Nomura upgrades Siemens stock to Neutral on strong revenue growth

Nomura/Instinet upgraded Siemens Ltd. (SIEM:IN) to Neutral from Reduce, raising its price target to INR3,325.00 from INR2,780.00, following the company's strong fourth-quarter fiscal year 2025 performance. Siemens reported revenue of INR51.7 billion, a 16% year-over-year increase that exceeded analyst estimates, primarily driven by robust growth in its Mobility and Smart Infrastructure segments. While order inflows were slightly below Nomura's forecast, the company's order backlog increased 6% year-over-year, contributing to the more positive outlook.

Analysis

Nomura/Instinet has upgraded Siemens Ltd. (SIEM:IN) from a 'Reduce' to a 'Neutral' rating, simultaneously increasing its price target to INR3,325.00 from INR2,780.00. This revision follows Siemens' strong fourth-quarter fiscal year 2025 results, which saw revenue reach INR51.7 billion, representing a 16% year-over-year growth.

This revenue figure significantly surpassed analyst expectations, beating Nomura's estimates by 14% and Bloomberg consensus by 9%. The robust performance was primarily driven by substantial growth in the Mobility segment, which expanded by 29% year-over-year, and the Smart Infrastructure segment, which grew 20% compared to the prior year.

Despite the strong revenue, order inflows for the quarter, at INR48 billion, were 4% below Nomura's estimate, though still up 10% year-over-year. The company's overall order backlog increased 6% year-over-year to INR422.5 billion, slightly exceeding Nomura's projection by 1%. The Digital Industries segment showed modest 1% growth, attributed to slowed backlog accretion due to muted private capital expenditure, indicating a potential area for future monitoring.

Key Decisions for Investors

• Investors should consider the analyst upgrade and increased price target as a positive indicator for Siemens Ltd. (SIEM:IN) following its strong Q4 FY25 performance.
• Monitor the performance of the Digital Industries segment and broader private capital expenditure trends, as this area showed muted growth and could present future headwinds.
• Evaluate the sustainability of the high growth rates in the Mobility and Smart Infrastructure segments, which are currently primary drivers of the company's revenue expansion.