9 January 2012
Annual Report Update | Sector: Capital Goods
Siemens
BSE SENSEX
S&P CNX
15,815
4,743
CMP: INR678
Expansion plans on track
TP: INR743
Neutral
Reiterates growing importance of India for Siemens AG
Siemens AG has identified Siemens India as a key partner in its global
footprint. Chairman, Mr Deepak Parekh says, "…the Indian market will
play a greater role in Siemens worldwide."
Healthy mix of long-cycle and short-cycle business, particularly in the
Industry segment, has helped Siemens to sustain growth.
Expansion plans are on track. The company has maintained healthy return
ratios despite ongoing capacity expansion.
The stock trades at 23x FY12E and 18x FY13E EPS. Maintain Neutral.
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1,6,12 Rel. Perf. (%)
M.Cap. (INR b)
M.Cap. (USD b)
Y/E Sept.
SIEM IN
337.0
951/627
1/-10/5
228.5
4.4
2011 2012E 2013E
133.5
15.7
10.0
29.7
18.5
131.3
22.8
5.2
13.2
1.6
24.3
25.5
163.5
19.6
12.5
37.0
24.3
154.2
18.3
4.4
10.4
1.2
25.9
26.9
Sales (INR b) 120.7
EBITDA (INR b) 12.9
PAT (INR b)
8.5
EPS (INR)
25.1
EPS Gr. (%)
BV/Sh. (INR)
P/E (x)
2.2
113.2
27.0
Chairman reiterates growing presence in parent's global footprint:
Siemens
has adopted an investment-led growth strategy in India. Its parent, Siemens AG has
identified it as a key partner in its global footprint. In the annual report, Siemens India's
Chairman, Mr Deepak Parekh says, "It is significant to note that the company's parent
Siemens AG increased its stake from 55% to 75% earlier in the year through an
investment of approximately 1 billion Euros. This is a clear message that Siemens Ltd
and the Indian market will play a greater role in Siemens worldwide."
New business verticals and base products to drive growth:
The company is
building on its SMART (simple-to-use, maintenance-friendly, affordable, reliable and
timely-to-market) base-level product initiative. Increased local footprint, higher
localization of products and increased outsourcing of base-level products from India
remains its key strategy. It is setting up six new hubs in India, with a planned expenditure
of INR12b-14b over the next 3-4 years. Four of these are for value-price products.
Diversified business mix helps sustain growth:
Healthy mix of long-cycle and
short-cycle business, particularly in the Industry segment, has helped Siemens to
sustain growth. Its Product Business group, comprising of Building Technologies (BT),
Drive Technologies (DT) and Industry Automation (IA) posted healthy growth, mitigating
the sluggish growth in Industry Solutions. The Industry Solutions business saw sluggish
demand, with customers postponing turnkey projects and new orders.
Working capital deteriorates due to fall in creditors:
Cash flow from operations
before capex declined sharply due to increase in working capital. Sundry creditors
declined from 114 days in FY10 to 90 days in FY11, which we believe has resulted
from deterioration in vendor credit due to tightening liquidity conditions. The company
has maintained return ratios at healthy levels despite ongoing capacity expansion.
Valuation and view:
With project award activity still not showing signs of meaningful
pick-up, we see Siemens posting moderate order intake growth in FY12. Siemens is
also a key partner in Siemens AG's global network, creating significant export
opportunity. We believe that the company will continue to be Siemens AG's growth
vehicle in the Middle East and North African markets due to cost advantage. The stock
trades at 23x FY12E and 18x FY13E EPS. Our target price is INR743 (on 25x FY12E
EPS). Maintain
Neutral.
