Stock Tip - Siemens



Recommendation: Buy

Siemens is closely linked to the domestic industrial growth. Operating in many industries like automation, power, transportation, industrial solutions, healthcare services and equipment, Siemens is expected to report an EPS of Rs 17.5 in FY08 (ending in September), flat over the previous year. This is due to a bad quarter in March 2008. However, the company is expected to revert back to a healthy growth of 25% and report an EPS of Rs 22 next year.

Siemens is now available at a P/E of 12 times FY09E EPS. For an MNC with such a strong technological leadership, this is unwarranted. The strong pace of investment in power, railways and transport infrastructure will continue and Siemens remains one of the main beneficiaries.

I recommend Buy call on this stock with a price target of Rs 500 over 16-18 months. Hold on to this stock if you’ve already bought it.


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This entry was posted on Monday, November 17th, 2008 at 4:57 am and is filed under Stocks, Tips.
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