Siemens Q4 revenue grows 24%, board announces Rs 10/share dividend; should you buy, sell or hold shares?

Siemens shares succumbed to selling pressure on Wednesday, a day after the technology company reported a largely positive set of quarterly numbers with its margin falling slightly short of Street estimates, and declared a dividend of Rs 10 per share. 

The stock declined by Rs 59.4, or 1.6 per cent, to Rs 3,586.3 apiece on BSE, giving up about half of its gains in the past three consecutive sessions. As of Tuesday, Siemens shares had gained 2.8 per cent in three trading days.

The company—which follows an October-September financial year—registered 24.2 per cent growth in revenue to Rs 5,381.5 crore for the three months to September 30 while maintaining a double-digit quarterly margin. Its standalone net profit from continuing operations increased 36.2 per cent on a year-on-year basis to Rs 534 crore, in line with Street estimates, according to a regulatory filing. 

The company's quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 34.4 per cent to Rs 631.2 crore. 

According to Zee Business research, Siemens was estimated to report a quarterly net profit of Rs 498 crore, revenue of Rs 5,173 crore and EBITDA of Rs 621 crore. 

The technology firm's margin, a key measure of a business's profitability, improved by 90 basis points (bps) to 11.7 per cent for the quarter under review. Zee Business analysts, however, had expected Siemens to clock a margin of 12 per cent. 

While revenue from its energy segment increased 13.2 per cent to Rs 1,846.7 crore, that from its smart infrastructure unit expanded 24.8 per cent to Rs 1,728.6 crore. Its digital industries revenue increased 26 per cent to Rs 1,190.3 crore and mobility revenue jumped 68 per cent to Rs 667 crore. 

The company said its order backlog stood at Rs 45,518 crore and new orders increased 12 per cent to Rs 4,498 crore. 

Siemens also said it saw continued profitable growth across businesses during the quarter. The company announced investments of Rs. 416 crore in capacity expansions of power transformers used in the power transmission business, and vacuum interrupters for medium voltage switchgear used in the power distribution sector.

It said the expansion in capacities of both these products will enable it to meet the growing demand both in the domestic and global markets.

Also, Daniel Spindler tendered his resignation as CFO with effect from February 29, 2024. The company said Wolfgang Wrumnig will be executive director and CFO for a period of five years, starting March 1, 2024.

Siemens dividend

The board declared a dividend of Rs 10 per share for the year ended September 30, a payout of 500 per cent given the face value of Rs 2 per share. The dividend, if declared at the company's ensuing Annual General Meeting (AGM), will be paid from February 16, 2024, according to the filing. 

Should you buy, sell or hold Siemens shares now?

UBS maintained a 'neutral' rating on Siemens and kept its price target for the stock at Rs 3,750 after the earnings announcement. Its target implies an upside of 2.9 per cent in the stock from the previous close.    

Analysts at the brokerage said that while the company staged a stable quarterly headline performance, they see limited catalysts for the stock in the near term.

UBS said that the growth in the technology company's top-line, EBITDA and PAT was healthy, and the EBITDA margin was 180 basis points above the brokerage's forecast though 52 basis points lower than the consensus estimate. 

Catch all the highlights of the November 28 session on Dalal Street here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.