Siemens hits new high on record order book, market-cap crosses Rs 1 trn

The company not experiencing a slowing down in public and private capex spending; however, concerned about global headwinds impacting demand which could result in a slowdown in Capex spending.

Shares of Siemens hit a new high at Rs 2,845.75, up 1 per cent on the BSE in Wednesday’s trade, extending its rally on the bourses on strong order book position. In the past three months, the stock of the heavy electrical equipment company has outperformed the market by surging 26 per cent, as compared to 8 per cent rise in the S&P BSE Sensex.

A sharp surge in stock price, has helped Siemens enter the elite club of companies with a market capitalisation (m-cap) of over Rs 1 trillion. At 10:59 am; with a m-cap of Rs 1.01 trillion, Siemens stood at number 50th position in overall m-cap ranking on the BSE, the exchange data shows.

While announcing its June quarter (Q3FY22) results on August 2, Siemens said the company’s order backlog from continuing operations stands at an all-time high at Rs 17,856 crore. In Q3FY22, new orders from continuing operations stood at Rs 4,992 crore, registering a 20 per cent increase over the same period last year, the company had said.

The management said they are currently not experiencing a slowing down in public and private capex spending; however, they are concerned about global headwinds impacting demand which could result in a slowdown in Capex spending. The strong performance was across all businesses and included a significant order in Mobility business.

The company’s mobility business is expected to thrive with orders for electric locomotives (movement toward more rolling stock) and for propulsion systems in Vande Bharat train orders. Also, electrification and signalling orders will continue to see traction in conventional railways, while substantial ordering is expected from metro-rail for metropolis & tier-2 and -3 cities, according to analysts at Anand Rathi Share and Stock Brokers.

Decarbonisation as a theme is triggering new brownfield Capex so as to reduce carbon footprint and improve efficiency. Siemens stands to benefit from such ordering, analysts at HDFC Securities said. The brokerage firm maintains ‘add’ rating on the stock with a target price of Rs 2,882 per share. “We have recalibrated our estimates to factor in a strong order book and inflationary impact,” the brokerage firm said.