Siemens Q3 Review: Shares Gain After Profit Beats Analysts' Estimates

Shares of Siemens Ltd. rose the most since Feb. 3 after its third-quarter profit beat analysts' estimates.

The company's third-quarter consolidated net profit rose 85% to Rs 462.7 crore, on the back of higher revenue, beating analysts' estimates of Rs 338.8 crore. The profit stood at Rs 247.7 crore in the same quarter of the previous fiscal.

Its revenue rose 17.5% to Rs 4,015.1 crore, the company said in the filing. It nearly met the consensus analyst estimates pooled by Bloomberg, which stood at Rs 4,059.8 crore.

The company's board appointed Juergen Wagner as an additional director.

Nomura maintains a 'neutral' rating with a target price of Rs 3,008, whereas Kotak Institutional Equities maintains a 'sell'  rating with a 'fair value' of Rs 2,900.

• Revenue from operations rose 17.4% to Rs 4,015.1 crore. (Bloomberg estimates: Rs 4,059.8 crore)

• Net profit was up 86.7% at Rs 462.7 crore. (Bloomberg estimates: Rs 338.8 crore)

• Ebitda up 95% at Rs 700.9 crore. (Bloomberg estimates: Rs 449.7 crore)

• Ebitda margin stood at 17.5% versus 10.5%.

Shares of Siemens Ltd. rose 3.31%, as of 12:57 a.m., to Rs 3,228,25 apiece compared with 0.05% gains in the benchmark Nifty 50. The total traded volume stood at 4.5 times its 30-day average. The relative strength index was at 72.3.

Out of the 31 analysts tracking the company, 17 maintain a 'buy' rating, nine recommend a 'hold,' and five suggest a 'sell', according to Bloomberg data.

The return potential, as calculated by the consensus of analyst estimates, stands at a downside of 2.9% over the next 12 months.

Here is what analysts think about Siemens Ltd.;

• Maintains a 'neutral' rating with a target price of Rs 3,008.

• Third-quarter execution was in line, and order inflows recorded a modest beat.

• EBIT margins and Ebitda margin are at multi-quarter high driven by higher execution of sales delivery in the digital industries segment.

• Ebitda margin beat was also driven in part by improved gross margin and, more so, by significantly lower other expenses.

• Consolidated sales delivery was largely in line, but better execution in the digital industries and smart infrastructure segments helped offset misses.

• Maintains a 'sell'  rating with a 'fair value' of Rs 2,900.

• The company witnessed a sharp rebound in execution, catching up with strong ordering trends. Siemens reported another quarter of healthy execution growth at 17% YoY.

• Ebitda margin beat, largely driven by sharp year-on-year declines in other expenses. These were also aided by higher volumes, better price extraction, and positive forex and commodity effects. Gross margin improvement on a sequential basis was muted.

• Most of the outperformance came from the digital industries segment. At a segment EBIT level, the gas and power segments reported in-line print.

• Smart infrastructure segment's margin improved, potentially due to better C&S Electric performance.