P/BV (x)
6.0
EV/EBITDA (x) 16.8
EV/ Sales (x)
1.8
RoE (%)
RoCE (%)
* Standalone
23.2
24.5
Shareholding pattern % (Sep-11)
Others,
13.1
Foreign,
3.6
Domestic
Inst, 8.3
Promoters
75.0
Stock performance (1 year)
Siemens
Sensex - Rebased
980
880
780
680
580
Dhirendra Tiwari
(Dhirendra.Tiwari@motilaloswal.com ) +91 22 3029 5127
Deepak Kumar Narnolia
(Deepaknaranolia@MotilalOswal.com) +91 22 3029 5126

Siemens
Chairman reiterates growing presence in parent's global footprint
Siemens has adopted an investment-led growth strategy in India. Its parent, Siemens
AG has identified it as a key partner in its global footprint. In the annual report, Siemens
India's Chairman, Mr Deepak Parekh says, "It is significant to note that the company's
parent Siemens AG increased its stake from 55% to 75% earlier in the year through
an investment of approximately 1 billion Euros. This is a clear message that Siemens
Ltd and the Indian market will play a greater role in Siemens worldwide."
On the current state of affairs, he says, "the current state of the economy, with a
moderated pace of growth, is expected to spill over to the next financial year. Siemens
Ltd, however, is ideally poised to meet the infrastructure needs of the country through
its energy, industry and healthcare sectors." He remains positive on the company:
"with the company's continued focus on generating sustainable value to its customers
and stakeholders, I am confident that the company will continue to do well."
Siemens India is emerging as a key partner in Siemens AG's global growth strategy.
This is vindicated by growing investment by the Group in the country. Over the past 3-
4 years, Siemens India has invested nearly INR10b and plans to invest an additional
INR13b-14b over the next 3-4 years. It is also the key beneficiary of the Group's
growing presence in other developing regions like the Middle East. Siemens India has
meaningfully benefitted from ongoing infrastructure investments in the Middle East,
particularly Qatar. Along with Siemens AG, it has bagged orders worth INR95b (Siemens
India's share) from Qatar General Water and Electricity Corporation (Kahramaa),
Qatar's monopoly power and water distribution company, and a project from Ezdan
Real Estate QSC.
The company is building on its SMART (simple-to-use, maintenance-friendly, affordable,
reliable and timely-to-market) base-level product initiative. Nearly 70% of Siemens'
addressable market is in the low and mid market segment, for which the company has
developed the SMART strategy. It plans to launch 60 new products, of which 50-60%
will be out in the market in the next 12-18 months. During FY11, Siemens launched 10
value-priced products.
Capex on track; new business verticals to drive growth beyond FY12
New business verticals
Proposed capex: INR13b (FY11-14)
Valued-price Products
Wind Power TG (INR5b)
Power project EPC
Signalling systems
Gross block to double by FY13; will drive growth beyond FY12 (INR b)
24.9
20.7
17.2
Ring main units
14.2
8.7
9.9
11.3
6.5
Industrial steam turbines
Upto 150 MW
5.5
5.5
5.2
Iron / steel making equipment
Source: Company/MOSL
9 January 2012
2

Siemens
During the year, the company added INR4b (excluding consolidation of Siemens
Heathcare, Siemens Building Technology, Siemens Visa Securities and Siemens Rolling
Stock) to its gross block, mainly in the Energy segment. It is building two factories in
Goa for medium voltage products and energy automation relays, and a steam turbine
and compressor manufacturing facility at Vadodara. It has also significantly ramped
up its existing X-ray cathode rod production facility at Goa in the Healthcare segment.
The company is setting up a wind turbine factory, with capacity up to 2.3MW, at an
investment of INR5b. We believe these new verticals will drive growth beyond FY12.
Capex in line with the company's target of INR13b-14b in the next 3-4 years
Capex (INR m)
5.0
3.7
2.5
1.9
0.8
2,267
109
FY03
337
FY04
700
FY05
FY06
1,900
1,509
FY08
1,689
FY09
FY10
FY11
2.5
1.8
2.0
3,469
5,900
% of sales
4.9
FY07
Source: Company/MOSL
Diversified and healthy business mix helps sustain growth
Siemens India is a multi-dimensional company, with a strong product portfolio and servicing
capabilities in three core sectors of the Indian economy: Infrastructure, Industry and
Consumer (Healthcare, Water). With its strategy of aggressively widening its product
footprint in India, Siemens India stands to significantly benefit from the long-term growth
Diversified business mix provides growth stability
Siemens
Revenues: INR119b; EBIT: INR12b
Energy
Rev: 50%, EBIT: 59%
Industry
Rev: 41%, EBIT: 33%
Healthcare
Rev: 9%, EBIT: 4%
Diversified business mix
helping Siemens to sustain
growth and profitability
Power Transmission
Rev: 26%, EBIT: 33%
A&D
Rev: 21%, EBIT: 14%
Power Distribution
Rev: 9%, EBIT: 5%
Industrial Sol & Serv.
