MOSL: Morning India (25/November/21): Siemens (In line revenue; weak margin leads to an earnings miss)
MOrning India (25/November/21): Siemens (In line revenue; weak margin leads to an earnings miss)
Today’s top research idea
Siemens: In line revenue; weak margin leads to an earnings miss
- SIEM's 4QFY21 revenue stood in line with our estimate, driven by strong performance in key segments of Digital industries and Smart infrastructure segments. EBITDA margin was weaker at 10.7% v/s our estimate of 12.3%, driving earnings miss of 17% v/s our expectation.
- Order inflow grew 5% YoY to INR33.8b, but moderated QoQ. Strong order inflows are imperative for its future outlook, given the rich valuations of SIEM. Order book stood at INR135b (order book/revenue ratio of 1x).
- SIEM has the most diversified portfolio, with offerings across various end-markets, which enables it to capture wider growth opportunities. Underlying margin has weakened across various key segments. The stock has sharply re-rated in anticipation of a capex recovery, but fails to account for margin pressure in the business. The company needs to consistently surprise on order intake to meet revenue growth expectations. We broadly maintain our estimates and remain Neutral with a TP of INR2,065/share.
Piping hot news
Lower availability of natural rubber adversely disrupting production processes at tyre making units
- Lower availability of natural rubber (NR) is adversely disrupting the production processes at tyre manufacturing units even as the demand for tyres is peaking,tyre industry body Automotive Tyre Manufacturers Association (ATMA) said on Wednesday.
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