Siemens Ltd is a subsidiary of Siemens AG Germany. Over the last few years, it has focused on restructuring its finances and business portfolio. In 1997, it hived off its loss-making consumer telecom division into a separate joint venture with Siemens AG called Siemens Public Communications Network. It has streamlined its operations in marketing, purchase and servicing and has attempted to control costs by reducing its debt burden. SL has implemented four voluntary retirement schemes in the past three years to slash its workforce by 2,000.

Siemens is planning to invest more in India. Siemens is also expanded its medical equipment factory in Goa by developing X-ray equipment for the company globally. The company is eyeing to outsource its IT needs from India and plans to expand its development centres in the country. Besides, penetrating further into the existing markets, it will explore new and untapped markets with new products, technology and solutions. The company plans to continue with its emphasis on cost reduction, through the alignment of various internal processes and the asset management measures already being practiced.

Products & services-

Company has a dominant presence in the field of electrical and electronics engineering. It has the capability to integrate diverse products, systems and services into turnkey solutions across the life cycle of a project. It is also a major player in power, industrial projects, industrial automation, healthcare engineering, transportation and telecommunications. Company has a wide presence across the country, where its operations include 12 manufacturing plants and 19 sales offices.

Company is planning to focus on supplying equipment for women's healthcare through its medical equipment division. Company is expanding operations in India through a "Centre of Excellence", which would act as the hub for working would act as the hub for working on high voltage direct current projects all over the world. This would be a new department and operate as a profit center within the transmission and distribution department.

Recently Developments-

Siemens bagged a major order from Steel Authority of India (SAIL) to provide extra high voltage power distribution package at Rourkela Steel Plant, Orissa. Siemens Industrial Solutions division, part of its industry sector has bagged a turnkey order valuing Rs 2.12 billion from SAIL for Rourkela steel Plant which is scheduled to be commissioned by the end of 2010. Siemens will provide an extra high voltage (EHV) power distribution package to the Rourkela Steel Plan for augmentation of their existing main step down substations (MSDs) and installation of new MSDs. This power augmentation program will enable the steel plant to enhance its production capacity from 1.9 million tons to 4.5 million. The power distribution package provided by Siemens willconvert the power received from the grid at 220 kv level and feed it into the rolling mills and oxygen plant.

Siemens also announced investment of Rs 2.75 billion for expansion at its steam turbine manufacturing facility located at Vadodara, Gujarat. The expansion program scheduled to be complete by 2010 will triple the manufacturing capacity at the factory. Now with three times the capacity and ability to manufacture steam turbine upto 100 MW locally, company will be in a better position to cater to broader requirement of our customers. The expansion program will add 3 productions bays amounting to 14,000 sq. mts. to the existing production facility and the factory will have the capacity to manufacture steam turbines up to 100 mw. In addition to the domestic market, the factory will be able to strengthen its export business to Asia, Africa and Europe. The expansion program at the factory will provide additional employment to about 200 people, the company said.

Siemens has received an order from Vedanta Aluminium (VAL) worth Rs 1.12 billion, to supply turnkey high-voltage power distribution equipment for an aluminum melting plant in Jharsuguda, Orissa. The project is part of the second phase of expansion at this facility, the aim being to increase the annual melting capacity from 0.5 to 1.75 million metric tons and triple the production of ingots. The order volume amounts to Rs 1.12 billion, which is around 17 million euros. Siemens had already supplied the high-voltage power system for the first expansion stage of the melting plant. The scope of supply and services from Siemens encompasses design, engineering, supply, installation, testing and commissioning of the 33 kV and 11 kV power distribution systems. This includes power and distribution transformers, high-voltage vacuum circuit breaker panels, SCADA systems, DC distribution, cabling and auxiliaries. The time frame for completion of the project is 18 months.

Company has bagged two orders worth Rs 1.09 billion from Power Grid Corporation of India (PGCIL) to construct and upgrade PGCIL's 400 kV Bachau and 400 kV Maithon substations. The scope of work for these projects, which are scheduled to be commissioned in the next 12 to 24 months, includes designing, engineering, supply and commissioning of substations on turnkey basis

At current market price, stock is trading at 8.97 P/E multiple of its FY2010 estimated earnings. We recommend investors to BUY "Siemens" with a medium to long-term investment prospective.