Siemens shares recover from day's low despite mixed management commentary on outlook

Shares of Siemens ltd. took a sharp knock on Friday, December 12, after the company's management, in an analyst call, cut the margin guidance for a key business vertical.

The management of Siemens now believes that the margins for the DI segment or the Digital Industries business, will now range between 6% and 8% from the 12% to 14% projected earlier.

Digital Industries business is focused on industrial automation and digitization, helping companies transform digitally with end-to-end solutions. The said business contributes between 20% to 25% of Siemens' overall topline.

The management also highlighted that private sector capex remains largely muted, adding that it is difficult to say if the private capex pick-up seen in November and December will sustain going forward.

During the analyst call, the management highlighted that electronics, battery manufacturing, solar cells, Pharma, are some segments that are doing well.

On the flip side, Siemens believes that the motion segment margins will expand to be between 9.5% to 10% from 7.5% currently. The motion segment has been a topic of concern as the management has been revaluating the rail and metro capex.

Siemens' board, earlier this week, approved the sale of the Low Voltage Motor segment on a slump sale basis for a sum of ₹2,200 crore on a cash free, debt free basis, subject to other adjustments mutually agreed between the parties to the transaction.

Shares of Siemens are trading 6% lower after the announcement at ₹3,005. The stock is down 13% so far this year. The stock has since, recovered most of its losses, currently trading with losses of 1.6%.