MOSL: SIEMENS (Neutral)-Mobility weakness drives a marginal operating miss
Siemens: Mobility weakness drives a marginal operating miss
(SIEM IN, Mkt Cap USD5.3b, CMP INR1015, TP INR1070, 5% Upside, Neutral)
- 3QFY18 operating performance marginally below expectations: On a reported basis, revenue grew 16% YoY to INR30.7b (our estimate: INR31.3b) in 3QFY18 (year ending September). The revenue miss can be primarily attributed to the weak performance in Mobility segment (-21% YoY). EBITDA grew 33% YoY to INR3.0b, with margin at 9.8% (+130bp YoY; our estimate: 10.1%). Adj. net profit rose 26% YoY to INR2.0b (est. of INR2.2b).
- Operating margin improves but misses our estimate: EBITDA margin of 9.8% was marginally below our estimate of 10.1%. Margin expansion of 130bp YoY was led by better cost management (other expenses as a % of sales declined 220bp YoY to 10.1%; INR3.5b). EBIT margin expanded 160bp YoY to 8.2% - margin improvement was seen across segments, barring Energy management and Mobility. Sharp margin improvement was witnessed in Power & gas (+1,410bp to 19.5%), Digital factory (+270bp to 9.8%) and Building technologies (+250bp to 8.5%).
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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