Siemens is a good long term play on the Indian railway space as well as other capital goods and consumer goods. The stock is valued at around 43 times historical earnings which is at par with what companies in the sector get. The big positive for the company is the allocations made to the Indian Railways in this budget and Siemens is likely to be a big beneficiary of this move. That is already evident from their growing order book and their strong sales performance in the last few quarters. So capital investment by Railways and the expansion of the order book could be the big stories for Siemens.

There is only one thing you need to be cautious about. Siemens has a high promoter shareholding and if the government comes out with the rule to increase public shareholding to 35%, then Siemens could have to dilute promoter share and bring more free-float into the market. This could depress prices although we do not see the impact being too serious.