Siemens Share Price Up by 7% to Reach 52-Week High After Strong Q1 Results

Siemens a leading industrial product and solutions company in India surged over 7% on 15 May reaching a 52 week high of ₹7,240 per share on the National Stock Exchange. This surge was fueled by the company's impressive performance in the March quarter which exceeded market expectations. Key factors contributing to this success were strong margins, higher other income and a substantial beat on profit.

Analyst Outlook and Bullish Sentiment

Industry analysts are optimistic about Siemens's future prospects particularly its potential to capitalize on robust railway and metro capital expenditure opportunities. Brokerages have retained bullish sentiments on the stock raising target prices as they foresee Siemens benefiting from a strong demand environment across various sectors including transmission, data centers, electric vehicles, railways, semiconductors, electronics and hydrogen technology.

In addition to its impressive quarterly results Siemens's board approved a proposal to demerge its energy business into a separate legal entity named Siemens Energy India Ltd. Shareholders of Siemens will receive one share of Siemens Energy India for every one share of Siemens under this scheme. The demerger expected to be completed in the next calendar year is anticipated to create two independent companies focusing on their core activities.

Siemens has provided a total capex guidance of ₹1,000 crore for its GIS factory and other mobility capex. Analysts at InCred have raised revenue estimates for FY24 and FY25 factoring in strong capex and order inflow driven by digital penetration and government expenditure. Earnings estimates have also been increased to reflect higher other income.

Brokerage Recommendations

Brokerages such as InCred, Jefferies, Nuvama and Motilal Oswal have issued positive recommendations on Siemens, citing various growth drivers and opportunities in different sectors. Target prices have been revised upwards reflecting the optimistic outlook on the company's future performance.

As of midday on 15 May Siemens shares were trading 6.6% higher at ₹7,100.40 on NSE. Year to date the stock has surged by 76% outperforming the benchmark Nifty 50 index. According to Bloomberg data analyst sentiment remains largely positive with a majority of analysts issuing buy ratings on the stock.

Despite the positive outlook, analysts have flagged certain risks, including a potential slowdown in key infrastructure verticals and export markets. Additionally, decisions made by Siemens's parent company could impact the company's growth trajectory and valuations in the future.

Final Words

Siemens did really well in the last quarter and people are excited about it because of its demerger announcement and experts think it's a good move. The company works in lots of different industries and is looking into new technologies which seems like it'll help them keep doing well in the future.