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Business News/ Markets / Stock Markets/  Siemens share price rises 8%, scales 52-week highs post March quarter results: Should you Buy, Sell or Hold the stock?
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Siemens share price rises 8%, scales 52-week highs post March quarter results: Should you Buy, Sell or Hold the stock?

Stock Market Today: Siemens share price gained more than 8% to scale 52-week highs post March'2024 quarter results reported after the market hours on Tuesday. Strong operating performance and margin improvement led reported net profit beat analysts estimates. Should you Buy, Sell or Hold the stock?

Siemens share price gained more than 8% post Q4 results Premium
Siemens share price gained more than 8% post Q4 results

Stock Market Today: Siemens share price gained more than 8% in opening trades on Wednesday to scale 52 week highs, post March'2024 quarter results declared by the company after market hours on Tuesday.

Siemens Ltd follows October-September financial year and hence January-March'2024 is the second quarter for Siemens. 

Siemens had reported a strong 70.2% year-on-year rise in net profit to 803 crore, as compared with 472 crore in the year ago quarter.

Analysts attributed the strong rise in profit to the margin outperformance that was driven by an improved revenue mix, pricing gains and productivity measures taken by the company.

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Siemens revenue of operations during the March quarter at 5750 crore grew 18.38% year-on-year. Siemens' Earnings before Interest, tax, Depreciation and amortisation (Ebitda) for the quarter at 878.2 crore grew 41% year-on-year over 621.2 crore in the year ago quarter.

Siemens is benefitting from a strong demand environment which has been aided by strong economic growth in the country. The segments as Electronics and hydrogen, railways transmission data center, semiconductor etc see strong growth opportunities. The order inflows at around 5180 crore in the Q2 though may have seen some slowdown of around 13% sequentially , nevertheless the same is due to general elections leading to delays in order finalizations, said analysts, who highlighted that enquiry pipeline remains strong.

Earnings upgrades post Q2 results

 

Analysts at Motilal Oswal Financial Services in their Siemens Q2 result review report said that they have raised their earnings estimates for FY24, FY25 and FY26 respectively by 17%, 18% and 26%,  primarily to factor in higher margin. To capitalize on domestic and export demand, Siemens has planned a capex of 500 Crore for GIS and metros highlighted analysts, who also expect separate listing of the energy segment by CY25 end.

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Nuvama Institutional Equities has upgraded FY24, FY25 and 26 earnings per share estimates by 8%, 21% and 29% respectively as they expect chunky Order Inflows from railways, HVDC (High Voltage Direct Current) likely to happen in FY25. This coupled with better execution, operating leverage  should drive margins. 

Siemens as per Nuvama beat consensus net profit estimates by 46% in Q2FY24, led by 250bp year-on-year expansion in Ebitda margin. Order inflows fell 9% YoY, but Siemens has maintained 5000 crore -plus quarterly run-rate, ex-large loco order, they highlighted

Analysts at Antique Stock Broking remain positive on Siemens and, revise their earnings estimate for FY24, FY25, FY26 by 8%,9% and 6% respectively and maintain Buy rating on the stock.

Analysts at Kotak Institutional Equities though have increased their fair value of share , nevertheless remain caution of valuations of share (78 times September'26 earnings estimates)

Kotak analysts attributed Siemens reported 23% beat in Ebitda to have been largely driven by productivity gains, partly supported by higher gross margins. The return of capex as per Kotak Analysts bodes well for both localization and overseas growth prospects. The one drag however from the results as per Kotak analysts is a flat order backlog and similar health of the order pipeline. They assess the approved demerger to be a value-neutral exercise, although clarity on mirror shareholding is a positive, as per them.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 15 May 2024, 09:25 AM IST
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