Scripscan:Siemens Ltd
cmp:680
Code:500550
Story:Siemens India (SIEM) posted 4QFY11 revenue of INR36.5b (up 21% YoY), marginally below our estimate of INR37b (up 23% YoY), driven by impressive growth in all three segments. EBITDA margin declined 515bp YoY to 8% (against our estimate of 12%). PAT was down 33% YoY at INR1.7b (against our estimate of INR3b, up 20% YoY). Profitability was significantly impacted by a forex loss of INR1.59b in 4QFY11. Adjusting for this, PAT grew by 15% YoY. Order momentum remained sluggish in 4QFY11, falling 10% YoY. FY11 order intake was INR123b, flat YoY. The order book stands at INR139b, up 2% YoY, with BTB ratio of 1.2x TTM revenue.The company's Energy segment revenue grew 18% YoY in 4QFY11 (38% for FY11), despite a 4% YoY decline in sales in the transmission segment. Overall EBIT margin was down 655bp YoY at 7.1% in 4QFY11. Profitability was pulled down by a sharp decline in the transmission segment margin (3.2% v/s 15.2% YoY). We believe profitability of this segment was impacted by project-specific cost bookings and forex losses.We are cutting FY12 and FY13 earnings estimates by 12% each, to incorporate lower order-intake growth. SIEM trades at 22x FY12E and 18x FY13E earnings. While SIEM remains among the best plays on capex and outsourcing, a sluggish outlook on order-intake growth will limit the upside. Maintain Neutral with a revised target price of Rs 792 (earlier INR900), based on 25x FY12E EPS.
Source:Motilal oswal
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