Mobility Drives

SIEMENS

’ Growth, But Valuation and Capex Trends Weigh on Sentiment

’s stock is down 7% in CY25, underperforming the S&P BSE Capital Goods index. While order inflows and segmental growth remain healthy, margin pressures, weak private capex, and execution risks have tempered investor sentiment. The company’s mobility-led growth strategy and large order pipeline offer potential upside. Siemens reported ₹4,800 crore in order inflows, up 10% YoY but below the ₹5,100 crore estimate. The order backlog stands at ₹42,200 crore—2.4x trailing 12-month revenue. While mobility orders drove previous quarters, their momentum may have moderated, impacting sequential growth. Consolidated revenue rose 16% YoY to ₹5,200 crore. Mobility grew 29% with EBIT margin up 300 bps to 11.1%, contributing 22% of total revenue. Smart Infrastructure, the largest segment, grew 20% with a segment-high EBIT margin of 13.1%, despite competitive pressure. Digital Industries posted just 1% growth, with EBIT margin falling 234 bps to 7%. Siemens attributed the softness to weak backlog and delayed private capex. HDFC Securities sees early signs of recovery, but execution remains key. Siemens expects topline growth at 2x India’s real GDP, led by railway capex. A ₹21,000 crore Vande Metro tender opens soon, and execution of the ₹13,000 crore 9,000 HP locomotive order (30% of order book) could significantly boost earnings from FY26. Adjusted EBITDA grew 17% YoY to ₹640 crore, rebounding from prior declines. However, intense competition in project-based businesses has led to margin estimate cuts of 50–80 bps for FY26–27. The stock trades at 55x forward earnings—above historical averages—making margin recovery and execution critical for re-rating.