Dow, S&P 500 end higher on extended oil slide, solid earnings while Nasdaq falls
Siemens (NS:SIEM) : SIL delivered revenue/EBITDA/APAT beat of 12/(6)/(0.2)%. Higher commodity prices and logistics costs resulted in EBITDA margin miss. By maintaining deliveries high, taking calibrated price hikes in certain categories, and using appropriate commodities hedging, SIL was able to mitigate the COVID-19 impact to a large extent. Due to the residual impact of COVID-19, component shortages were kept to a minimum, but delivery times were extended. Digitalisation is accelerating, which, along with product orders and a higher share of the private sector in the mix, will help margins re-rate. SIL has won new orders worth INR 33.8bn, bringing its order book to INR 135bn. The C&S Electric integration is progressing well, with domestic business growing and exports making gradual inroads.
We maintain REDUCE on SIL but increase TP to INR 2,035/sh (from INR 2,019/sh earlier). We believe that the current punchy valuation limits any further scope for re-rating.
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