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Siemens India
Neutral
SIEM.BO, SIEM IN
Parent Dec-q results: India inflows and growth exceptionally strong
• Positive cues for India from Siemens AG results: The parent reported
India order inflows of €1.21B, up 160% YoY (44% QoQ) in Dec-q.
India revenues grew 25% YoY excluding currency translation, (38%
YoY in euro terms) to €550MM. The company disclosures mentioned
turnkey order wins for combined cycle power plants in India. These
appear to be fresh orders, as 1.6GW Torrent Group CCPP orders were
reported in July 2010.
• Positive surprise in store? Siemens India reports on 28 January
(Friday). Over the past four quarters, Siemens India revenues have
averaged 78% (range of 70%-83%) of the India top line reported by the
parent company. Assuming the historical average is maintained in Decq, the implied revenue of Rs25.7B (up 37% YoY) is tracking well ahead
of the consensus estimate of Rs.22.6B (implying 21% YoY growth).
Similarly, historical order inflows reported by Siemens India have been
~50-70% of total India inflow in a quarter. Assuming the lower end of
the range holds, Siemens India inflows could stand at ~Rs36B (20%
ahead of our estimate of Rs30B for Dec-q). We expect Siemens India’s
stock to react positively to healthy signs from the parent Dec-q results.
• Strong start to year for Siemens AG (SIE GR), covered by Andreas
Willi, J.P. Morgan European Capital Goods analyst (see research post 1Q
results- Strong start to year triggers 10%/6% EPS upgrade). All regions
delivered order inflow growth in 1Q (Sep-year end), led by Asia &
Australia (+41% YoY excluding currency translation) and Americas
(+11%). Inflow growth in the remaining geographies (Europe, CIS,
Africa, ME) was 6%.
• Miscellaneous takeaways from parent results: (1) Energy: a) the
focus in fossil power is in gas/combined cycle; (b) margin pressure was
high in the Transmission segment, particularly in China. Although
pricing pressure in the orders was said to be easing, sourcing costs are
up; (c) Within Wind, Siemens AG continues to see pricing pressure in
onshore and a decent market in offshore; (2) Industry: Siemens AG
management said that underlying margins in Industry are at peak levels;
(3) Healthcare: The segment continued to see strong growth in
Emerging Markets but was impacted in Europe by government austerity
measures.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Siemens India
Neutral
SIEM.BO, SIEM IN
Parent Dec-q results: India inflows and growth exceptionally strong
• Positive cues for India from Siemens AG results: The parent reported
India order inflows of €1.21B, up 160% YoY (44% QoQ) in Dec-q.
India revenues grew 25% YoY excluding currency translation, (38%
YoY in euro terms) to €550MM. The company disclosures mentioned
turnkey order wins for combined cycle power plants in India. These
appear to be fresh orders, as 1.6GW Torrent Group CCPP orders were
reported in July 2010.
• Positive surprise in store? Siemens India reports on 28 January
(Friday). Over the past four quarters, Siemens India revenues have
averaged 78% (range of 70%-83%) of the India top line reported by the
parent company. Assuming the historical average is maintained in Decq, the implied revenue of Rs25.7B (up 37% YoY) is tracking well ahead
of the consensus estimate of Rs.22.6B (implying 21% YoY growth).
Similarly, historical order inflows reported by Siemens India have been
~50-70% of total India inflow in a quarter. Assuming the lower end of
the range holds, Siemens India inflows could stand at ~Rs36B (20%
ahead of our estimate of Rs30B for Dec-q). We expect Siemens India’s
stock to react positively to healthy signs from the parent Dec-q results.
• Strong start to year for Siemens AG (SIE GR), covered by Andreas
Willi, J.P. Morgan European Capital Goods analyst (see research post 1Q
results- Strong start to year triggers 10%/6% EPS upgrade). All regions
delivered order inflow growth in 1Q (Sep-year end), led by Asia &
Australia (+41% YoY excluding currency translation) and Americas
(+11%). Inflow growth in the remaining geographies (Europe, CIS,
Africa, ME) was 6%.
• Miscellaneous takeaways from parent results: (1) Energy: a) the
focus in fossil power is in gas/combined cycle; (b) margin pressure was
high in the Transmission segment, particularly in China. Although
pricing pressure in the orders was said to be easing, sourcing costs are
up; (c) Within Wind, Siemens AG continues to see pricing pressure in
onshore and a decent market in offshore; (2) Industry: Siemens AG
management said that underlying margins in Industry are at peak levels;
(3) Healthcare: The segment continued to see strong growth in
Emerging Markets but was impacted in Europe by government austerity
measures.
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