Engineering firm Siemens has emerged as the lowest bidder for a project for manufacturing 1,200 electric locomotives of 9000 HP (horsepower) worth over ₹20,000 crores at Dahod in Gujarat. Its share price surged 6.67% to reach an intraday high of 2948.00 apiece on the National Stock Exchange (NSE).
PTI reported that the estimated cost of the project is ₹ 20,000 crore. The company had reported an order backlog of ₹ 17,183 crores during the September quarter. Further, its new orders from continuing operations increased 25 percent year-on-year to ₹ 4,009 crores.
The Indian Railways had floated the tender at Dahod in April this year. The Dahod workshop is used for a periodic overhaul of steam locomotives and will now be upgraded to an electric locomotive manufacturing unit. They plan to manufacture 1,200 locomotives over a period of 11 years. The railways expect the delivery of the first locomotive from the Dahod facility in early 2024.
Brokerage firm Macquarie has an ‘outperform’ stance on Siemens with a price target of ₹ 3,120. This translates to an upside of 6.04% as compared to its current share price of ₹ 2942.35. It believes that the order will be substantially higher than the company’s current order backlog.
Siemens expects robust order flow for its mobility segment to continue and it is working with a 23 percent order inflow compounded annual growth rate (CAGR) until the financial year 2025. It reported an increase of 43 percent in new orders, 18 percent in revenue, and 20 percent in profit after tax from continuing operations in FY 22, as compared to the previous financial year.
Written by Simran Bafna