Rev: 10%, EBIT: 5%
Power Generation
Rev: 4%, EBIT: 5%
Mobility
Rev: 10%, EBIT: 10%
Oil & Gas
Rev: 11%, EBIT: 17%
Building Technologies
Rev: 6%, EBIT: 4%
Source: Company/MOSL
9 January 2012
3

Siemens
opportunity in the country. The company is investing INR16b over the next 2-3 years,
which we believe would help ensure not only sustainable but also profitable growth through
enhanced indigenization and localization of products.
Healthy mix of long-cycle and short-cycle business, particularly in the Industry segment,
has helped Siemens to sustain growth. Its Product Business group, comprising of Building
Technologies (BT), Drive Technologies (DT) and Industry Automation (IA) posted healthy
growth, mitigating the sluggish growth in Industry Solutions. The Industry Solutions business
saw sluggish demand, with customers postponing turnkey projects and new orders.
New business structure aligned to global business verticals
The year FY12 will see major restructuring of businesses in terms of reporting and addition
of some new business segments, as the company is expanding into new business verticals.
It will now report under four separate segments - Energy, Industry, Health and Infrastructure
& Cities.
All infrastructure-related businesses will be transferred to the new segment, Infrastructure
& Cities, resulting in increased focus on Infrastructure, making Siemens better-positioned
to reap the benefit of rising infrastructure spend in the country. The division will comprise
of Railway Systems, Mobility, Low & Medium Voltage Systems, Smart Grid and Building
Technology. The Health segment will be further divided into three sub-segments - Imaging
& Therapy, Clinical Products, and Diagnostics.
Two new sub-segments, Wind and Solar, will be added in the Energy segment, in line with
Siemens' aggressive expansion plans in renewable energy. The company is in the process
of setting up a wind turbine factory, with a capacity up to 2.3MW at an investment of
INR5b. Production at Vadodara is slated to commence in 2013. The facility will have an
annual capacity of 250MW, which will be scaled up to 500MW by 2015 to meet market
demand.
Siemens
Energy
Industry
Industrial Solutions
Drive Technologies
Customer Services
Healthcare
Imaging & Therapy
Clinical Products
Diagnostics
Infrastructure & Cities
Rail Systems
Mobility
Low & Medium
Voltage Systems
New business structure to
have an increased focus on
Infrastructure, Healthcare
and renewable
Fossil
Oil & Gas
Power
Transmission
Wind
Metals Technology
Smart Grid
Solar
Build Technology
9 January 2012
4

Siemens
Industry segment will see two new sub-segments - Customer Services and Metals
Technology. The newly acquired VAI Metals will be part of the Metals Technology business.
The company plans to make India its global hub for manufacturing key steel plant equipment.
VAI has ~20% market share in steel plant building/modernization in India. The company
hopes to increase its share to 25% in the next couple of years along with growth in market
size. VAI currently has one manufacturing facility in India at Thane, Maharashtra. Siemens
is planning to set up another manufacturing facility with an investment of around EUR40m
(INR2,400m).
Ongoing consolidation
Siemens has amalgamated its subsidiaries - Siemens Building Technologies, Visa
Securities Technics (both in building products), and Siemens Rolling Stock (bogie
manufacturing).
The company also acquired (from Siemens AG) and amalgamated with itself, Siemens
Healthcare Diagnostics (SHDL). The merger was first announced in October 2009.
SHDL focuses on Immunodiagnostics and the Clinical Chemistry business, with a
significant presence in Critical Care, Hematology, and Microbiology and Plasma Protein.
