Siemens India reported March quarter order inflows of Rs 29.4 billion (+10% y-o-y, -15% q-o-q). Implied order book as of March quarter of Rs 109 billion is at similar levels seen in 2009. Management is seeing a pick-up in government capex, but not from the private sector yet. In the previous quarter, the +65% y-o-y growth in inflows (to Rs 34.5 billion) was led by the T&D and Railway segments. Top-line growth of 5% y-o-y to Rs 28 billion was in line with expectations, EBITDA margin of 11% (+160bps y-o-y) was ahead of expectations, driving a 9% PAT beat (Rs 1.77 billion, +15% y-o-y). Ex-healthcare (divestment effective 1 July 2016) the margin improvement was higher. Despite our UW rating premised on rich valuations, the March quarter earnings beat could result in near-term stock outperformance.
Siemens has received shareholder approval for the sale and transfer of its healthcare undertaking as an ongoing concern to Siemens AG, effective from 1 July 2016. Top-line grows across segments. Siemens reported top-line growth of 5% YoY in the Mar-q (Rs 27.8 billion), in line with expectations. Ex-healthcare, top-line growth was 5.3%. All segments excluding mobility reported top-line growth including the power segment (+6.6% y-o-y), which has been depressed over the past 12-18 months.