scorecardresearchSiemens shares rise 3.6% on biggest locomotive deal worth ₹26,000 crore

Siemens shares rise 3.6% on biggest locomotive deal worth 26,000 crore

Updated: 17 Jan 2023, 12:04 PM IST
TL;DR.
Siemens Limited's stock rallied 3.6% after the company signed a $3.25 billion contract to supply and service freight trains in India, its biggest locomotive deal ever. The stock has yielded a return of almost 24% in the past year and 127% in the last 5 years.
These new locomotives can replace 500,000 to 800,000 trucks over their lifecycle, said Siemens Mobility CEO Michael Peter.

These new locomotives can replace 500,000 to 800,000 trucks over their lifecycle, said Siemens Mobility CEO Michael Peter.

Shares of Siemens rallied 3.6 percent on Tuesday, January 17, after the company signed a 26,000 crore ($3.25 billion) contract to supply and service freight trains in India, the biggest locomotive deal in its history.

Siemens will deliver 1,200 electric locomotives and provide servicing for 35 years under the agreement.

During Tuesday’s trade, the stock opened at a price of Rs. 3,030 per share against the previous close of Rs. 2,943.60 per share and grew further during the early trading session to touch an intraday high of Rs. 3,051.80. However, the stock failed to hold onto this rally and was trading at 2,951.35, up by 0.26 percent, at 11:30 a.m. on the BSE.

The stock touched a 52-week high of Rs. 3,138.50 on September 15, 2022 and a 52-week low of Rs. 2,150.10 on May 09, 2022, indicating that at the current level, the stock is trading 37 percent above its 52-week low and just 6 percent below its 52-week high.

The stock has grown nearly 9 percent in the last six months. In the past one year, it has yielded a return of almost 24 percent. Furthermore, the stock has gained over 127 percent in the last five years.

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Stock price chart of Siemens

On Monday, the company informed that it has received an order for 1,200 locomotives of 9000 horsepower (HP) from Indian Railways, marking the single largest locomotive order in the history of Siemens Mobility and single largest order in the history of Siemens in India.

The Siemens-designed trains with a top speed of 120 km (75 miles)/hr will be assembled in India over the next 11 years, with deliveries starting in 24 months.

The locomotives will be assembled in the Indian Railways factory in Dahod, Gujarat.

Maintenance will be performed in four Indian Railways depots located in Vishakhapatnam, Raipur, Kharagpur and Pune. Locomotive assembly and maintenance will be implemented together with the staff of Indian Railways, the company said in an official filing.

“These new locomotives can replace between 500,000 and 800,000 trucks over their lifecycle," said Siemens Mobility CEO Michael Peter.

“The order was a big step for Siemens in India as the company had previously mainly provided components and infrastructure there. Siemens was also looking at other train contracts in India, the world's largest rail market with 24 million passengers travelling daily on more than 22,000 trains," he added.

Domestic brokerage Prabhudas Lilladher believes that this order win will boost Siemens Motion business revenue growth going forward and has maintained 'Accumulate' rating on stock with a target price of 3,290, reported Moneycontrol.

Siemens Ltd., established in 1957, is an engineering-related large-cap company with a market capitalisation of 104,831.12 crore. The company is focused on industry, infrastructure, digital transformation, transport as well as transmission and generation of electrical power. Its segments include energy, smart infrastructure, mobility, digital industries, portfolio companies and others.

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First Published: 17 Jan 2023, 12:04 PM IST