Emkay Global Financial Services retained its ‘Buy’ rating on Siemens, with a price target of Rs 4,600, implying an upside of 14.7% from the current market price. However, the brokerage said that despite a strong order book, cost pressure dented operating performance. But retention of the rating came on the back of several factors such as –

ALSO READ

Strong order backlog and revenue visibility

Siemens maintained a healthy order backlog of Rs 46,670 crore, which was up 9.6% YoY. This robust backlog provides high revenue visibility, equivalent to 2.5 times its Trailing Twelve Months (TTM) revenue.

Robust underlying order inflow

While overall quarterly order inflow reached Rs 6,330 crore, rising 16.5% YoY, the core performance for Siemens is even stronger. Excluding a large signalling and train control order from the previous corresponding quarter, Siemens’s order inflow grew by 44% YoY.

“Siemens bagged a large order for signalling and train control technologies for the Mumbai-Ahmedabad High-Speed Rail corridor in the previous corresponding quarter,” said Emkay Global in a research note. 

Execution-led revenue growth

Siemens’ consolidated revenue grew 15% YoY to Rs 4,710 crore, exceeding consensus estimates. Growth was supported by strong execution across all key business segments, including Digital Industries (+25% YoY), Mobility (+13% YoY), and Smart Infrastructure (+11% YoY).

Diverse sectoral momentum

Siemens is securing high-value contracts across several rapidly growing sectors:

  • Smart Infrastructure is driven by grid modernisation, data centres, and commercial real estate.
  • Mobility is supported by the Rolling Stock business.
  • Digital Industries is capturing automation demand in solar cell manufacturing, metals, electronics, pharmaceuticals, and water segments.

Favourable macroeconomic tailwinds

Emkay says that the company is well-positioned to benefit from major long-term growth drivers, including substantial capex announced for infrastructure development, healthy railway capex, and the signing of the EU-India FTA deal. Additionally, the recent sale of its LVM business yielded a one-time provisional gain of Rs 2,100 crore, bolstering its financial strength.

Siemens share price performance

The share price of Siemens has changed a little over the past five trading days. The stock has given a return of 14% in the last one month and 27.4% in the past six months. Siemens’ share has surged more than 25% over the previous 12 months. 

Siemens Q1FY27

The company posted a consolidated net profit of Rs 2,143.1 crore in the first quarter of FY27, rising significantly from Rs 423 crore in the same quarter a year ago.

The company’s revenue from operations surged 14.8% year-over-year to Rs 4,713.7 crore in Q1FY27 from Rs 4,107.7 crore in the corresponding period a year back.

Such a sharp jump in profits came from discontinued operations, which is the Low Voltage Motors (LVM) business, during the first quarter of FY27, which was at Rs 1,799.7 crore as against Rs 1 crore in the corresponding quarter of the previous fiscal.

Excluding this, the company said its profitability was impacted due to volatility in commodity prices, foreign exchange and an increase in material costs.