Siemens expects govt's infra push to crank up growth

Companies like Siemens, ABB, Honeywell always trade at a premium valuation because of the kind of technology they have and the long-term opportunity in the automation space, says Renjith Sivaram, AVP, ICICI Securities.

The Siemens quarterly numbers have been encouraging to say the least. What’s your view?
The quarterly result has been a positive surprise -- especially the execution margins and the order intake. Given the lockdown and Covid scenario, we were expecting a subdued performance but the company was able to surprise us positively.

There can be some bunch up because last quarter the performance was very bad and we believe that there can be some push up from last quarter’s execution towards this quarter. Nevertheless, the overall numbers have been much positive in terms of the overall performance.

Are valuations not already factored in or is it always a high valuation traded counter and one should not look at it like this?
Companies like Siemens, ABB, Honeywell always trade at a premium valuation because of the kind of technology they have and the long-term opportunity in the automation space. So they always trade at a premium compared to their peers in the industry.

You attended the analyst meet, what were some of the key takeaways, was the management continuing to be very bullish?
Their analyst meet is scheduled tomorrow Friday at 11 o’clock.

The comments in the press release point towards a very positive outlook. Can you talk to us about the comment they have given?
Overall, the management has indicated that they are expecting the government investments to continue because the focus should be the GDP getting back on track. Given the slowdown in the private sector, they expect the government investments and the infrastructure push from the government side to crank up overall growth.