Siemens Shares Hit Record On Profit Beat, Plans To Demerge Energy Arm
The company's net profit jumped 70% year-on-year to Rs 803 crore in the second quarter, beating Bloomberg forecast of Rs 548 crore.
Shares of Siemens Ltd. gained over 8% to hit a lifetime high on Wednesday after its profit for quarter ended March beat analysts' estimates. The company also announced the demerger of its energy business.
The company's net profit jumped 70% year-on-year to Rs 803 crore in the second quarter, according to an exchange filing. Analysts tracked by Bloomberg forecast the net profit at Rs 548 crore. The company follows January-December period for financial reporting.
Siemens India Q2 (Consolidated, YoY)
Revenue up 18.4% to Rs 5,750 crore. (Bloomberg estimate: Rs 5,566 crore).
Ebitda up 41.4% to Rs 878 crore. (Bloomberg estimate: Rs 697 crore).
Margin at 15.3% versus 12.8% (Bloomberg estimate: 12.5%).
Net profit up 70.2% to Rs 803 crore. (Bloomberg estimate: Rs 548 crore).
Announced capex of over Rs 1,000 crore for expansion of operations.
Approved the demerger of energy business into a separate listed legal entity.
Share Entitlement Ratio fixed at 1:1.
Motilal Oswal Financial Services Ltd. has raised its target price on the stock to Rs 7,800 from Rs 6,050 earlier, while reiterating its 'buy' rating.
"Margin outperformance was driven by an improved revenue mix, pricing gains and productivity measures taken by the company," it said.
Siemens aims to maintain margins at higher levels amid a strong demand scenario, along with productivity measures, the brokerage said.
The company also announced the demerger of its energy business, Siemens Energy India Ltd., which will be separately listed on the BSE and NSE. "Both companies will be able to execute their own strategy with a tailored go-to-market and operational approach to leverage the full potential of the Indian and export markets," Motilal Oswal said.
Shares of the company rose as much as 8.70% before paring gains to trade 7.2% higher at 10:26 a.m., compared to a 0.17% decline in the NSE Nifty 50.
The stock has risen 77.4% year-to-date and 101.05% in the last 12 months. Total traded volume so far in the day stood at 4.11 times its 30-day average. The relative strength index was at 85.93, indicating that the stock may be overbought.
Of the 26 analysts tracking the company, 17 maintain a 'buy' rating, four recommend a 'hold,' and five suggest 'sell', according to Bloomberg data. The average 12-month analysts' price target implies a downside of 15.2%.
