue growth was just about 7% in the June quarter, down from 19% in the October -March period. Siemens follows an October-September financial year, so the June quarter is its third.

While the order inflow rose by 18% year-on-year to ₹6,250 crore, order backlog, excluding a ₹26,300-crore locomotive project to be executed over 35 years, stands at a modest ₹21,700 crore–equal to trailing 12 months revenue–providing limited revenue visibility. Analysts’ opinions on Siemens are divided. Motilal Oswal Financial Services has reiterated its ‘Buy’ rating on the Siemens Ltd stock.

At the same time, it has lowered its Ebitda projections for FY25 and FY26 by 9.8% and 10.4%, respectively, to factor in lower execution and margins. Ambit Capital isn’t as optimistic on the stock. “While we believe in the near-term triggers in the form of demand from data centers and railways are positive for order inflows, we remain Sellers," said Ambit Capital.