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Siemens (SIEM) reported a lower than estimated PAT for Q4 (for the
standalone entity), largely due to forex losses of INR1.59bn in Q4FY11
(Q4FY10 forex gain of INR1.13bn). The company also posted a flattish
order intake for FY11 (Q4FY11 down 19% YoY), apparently paled in
comparison to mega ticket wins last year. Revenue growth in FY11 was
propelled by execution of large ticket orders (energy) besides some
consolidation impacts even as a crucial margin slippage in transmission
business swayed overall margins. We trim our EPS estimates by 11% for
FY12E building in the impact of lower order inflow growth in FY11.
Big ticket executions boost revenues, but lower margins dent OPMs
SIEM reported a strong 19% YoY revenue growth for 4QFY11 (29% YoY for FY11),
immensely aided by the execution of large value projects in energy (T&D, oil and gas)
apart from some consolidation impact from subsidiaries, merged in FY11. The company
reported EBIDTA margins (adj for forex losses) of 270 bps YoY because of lower
margins in some mega projects executed during the year.
Order intake flattish albeit on a higher base, order book grows 4%
Siemens reported a flattish order intake for FY11 at INR123bn due to limited large
value deals (order intake grew in FY10 by 44% YoY owing to certain mega ticket wins in
energy segment). The order book of the company stands flattish YoY at INR139bn
though it declined 7% QoQ, impairing the revenue visibility for the next 12‐14 months.
The Q4 order intake also declined 19% YoY to INR27bn even as on sequential basis, it
improved by 10 %.
Outlook and valuations: Top pick; maintain ‘BUY’
As India’s largest diversified power and industrial equipment player, Siemens is well
equipped to tap the upsurge in industrial capex ‐ both in T&D and industrial
automation products. With its acclaimed, traditional focus on mega contract deals in
T&D and fossil power, Siemens has steadily leveraged its manufacturing capabilities
across products better than peers. We maintain our ‘BUY/Sector Outperformer’
recommendation/rating on SIEM with revised TP of INR 849 (+25% upside).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Siemens (SIEM) reported a lower than estimated PAT for Q4 (for the
standalone entity), largely due to forex losses of INR1.59bn in Q4FY11
(Q4FY10 forex gain of INR1.13bn). The company also posted a flattish
order intake for FY11 (Q4FY11 down 19% YoY), apparently paled in
comparison to mega ticket wins last year. Revenue growth in FY11 was
propelled by execution of large ticket orders (energy) besides some
consolidation impacts even as a crucial margin slippage in transmission
business swayed overall margins. We trim our EPS estimates by 11% for
FY12E building in the impact of lower order inflow growth in FY11.
Big ticket executions boost revenues, but lower margins dent OPMs
SIEM reported a strong 19% YoY revenue growth for 4QFY11 (29% YoY for FY11),
immensely aided by the execution of large value projects in energy (T&D, oil and gas)
apart from some consolidation impact from subsidiaries, merged in FY11. The company
reported EBIDTA margins (adj for forex losses) of 270 bps YoY because of lower
margins in some mega projects executed during the year.
Order intake flattish albeit on a higher base, order book grows 4%
Siemens reported a flattish order intake for FY11 at INR123bn due to limited large
value deals (order intake grew in FY10 by 44% YoY owing to certain mega ticket wins in
energy segment). The order book of the company stands flattish YoY at INR139bn
though it declined 7% QoQ, impairing the revenue visibility for the next 12‐14 months.
The Q4 order intake also declined 19% YoY to INR27bn even as on sequential basis, it
improved by 10 %.
Outlook and valuations: Top pick; maintain ‘BUY’
As India’s largest diversified power and industrial equipment player, Siemens is well
equipped to tap the upsurge in industrial capex ‐ both in T&D and industrial
automation products. With its acclaimed, traditional focus on mega contract deals in
T&D and fossil power, Siemens has steadily leveraged its manufacturing capabilities
across products better than peers. We maintain our ‘BUY/Sector Outperformer’
recommendation/rating on SIEM with revised TP of INR 849 (+25% upside).
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