Siemens AG's wholly owned subsidiary, Siemens Diagnostic Holding II B.V.,
Netherlands holds 68.73% equity stake in SHDL. SHDL has been merged with
Siemens India, with the intention to strengthen its Healthcare portfolio and to provide
in-vitro and in-vivo diagnostic solutions in India. According to the company, the
complementary portfolios of the two companies will enable it to leverage a combined
customer base and expand its installed base in India.
In October 2011, the company announced its intention to merge Siemens VAI Metals
Technology, Kolkata (a 100% subsidiary of Siemens AG) and Morgan Construction
Company, Mumbai (a 100% subsidiary of VAI). The matter is awaiting shareholders'
approval.
Segment-wise highlights
Energy: Year ended with some milestone orders; outlook positive
During the year, new order intake was INR58.16b, down 24%. However, base orders
grew 11%, excluding large orders received in Power Generation and Transmission.
Sales grew 42% while profit from operations grew by 1%. Despite tough competition,
the company was able to retain its leadership.
Siemens received several milestone orders. This includes a contract from Torrent
Power to install a 1,100MW combined cycle power plant. It also launched a new wind
turbine (SWT-2.3-113) for the Indian market. The company is investing INR6b in
wind WTG manufacturing and aims to be a key player in India.
Siemens is positive on the Energy sector and believes that the government is addressing
the key issues of fuel production, linkages and environmental clearances. Siemens is
well positioned to capitalize on the opportunities.
9 January 2012
5

Siemens
Energy: Revenue (INR b) and revenue growth (%)
100
T&D (INR b)
Oil & Gas (INR b)
Generation (INR b)
Energy (Grow th %) 44
Energy: EBIT (INR b) and EBIT margin (%)
T&D (INR b)
Oil & Gas (INR b)
12,000
Generation (INR b)
Energy (EBIT Margin %)
16
12
8
4
0
FY09
FY10
FY11
FY12E
FY13E
75
50
33
9,000
22
6,000
25
0
FY09
FY10
FY11
FY12E
FY13E
11
0
3,000
0
Source: Company/MOSL
Industry & Railways: Healthy business mix driving growth
Siemens continues to enjoy leadership across various industries. It has strong presence
in motors, automation and drives and industrial turnkey projects. Railways accounts
for a large chunk of the overall pie. Siemens is a dominant player in the sector, with
local manufacturing capacity for traction motors, rolling stock and control panels. It
has bagged several key railway projects and will continue to benefit from overall
investments in the sector. The segment is underperforming since FY10 mainly due to
delayed decision making in Railways.
During the year, new order intake in the Industry segment was INR52.91b, up 35%.
Sales grew 12%, while profit from operations grew 1%. FY11 was a challenging year
for the industry, as rising interest rates led to companies taking a cautious approach
towards new projects. Growth during the year was supported by the Products business
(drives, building automation products), even as Industry Solutions (Projects business)
saw sluggish demand, with turnkey projects and new order finalization getting delayed
across sectors. The Mobility business was strengthened during the year by addition of
bogie manufacturing capabilities.
The market is expected to be in correction mode, with economic impasse. However,
demand should improve, with the government facilitating investments. Margins are
expected to be under pressure due to higher input costs, higher labor costs and increasing
interest rates.
Industry (excluding Mobility): Revenue and growth
Industry (INR b), excluding Mobility
44.4
35.8
27.1
18.3
9.0
12.2
19.5
3.9
32.4
33.7
38.2
19.5
13.6
10.0
19.3
50.3
48.2
45.7
50.3
6.3
Grow th %
59.9
Industry (excluding Mobility): EBIT and EBIT margin
Industry excluding Mobility (INR m)
10.2
9.2
8.1
7.7
7.3
6.6
EBIT margin (%)
8.0
6.0
6.9
7.6
Source: Company/MOSL
9 January 2012
6

Siemens
Mobility: Revenue and growth
Mobility Sales (INR b)
100.5
10.3
36.6
19.4
18.4
3.5
1.5
1.8
2.5
-0.5
-26.2
10.0
39.7
7.0
7.5
47.6
20.0
Grow th (%)
10.2
8.3
Mobility: EBIT and EBIT margin
15.4
12.6
Mobility (INR m)
12.4
8.3
6.5
8.4
EBIT margin %
12.0
15.8
10.0
9.9
-0.7
-2.7
Source: Company/MOSL
Healthcare: a fast growing segment; new technologies, tier-2 cities to drive growth
During the year, new order intake was INR11.20b, up 44%. Sales grew 39%, while
profit from operations grew 1%.
