MOSL: SIEMENS INDIA (Neutral)-Base orders saving grace in the absence of large orders
Siemens India: Base orders saving grace in the absence of large orders; Pockets of private capex revival visible
(SIEM IN, Mkt Cap USD4.6b, CMP INR913, TP INR960, 5% Upside, Neutral)
We attended Siemens India’s (SIEM) analyst meet, where the company discussed on its financial performance, order trajectory and key focus areas to drive future growth. Key takeaways:
Base orders drive growth, large orders absent
The FY18 performance was supported by 28% YoY growth in base orders (
Mixed order trends across end-markets
- Power generation: Opportunities in generation are very limited due to low PLF and stressed assets, but demand for captive power plants is growing fast in the cement, fertilizer and sugar sectors. While large power plant orders will take some more time to fructify, the need to replace aging plants presents a big opportunity for SIEM (40GW needs to be replaced/phase out by 2030).
- Power T&D: The company mentioned that capex is shifting from PGCIL to states (<400/220kv level) and that discoms are coming up with new orders. However, the company faces intense competition from Chinese/Koreans and several local players. Moreover, the pricing scenario remains depressed. SIEM enjoyed a strong flow of base-line orders (
Siemens is an electronics products manufacturing group based in India. Co. is engaged in designing, manufacturing and marketing electrical and electronics products and equipments mainly for the power industry and the information and communication industry in India. Co. is also engaged in providing consultation services, providing back office support services and real estate management. Co. operates nine business segments with Healthcare as a separately managed business. Co.'s business segments include: Power and Gas; Wind Power and Renewables; Power Generation Services; Energy Management; Building Technologies; Mobility; Digital Factory; Process Industries and Drives; and Financial Services.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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