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

Shares of Siemens hit a new high at Rs 2,845.75, up 1% on BSE in Wednesday’s trading, extending its rally on the stock exchanges thanks to a strong order book position. Over the past three months, the heavy electrical equipment company’s stock has outperformed the market, jumping 26% against an 8% rise in the S&P BSE Sensex.

A sharp rise in share price helped Siemens enter the corporate elite club with a market capitalization (m-cap) of over Rs 1 trillion. At 10:59 a.m.; with an m-cap of Rs 1.01 trillion, Siemens held the 50th position in the overall BSE m-cap ranking, according to data exchange.

While announcing its June quarter (Q3FY22) results on August 2, Siemens said the company’s backlog from continuing operations hit a record high at Rs 17,856 crore. In Q3FY22, new orders from continuing operations amounted to Rs 4,992 crore, registering an increase of 20% compared to the same period last year, the company said.

Management said it is not currently experiencing a slowdown in public and private capital spending; however, they are concerned that global headwinds could affect demand, which could lead to a slowdown in investment spending. The strong performance was evident across all businesses and included a large order in the Mobility business.

The company’s mobility business is expected to flourish with orders for electric locomotives (move towards more rolling stock) and propulsion systems in Vande Bharat train orders. In addition, electrification and signaling orders will continue to gain momentum in conventional railways, while substantial orders are expected from the metro for metropolises and Tier 2 and Tier 3 cities, according to Anand analysts. Rathi Share and Stock Brokers.

Decarbonization as a theme triggers new investments in brownfields to reduce carbon footprint and improve efficiency. Siemens should benefit from such orders, analysts at HDFC Securities said. The brokerage maintains an “added” rating on the stock with a target price of Rs 2,882 per share. “We have recalibrated our estimates to take into account a strong order book and an inflationary impact,” the brokerage said.

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