Siemens Rating Buy: New avenues likely to propel growth
We like Siemens India as a unique bet on the digitisation & automation opportunity alongside the traditional domestic transmission and distribution play. The company will be one of the key beneficiaries of the gradual adoption of new technologies by Indian companies, leveraging on the R&D support provided by the parent and the scalable nature of some digitisation solutions. In an Indian context, the transmission opportunity continues to be lucrative given the technology gap. We believe Siemens can successfully tide over the slowdown of large Power Grid orders due to its focus on short cycle business. Adjusted for the large HVDC order in FY17, order intake grew 7% y-o-y to Rs127 bn led by growth of 27% in building technologies, 17% in digital factories and 19% under mobility. We maintain Buy with a revised target price of Rs1,238 (previously Rs1,253).