Motilal Oswal has given Neutral recommendation for Siemens with a target price of Rs. 1900 in its research report issued on Jun 01, 2021
Motilal Oswal’s research report on Siemens
Even as the second COVID wave has led to delays in ordering in the Projects business, the short-cycle business is performing well. Business across segments rebounded over Jul’20–Jan’21, following which the momentum tapered. The demand uptick after the first lockdown exceeded the management’s expectations, with some portion of the 1HFY21 growth attributable to pent-up demand. An increase in commodity prices, semi-conductor shortage, and a rise in freight costs have led to some delays in ordering and deliveries. However, the outlook across the short-cycle business is healthy as brownfield capex and opex led spending is expected to aid order inflows. On the other hand, ordering in the Utilities segment is expected to be delayed on account of the COVID-led disruption.
However, the stock has seen a sharp re-rating. We maintain our Neutral rating with TP of INR1,900 per share (45x Mar’23E EPS). We prefer ABB over SIEM at current valuations.