Revenue growth improved 24% quarter-on-quarter, while EBITDA margin stood strong at 19.1% for the quarter, led by strong margins in the power transmission segment. Margins, however, remained soft in the power generation business.
The company has consistently improved its EBITDA margin for the past two quarters, even after adjusting for one-offs.Global brokerage firm Jefferies has initiated coverage on the recently-demerged Siemens Energy India with a ‘Buy’ rating and a price target of ₹3,500.
Jefferies’ price target implies a potential upside of 17% on Siemens Energy from Monday’s closing levels.
The brokerage sees Siemens Energy as a key beneficiary of India’s power capex cycle and expects further margin expansion.
Jefferies said that Siemens Energy is India’s largest listed power equipment player with a market cap of $12 billion, ahead of GE Vernova and Hitachi Energy, which are valued at $7-10 billion.The company offers solutions for power transmission, generation and industrials from eight factories in India.
Jefferies expects a 50% EPS CAGR and 30% revenue CAGR over FY24–27, led by operating leverage that could drive a 460 basis point improvement in margins by FY27.
Its price target values the company at 65x P/E on March 2027 earnings, which s about a 5% discount to Hitachi.
Motilal Oswal has also retained its ‘Buy’ rating, raising the target price to ₹3,300 from ₹3,000, based on 60x September FY27 estimated earnings.
Motilal expects Siemens Energy to benefit from continued strength in the transmission and distribution (T&D) market and upcoming capacity expansion plans.
The stock currently trades at 77.1x/55.4x FY26E/FY27E earnings. Motilal has raised its FY25E/FY26E/FY27E estimates by 13%/6%/8% following the strong H1 performance.
Key risks to the outlook include potential slowdown in order inflows and supply chain disruptions that could pressure margins.
