The worsening slowdown and the delay in investment cycle revival have impacted manufacturing companies over the past two to three years.
In a bid to tide over weak demand and structural challenges, many firms have been streamlining their processes through technology and digital solutions, to improve profitability.
Siemens, backed by the strong R&D capability of parent Siemens AG, is well-positioned to tap this segment and offer digitisation and automation solutions to manufacturing companies.
Siemens has also seen a notable shift towards digitalisation, in terms of its order intake.
The company is also set to emerge as the market leader in the low-voltage switchgear segment, with its recent acquisition of C&S Electric’s business verticals (for ₹2,120 crore).
Backed by sound financials and a strong cash flow position, Siemens appears a good longterm bet at this juncture.
At the current market price, the stock trades at an EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortisation) of 25 times, which is lower than its three-year average of about 30 times.
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