The Healthcare market grew at a healthy pace in FY11, despite a challenging
macroeconomic environment, and is likely to maintain momentum on the back of rapid
urbanization, increasing health insurance penetration, changing disease profiles, etc.
The Indian medical equipment market, estimated at around INR40b, is expected to
grow at over 15% in the next several years. Siemens, with a market share of 18-20%
(source: industry) is the market leader in the space, followed by Wipro GE and Phillips.
The company has a manufacturing base in Goa for high-end products like X-ray mobile
machines. However, nearly 80% of products sold are sourced from the parent. We
expect Siemens to enhance its product base in India, which will provide long-term
growth opportunities in the space. We believe Siemens India will be a major sourcing
destination for medical diagnostic products.
Corporates across segments are expanding their presence in tier-2 and tier-3 cities,
which will lead to affordable, personalized healthcare solutions.
Healthcare: Revenue and growth
Healthcare (INR b)
32.9
21.1
12.4
15.4
26.8
38.8
Grow th %
39.0
25.0
20.0
5.4
4.2
2.4
-10.2
-10.3
0.5
2.2
Healthcare: EBIT and EBIT margin
EBIT (INR m)
5.5
EBIT margin %
7.6
6.9
4.9
7.0
6.0
Source: Company/MOSL
9 January 2012
7

Siemens
Balance sheet robust; working capital deteriorates due to fall in creditors
Cash flow from operations before capex was INR2b in FY11, down sharply from
INR9.6b in FY10 due to increase in working capital. Sundry creditors declined from
114 days in FY10 to 90 days in FY11, which we believe has resulted from deterioration
in vendor credit due to tightening liquidity conditions. As a result, cash balance declined
to INR12.8b in FY11 from INR18.5b in FY10.
During the year, debtor-days improved to 126 (129 in FY10). Inventories also improved
to 24 days from 27 days a year ago.
The company has maintained return ratios at healthy levels despite ongoing capacity
expansion. RoCE and RoE saw marginal declines, despite meaningful contraction in
EBITDA margin. Returns were positively impacted by improvement in asset-turnover,
which increased from 2.8x in FY10 to 3.3x in FY11.
Working capital deteriorated due to decrease in
sundry creditors
Net w orking capital (% of sales)
146
Debtors (days)
110
89
-4%
-8%
-10%
-17%
22
21
30
34
97
83
89
1%
-1%
43
39
35
32
42
27
24
149
129
2%
1%
8%
126
99
97
Debtors and inventories showed marginal improvement
Debtors (days)
Inventory (days)
89
97
83
89
146
110
149
129
126
Source: Company/MOSL
Robust earnings outlook
We expect Siemens India to post earnings CAGR of 21% over FY11-13, on the back of
16% revenue CAGR and improving margins. Investment in new business verticals will
provide growth catalysts beyond FY12. Siemens has invested in cost restructuring and
project management, which will help the company to maintain margins, going forward.
Excluding the impact of two mega projects awarded by Torrent Power and Qatar General
Water & Electricity Corporation (Kaharamma) in FY10 and FY11, base orders registered
a growth of 25%.
