23 Dec , 2024 By : Debdeep Gupta
Siemens India shares extended their losing streak on December 23, falling over a percent in the morning deals as investors offloaded their holdings in the counter following weak management commentary. Brokerages also cut their target prices on the engineering player.
In the previous session, Siemens India crashed 10 percent after analysts were disappointed by the fine print of the investor call that the company hosted on December 20, which alluded to a stagnant private capex, and concerns regarding the supply chain for digital industries.
Siemens India highlighted challenges impacting its growth outlook in its Q4 earnings call. The company noted potential delays in securing large HVDC orders as India favors LCC technology, whereas the parent co, Siemens AG, plans to focus globally on VSC technology.
In the railways segment, orders for locomotives and trainsets are moving slowly, with a higher share potentially being allocated to Indian Railways' factories. Additionally, the performance of its low-voltage business has been lackluster, with subdued activity in both Smart Infrastructure, linked to discus capital expenditure, and Digital Infrastructure, driven by private capital expenditure. These factors have tempered expectations for the company's near-term prospects.
In the call with analysts, the company confirmed that the 'private capex has not picked up meaningfully', souring the sentiment for the share price. However, private capex in semiconductors, batteries, solar PVs and the electric vehicles space has been good, the company added. The capex investment trajectory in most sectors appeared to be trending upwards, expect automotive and metals, which were stagnant, said Siemens.
At 9.35 am, Siemens India shares were quoting Rs 6,790.55, down 1.1 percent on the NSE.
Elara Capital reiterated its 'accumulate' call but slashed its target price to Rs 7,670 per share following the update. However, the brokerage believes that Siemens India will benefit from a multi-year capex cycle, and as a result, is penciling in an earnings CAGR of 22 percent from FY24 to FY27, and a 20 percent RoE in FY25-27.
Nuvama Institutional Equities downgraded the stock to a 'hold' call, cutting its target to Rs 7,000 per share, from Rs 8,350 earlier. The brokerage said, "The limited near-term triggers in HVDC and Railways segments call for caution."
Shares of the firm have seen a volatile trend on the bourses, falling 12 percent over the past six months, but up 67 percent over the past year.
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