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Siemens India had an analyst meet to discuss its plans going forward. It indicated that while
private sector capex was slowing, pricing in the transmission business is stabilizing. The
company is making investments in capacity in India coupled with process improvements to focus
on growth and profitability.
1H was strong in terms of order inflow. Reported orders for 1H was flat, but if adjusted for the
large Qatar order last year was up 30-35%, though Q1 also had a large power plant order
from Torrent group.
Its current order book is Rs154bn with average execution of around 2-3 years. In its current
business mix, around 60-70% would be projects and the rest products. The company
mentioned that private sector capex and railway orders has started to slowdown
However it indicates that the pricing in the transmission and distribution business is stabilizing
as compared to the volatility seen in the past year.
Balance sheet has seen cash reducing in the current quarter, as customer advances have
gone down and project retentions have gone up impacting working capital
The company plans to restructure segments further from its current segments of Energy,
Industry and Healthcare and plans to add a fourth segment which will focus on infrastructure
in cities and comprise of power distribution, mobility and building technologies.
In the Energy business, the company is in its second phase of capex for steam turbine and
compressors and is setting up facilities for overhaul of industrial gas turbines and repair
components. Its Gas Insulated Switchgear (GIS) is operational at Kalwa.
In the Industry segment, the highlight has been the metro orders, with the Rs5.2bn Chennai
metro order and Rs1.5bn Kolkata metro order.
-It has a special focus on renewables with long term target of environmental portfolio at 30%
of its overall portfolio
We have a Sell rating on the stock. Stock trades at 26xFY12 earnings.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Siemens India had an analyst meet to discuss its plans going forward. It indicated that while
private sector capex was slowing, pricing in the transmission business is stabilizing. The
company is making investments in capacity in India coupled with process improvements to focus
on growth and profitability.
1H was strong in terms of order inflow. Reported orders for 1H was flat, but if adjusted for the
large Qatar order last year was up 30-35%, though Q1 also had a large power plant order
from Torrent group.
Its current order book is Rs154bn with average execution of around 2-3 years. In its current
business mix, around 60-70% would be projects and the rest products. The company
mentioned that private sector capex and railway orders has started to slowdown
However it indicates that the pricing in the transmission and distribution business is stabilizing
as compared to the volatility seen in the past year.
Balance sheet has seen cash reducing in the current quarter, as customer advances have
gone down and project retentions have gone up impacting working capital
The company plans to restructure segments further from its current segments of Energy,
Industry and Healthcare and plans to add a fourth segment which will focus on infrastructure
in cities and comprise of power distribution, mobility and building technologies.
In the Energy business, the company is in its second phase of capex for steam turbine and
compressors and is setting up facilities for overhaul of industrial gas turbines and repair
components. Its Gas Insulated Switchgear (GIS) is operational at Kalwa.
In the Industry segment, the highlight has been the metro orders, with the Rs5.2bn Chennai
metro order and Rs1.5bn Kolkata metro order.
-It has a special focus on renewables with long term target of environmental portfolio at 30%
of its overall portfolio
We have a Sell rating on the stock. Stock trades at 26xFY12 earnings.
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