Order intake moderate in FY11, base orders still robust
Order intake (INR b)
80
45
30
17
99
101
87
37
41
-14
82
24
1
-1
88
41
0.6
Grow th (%)
124
123
Order book remained stagnant due to moderation in
order intake
Order book (INR b)
1.2
1.3
1.7
1.2
1.2
BTB (x TTM sales)
1.2
1.5
1.2
1.0
0.9
Source: Company/MOSL
9 January 2012
8

Siemens
Expect exports to remain robust
Exports (INR b)
35
37
24
20
15
5
1
7
1
4
9
27
31
21
16
26
30
40
22
17
22
24
Exports (% of sales)
Project sales to remain at 30-40% of sales
Project sales (INR b)
Projects (% of sales)
33
19
23
39
40
34
50
49
40
37
31
35
38
16
15
2
3
6
Source: Company/MOSL
Received two mega-orders in FY10 and one mega-project in FY11
Client
Torrent Power
Torrent Power
Gurgaon Metro
PGCIL, India
Kahramaa, Qatar
Kahramaa, Qatar
Ezdan, Qatar
PGCIL, India
PGCIL
Vedanta Alumunium
Kahramaa, Qatar
Adani Power
Value (INR m)
20,000-25,000
NA
NA
1,000
24,910
6,080
3,420
3,600
1,090
1,120
790
7,200
Date
1QFY11
2-Ju-10
11-May-10
2-Feb-10
19-Jan-10
10-Nov-09
8-Oct-09
30-Sep-09
22-Jul-09
22-Jun-09
4-May-09
30-Apr-08
Execution
36 Months
36 Months
30 Months
11 months
36 months
24 months
15 months
27 months
24 months
-
24 months
-
Project
DGEN Gas based megha power project
Two CCPP with total 1600 MW capacity
Total rail Solutions for 6.1 km stretch of line
1 unit of 765 KV Substation job.
Total order Rs. 29,560 million, with Siemens AG, substation works.
Cables works.
Ezdan Real Estate QSC, substation jobs, with SAG (Rs 610 million).
2 units of 765 KV substation jobs.
I unit of 765 KV substation job.
HV distribution system at Smelter plant at Jharsuguda, Orissa
Air insulated Circuit breakers.
With SAG (6,600 million), EPC contract to set up a bipolar 500 KV
HVDC line, transmission capacity of 2,500 MW.
PWGR: Powergrid Corporation of India, Kahramaa: Qatar General Electricity & Water Corporation
Source: Company/MOSL
Revenue to grow at 16% CAGR, also boosted by short-cycle sales and product exports
FY05
Key earnings assumptions
Order intake (INR b)
Growth (%)
Order book (INR b)
BTB (x TTM sales)
Revenues (INR b)
Execution Ratio (%)
41.2
36.8
35.1
1.3
27.5
0.36
82.0
98.9
75.3
1.7
45.1
0.29
1.67
73.5
6.2
11.4
91.1
8.9
101.4
23.6
94.1
1.2
77.3
0.40
1.22
76.2
5.1
9.2
90.6
9.4
87.2
-14.0
98.3
1.2
83.0
0.45
1.19
74.8
5.2
10.8
90.9
9.1
88.0
0.9
102.3
1.2
83.9
0.44
1.22
68.5
6.5
12.9
87.9
12.1
124.3
41.3
135.8
1.5
93.2
0.36
1.46
70.4
6.8
8.9
86.1
13.9
122.9
-1.1
139.2
1.2
119.4
0.46
1.17
73.2
7.6
8.6
89.4
129.0
5.0
135.6
1.0
132.6
0.50
1.02
71.0
8.2
9.0
88.2
167.7
30.0
140.7
0.9
162.7
0.53
0.86
71.0
8.1
8.9
88.0
FY06
FY07
FY08
FY09
FY10
FY11
FY12E
FY13E
Book to bill (x)
1.28
Cost assumptions (%)
RM/sales
70.1
Employee cost/sales
Other Expenses/sales
Total cost/sales
EBITDA margin
7.4
12.3
89.8
10.2
10.6
11.8
12.0
Source: Company/MOSL
9 January 2012
9

Siemens
EBITDA margin to improve, driven by increased localization
EBITDA (INR b)
12.1
10.2
8.9
9.4
9.1
19.6
7.4
7.8
10.2
12.9
12.9
15.7
EBITDA margin
13.9
11.8
10.6
12.0
Expect PAT CAGR of 16% over FY11-13
76
PAT (INRb)
Grow th (%)
41
44
39
27
19
2
-10
24
2.8
4.0
Source: Company/MOSL
Increased localization and product leadership
to mitigate pressure on margins
Siemens ended FY11, with just 2% growth in net profit,
impacted by pressure on margins across business segments
due to headwinds from rising commodity prices
Valuation and view
We expect Siemens to post earnings CAGR of 21% over FY11-13 on the back of its
diversified portfolio, increased outsourcing by parent and increased localization of
products.
