Emkay Global has retained its 'Buy' rating on Siemens with a revised target price of ₹4,600, implying an upside of 14.7% from current market price. The brokerage maintains its positive outlook citing strong order backlog, robust revenue growth, and favorable macroeconomic tailwinds despite cost pressures impacting operating performance. Nomura has maintained its 'Neutral' rating on Siemens while raising its target price to ₹3,757 from the earlier target of ₹3,700, rolling forward its valuation to September 2028F earnings. The brokerage has cut its earnings estimates by 4-8% for FY27-29, expecting currency and commodity headwinds to keep margins under pressure. Meanwhile, Motilal Oswal has issued a 'Neutral' rating with a revised target price of ₹3,600, down from the earlier target of ₹3,500.
Siemens reported strong Q1FY27 results with consolidated revenue growing 15% year-on-year to ₹4,710 crore, exceeding consensus estimates. The company posted a consolidated net profit of ₹2,143.1 crore in Q1FY27, rising significantly from ₹423 crore in the same quarter a year ago. This sharp jump in profits came from discontinued operations, which is the Low Voltage Motors (LVM) business, at ₹1,799.7 crore as against ₹1 crore in the corresponding quarter of the previous fiscal. Excluding this one-time gain, the company's profitability was impacted due to volatility in commodity prices, foreign exchange and an increase in material costs. The adjusted EBITDA margin contracted 430 basis points year-on-year to 8.4% due to INR depreciation and elevated commodity prices, with gross margin declining 166 basis points year-on-year to 28.9% amid commodity price volatility.
The company secured strong order inflows of ₹6,330 crore (~17% YoY), taking the total order book to ₹46,670 crore, providing healthy revenue visibility and supporting the medium-term growth outlook. According to Emkay Global, excluding a large signalling and train control order from the previous corresponding quarter, order inflow grew by 44% YoY, demonstrating core business strength. The healthy order backlog of ₹46,670 crore was up 9.6% YoY, providing high revenue visibility equivalent to 2.5 times its Trailing Twelve Months (TTM) revenue. Nomura noted that management sees a positive demand outlook across Siemens' key segments, with healthy domestic demand from both private and public sectors. The strong order book provides revenue visibility and supports the company's medium-term growth trajectory despite current margin challenges.
Digital Industries segment showed robust performance with 25% YoY growth, driven by healthy demand across semiconductors, batteries and electronics sectors. Mobility segment reported 13% YoY growth, largely focused on railways where higher budgetary allocation offers sizable opportunities, though awarding timelines remain a monitorable factor. Smart Infrastructure segment grew 11% YoY, benefiting from renewable energy integration, industrialisation and rapid data-centre expansion. The Mobility segment reported healthy revenue growth of 12.8% YoY, led by the Rolling Stock business, with margins improving by 633 basis points to 10.2%, aided by a one-time ₹390 million gain. Order inflow growth was driven by automation orders across sectors, orders from grid modernization, data center, commercial real estate and rolling stock.
Siemens' share price has surged more than 25% over the previous 12 months, with the stock giving a return of 14% in the last one month and 27.4% in the past six months. The company completed the sale of its LVM business for cash consideration of ₹21 billion, yielding a one-time provisional gain of ₹2,100 crore that bolstered its financial strength. Emkay Global notes that the company is well-positioned to benefit from major long-term growth drivers, including substantial capex announced for infrastructure development, healthy railway capex, and the signing of the EU-India FTA deal. The brokerage expects Siemens to 'Outperform' despite current margin pressures, citing execution-led revenue growth across all key business segments and favorable macroeconomic tailwinds.
