Siemens' capex, spin offs in focus

Investors in shares of Siemens Ltd have had a remarkable 2023 so far with the stock rising by 29%. The company's robust order backlog and focus on high growth areas such as digitalisation, automation, and energy efficiency products has boosted sentiment. Plus, improving prospects in the capital goods sector has had a positive bearing on the stock.

- Dipti Sharma, Vineetha Sampath

On Tuesday, Siemens announced a good set of numbers for the September quarter (Q4FY23). The company follows the October-to-September financial year. Consolidated revenue rose by 25% year-on-year (y-o-y) to 15,808 crore led by healthy growth across segments including energy, smart infrastructure, mobility, and digital industries. Gross margin fell but lower other expenses meant a 98 basis points y-o-y expansion in Ebitda margin to 12.1%.

The order backlog as of 30 September stood at 45,518 crore. The order book provides revenue visibility of 2.3 times FY23 sales, which is higher than the level seen last year-1.1 times FY22 sales. Moreover, the company may see further strong order inflows. Nuvama Institutional Equities has identified a substantial future order pipeline in high voltage direct current, transmission, and railways, evident from Siemens' capital expenditure plans.