Siemens shares rose nearly 9 per cent in Monday’s trade. The scrip touched a fresh lifetime high of Rs 4,244.55 in today’s intra-day deals on the BSE after the company announced its plan to consider demerger of its energy business into a separate entity.
The company in an exchange filing today said, certain promoters of the company, namely Siemens Aktiengesellschaft, Germany, Siemens International Holding B.V. and Siemens Energy Holding B.V., and also Siemens Energy Aktiengesellschaft, which is the ultimate parent company of Siemens Energy Holding B.V., have each requested the board of directors of Siemens to consider, evaluate and thereafter start taking exploratory steps towards a potential demerger of the company’s energy business into a separate entity.
Further, the board has authorized the company’s management to commence exploratory steps as may be required to examine a potential demerger of the energy business. It also approved the immediate incorporation of a wholly-owned subsidiary in Mumbai for the aforesaid demerger plan.
Earlier in November, for the quarter ended September Siemens reported a net profit of Rs 571 crore, down 12.4 per cent from a year ago at a consolidated level. For the same period, the company reported revenue from operations of Rs 5,721 crore, up 25.3 per cent YoY.
Last month, UBS maintained a ‘neutral’ rating on Siemens and kept its price target for the stock at Rs 3,750 after the earnings announcement. Its target implies an upside of 2.9 per cent in the stock from the previous close.
Analysts at the brokerage said that while the company staged a stable quarterly headline performance, they see limited catalysts for the stock in the near term.
UBS said that the growth in the technology company’s top-line, EBITDA and PAT was healthy, and the EBITDA margin was 180 basis points above the brokerage’s forecast though 52 basis points lower than the consensus estimate.
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