With project award activity still not showing signs of meaningful pick-up, we see
Siemens posting moderate order intake growth in FY12.
Siemens is also a key partner in Siemens AG's global network, creating significant
export opportunity. We believe that the company will continue to be Siemens AG's
growth vehicle in the Middle East and North African markets due to cost advantage.
Increased localization should keep margins intact at 12-13%, despite increasing
completion and pricing pressure, particularly in the Power segment.
The stock has outperformed the Sensex by 3% over the last 12 months and is now
trading at 37% discount to its long-term 12-month forward P/E. The Capital Goods
sector is trading at a much higher discount of 44% to its long-term 12-month forward
P/E.
We model an EPS of INR29.7 (up 18%) for FY12 and INR37 (up 24%) for FY13.
The stock trades at 23x FY12E and 18x FY13E EPS. Our target price is INR743 (on
25x FY12E EPS). Maintain
Neutral.
Siemens: Long-term P/E (x)
P/E (x)
72
68.2
54
36
18
11.2
0
5
31.6
35
25
20.6
15
LPA of 22.7x
Avg(x)
Peak(x)
Min(x)
45
Engineering Sector: Long-term P/E (x)
Capital Goods Sector - PE (x)
Source: Company/MOSL
9 January 2012
10

Siemens
Financials and Valuation
Income Statement (Standalone)
Y/E September
Total Revenues
Change (%)
Raw Materials
Staff Cost
SGA Expenses
EBITDA
Change (%)
% of Total Revenues
Depreciation
Interest
Other Income
EO Items (net)
PBT
Tax
Rate (%)
PAT
Adjusted PAT
Change (%)
Consolidated PAT
Con.Adjusted PAT
Change (%)
2008
85,594
8.7
64,052
4,476
9,276
7,791
5
9.1
637
0
519
1,246
8,918
2,984
33.5
5,933
4,687
-9.5
5,995
4,760
-22.3
2009
84,502
-1.3
57,866
5,499
10,906
10,232
31
12.1
779
59
635
4,289
14,318
3,870
27.0
10,448
6,538
39.5
7,046
5,545
16.5
2010
93,219
10.3
65,663
6,325
8,299
12,932
26
13.9
1,016
106
776
0
12,587
4,315
34.3
8,271
8,271
26.5
7,578
7,578
36.7
2011
120,750
29.5
88,350
9,174
10,368
12,857
-1
10.6
1,522
127
1,542
0
12,750
4,295
33.7
8,454
8,454
2.2
8,677
8,677
14.5
(INR Million)
2012E
133,459
10.5
94,756
11,009
11,963
15,731
22
11.8
1,676
0
900
0
14,955
4,935
33.0
10,020
10,020
18.5
10,020
10,020
15.5
2013E
163,533
22.5
116,108
13,211
14,627
19,587
25
12.0
1,995
0
1,000
0
18,592
6,135
33.0
12,457
12,457
24.3
12,457
12,457
24.3
Balance Sheet
Y/E September
Share Capital
Reserves
Net Worth
Loans
Net Deferred Tax Liab
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventory
Debtors
Cash & Bank Balance
Loans & Advances
Other Current assets
Current Liab. & Prov.
