Siemens witnessed moderation in execution with standalone revenue growing 11.7% y-o-y to Rs 4,300 crore against our expectations of Rs 46,00 crore for Q4FY22.
Except mobility, all the segments reported execution below estimates. While gross margin expanded by ~200bps y-o-y to 32.7%, increase in ‘other expenses’ impacted the Ebitda margin, down 25bps y-o-y to 10.8%.
Hence Ebitda came in at Rs 470 crore, up 11% y-o-y. ‘Other income’ increased by 114% y-o-y on account of robust cash balance. PAT thus came in ~23% y-o-y higher at Rs 390 crore. Greater demand for automation and digitisation augurs well for the company’s strong digital offerings. We have marginally tweaked our estimates and maintain our ADD rating on the stock due to its consistent performance and favourable outlook on incremental capex. Revise our SoTP-based target price to Rs 3,011.
Execution moderates: In Q4FY22, total income witnessed 11.7% y-o-y growth to `4,300 crore. This was led by mobility, digital industries, smart infrastructure, energy segments, which grew 41%/20%/ 10%/4% y-o-y respectively. We expect execution to pick pace in the coming quarters with easing of supply-chain challenges and softening commodity prices. We expect a total revenue CAGR of 16% over FY22-FY24 estimates, with mobility and digital industries propelling the strong growth.
Ebitda margin below estimates: Gross margin expanded ~200bps y-o-y to 32.7%; however, Ebitda margin fell 25bps y-o-y to 10.8% during the quarter. This was mainly due to 46.4% y-o-y increase in ‘other expenses’, which could be attributable to forex-related MTM losses.
Order intake sustains: Order inflow rose 25% y-o-y to ~Rs 4,000 crore, led by a clear upswing in both public and private capex. The record ~Rs 17,180 crore orderbook offers sound revenue assurance. We are optimistic on private capex coupled with investment by the Central government on infrastructure backed by higher capital outlay in the FY23 Union Budget.
Maintain ADD: The governments impetus on infrastructure spend continues to translate into strong capital expenditure in the country, followed by investments in smart and green infrastructure, electrification, decarbonisation technologies, automation and digitisation.