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Siemens India Ltd’s stock is down 7% in this calendar year so far, sharply underperforming the S&P BSE Capital Goods index, which continues to deliver positive returns. A sluggish revival in private capital expenditure and muted government spending have weighed on sentiment.

A key swing factor for a turnaround is sustained order inflow momentum. In the September quarter, Siemens reported order inflows of ₹4,800 crore, up 10% year-on-year but down sequentially.

JM Financial Institutional Securities said, Siemens’ order inflows continue to be robust relative to peer ABB India Ltd, but missed their estimate of ₹5,100 crore. “While details are not yet disclosed, we believe high levels of mobility orders in the previous two quarters may not have sustained," it added.

The order backlog at the end of the September quarter stood at ₹42,200 crore — around 2.4x trailing 12-month revenue. With Siemens shifting from an October–September financial year to April–March, FY26 will comprise six quarters. The September quarter was therefore FY26’s fourth quarter.

Siemens’ consolidated revenue rose 16% year-on-year to ₹5,200 crore, powered by the Mobility and Smart Infrastructure businesses, while Digital Industries lagged.

The mobility segment posted 29% revenue growth in the quarter, with Ebit margin improving nearly 300 basis points (bps) to 11.1%. The business contributed about 22% of consolidated revenue during Q4.

Smart infrastructure, the largest, contributing over half of Siemens’ total revenue, and comprising buildings automation, fire safety and security, etc, also saw strong growth of 20%. Ebit margin dipped slightly due to competitive pressure but remained the highest across segments at 13.1%.

Digital industries that provides industrial software, automation, etc. to industries, was the laggard with a subdued growth of 1% and Ebit margin decline of 234 bps to 7%. The management has attributed the stress in the segment to weak existing order backlog and delay in pick-up in private capital expenditure.

HDFC Securities believes the worst may be over for this segment, with early signs of recovery visible.

Siemens aims to grow its topline at twice India's real gross domestic product growth, primarily driven by the mobility segment, benefitting from railways’ capital expenditure (capex).

A major tender for Vande Metro coaches — pegged at ₹21,000 crore — opens next month. Siemens also expects to begin executing the 9,000 HP locomotive order after prototype approval by early 2026. With an order size of ₹13,000 crore (excluding maintenance) — about 30% of Siemens’ total order book — revenue recognition from this contract could meaningfully lift earnings.

Ebitda (adjusted for non-recurring demerger-related expenses) grew 17% year-on-year to ₹640 crore, marking a strong rebound after a decline of 12% in the previous three quarters.

But the company remains vulnerable to margin pressure, impacted by intense competition in project-based businesses. Antique Stock Broking has trimmed its Ebitda margin estimates by 50-80 bps for FY26 and FY27.

The stock trades at 55x one-year forward earnings, according to Bloomberg data — a premium to its long-term average multiples. A slower-than-expected margin recovery, weaker execution and a soft digital industries performance pose key downside risks.

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