Creditors
Other Liabilities
Provisions
Net Current Assets
Application of Funds
E: MOSL Estimates
2008
674
20,017
20,691
11
-910
19,791
9,911
4,339
5,572
870
5,236
57,253
7,621
34,328
9,131
6,173
2009
674
28,492
29,166
6
-1,119
28,053
11,348
5,053
6,295
1,057
4,770
69,212
9,722
34,583
14,449
10,458
2010
674
34,103
34,778
2
-1,313
33,467
13,549
6,209
7,340
2,465
3,885
79,281
6,822
33,023
18,534
12,390
8,512
59,505
29,151
14,704
15,651
19,776
33,467
2011
681
37,481
38,162
0
-1,889
36,273
19,983
8,289
11,694
2,489
0
85,505
8,078
41,733
12,750
14,060
8,883
63,415
28,342
17,034
18,039
22,090
36,274
2012E
681
43,558
44,239
30
-1,889
42,380
22,349
9,407
12,942
400
0
102,744
10,238
46,071
21,262
15,000
10,173
73,705
36,564
14,626
22,516
29,038
42,381
(INR Million)
2013E
681
51,283
51,964
30
-1,889
50,105
26,599
11,402
15,197
1,000
0
123,052
12,545
56,452
25,575
16,000
12,480
89,144
44,804
17,921
26,419
33,908
50,106
49,140
36,002
5,867
7,272
8,113
19,792
53,281
23,527
16,129
13,625
15,931
28,054
9 January 2012
11

Siemens
Financials and Valuation
Ratios
Y/E September
Basic (INR)
EPS
Growth (%)
Consolidated EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation (x)
P/E (Standalone)
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors. (Days)
Asset Turnover (x)
Leverage Ratio
Debt/Equity (x)
2008
13.9
-9.5
14.1
15.8
61.4
3.0
25.2
2009
19.4
39.5
16.5
21.7
86.5
5.0
30.2
2010
24.5
26.5
22.5
27.6
103.2
5.0
23.8
2011
25.1
2.2
25.7
29.6
113.2
6.1
28.1
2012E
29.7
18.5
29.7
34.7
131.3
10.0
39.4
2013E
37.0
24.3
37.0
42.9
154.2
12.0
38.0
27.0
22.9
16.8
1.8
6.0
0.9
22.8
19.5
13.2
1.6
5.2
1.5
18.3
15.8
10.4
1.2
4.4
1.8
25.6
26.5
26.2
27.5
25.9
27.1
23.2
24.5
24.3
25.5
25.9
26.9
146
32
154
4.3
149
42
102
3.0
129
27
114
2.8
126
24
86
3.3
126
28
100
3.1
126
28
100
3.3
0.0
0.0
0.0
0.0
0.0
0.0
Cash Flow Statement
Y/E September
PBT before EO Items
Add: Depreciation
Interest
Less: Direct taxes paid
(Inc)/Dec in WC
CF from Operations
EO Income
CF from oper. Incl. EO items
(Inc)/dec in FA
(Pur)/Sale of Investments
CF from Investments
(Inc)/Dec in Networth
(Inc)/Dec in Debt
Less: Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
E: MOSL Estimates
2008
7,672
637
0
2,984
1,786
7,111
1,246
8,357
-1,509
-561
-2,069
-605
-5
0
1183
-1,793
4,495
4,636
9,131
2009
10,029
779
59
3,870
-2,500
4,496
4,289
8,785
-1,689
467
-1,222
-209
-5
59
1,972
-2,245
5,318
9,131
14,449
2010
12,587
1,016
106
4,315
240
9,633
0
9,633
-3,469
885
-2,584
-888
-3
106
1,966
-2,963
4,087
14,449
18,536
2011
12,750
1,522
127
4,295
-8,098
2,006
0
2,006
-5,900
3,885
-2,015
-3,273
-2
127
2,373
-5,776
-5,785
18,534
12,749
2012E
14,955
1,676
0
4,935
1,564
13,260
0
13,260
-835
0
-835
0
30
0
3,943
-3,913
8,512
12,750
21,262
(INR Million)
2013E
18,592
1,995
0
6,135
-557
13,894
0
13,894
-4,850
0
-4,850
0
0
0
4,731
-4,731
4,313
21,262
25,575
9 January 2012
12

Siemens
N O T E S
9 January 2012
13

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