Siemens Energy shares zoom 5%, hit upper circuit post listing; brokerages project 30% upside

The shares of Siemens Energy India, the demerged arm of Siemens Ltd, zoomed 5% in Thursday’s early trade to hit their upper circuit at Rs 2,992.45 on the BSE after listing at Rs 2,850. With this listing, brokerage firms project up to 30% upside potential in the stock, setting a target price as high as Rs 3,700.

Analysts expect the newly carved-out entity to emerge as a leading beneficiary of India’s accelerating power transmission and distribution (T&D) investment cycle.

Here’s what brokerages say:

Jefferies: Buy| Target price: Rs 3,700| Upside potential: 29.8%

Siemens Energy on listing should be India’s largest listed pure-play power T&D equipment player at $10 billion+ market cap, followed by Hitachi and GE at $6.8-9.6 billion.
Jefferies believes that the company should see 40% EPS CAGR in FY24-27E, driven by the robust T&D pipeline and operating leverage, implying healthy upside potential below Rs 3,000/share.

Antique Broking: Buy| Target price: Rs 3,179| Upside potential: 11.5%

Siemens Energy India provides integrated products, solutions, and services across the energy value chain, focusing on oil and gas production, power generation, and transmission. The company aids customers in achieving decarbonization and net-zero targets.
Siemens Energy operates over ten state-of-the-art factories in India and has exclusive rights in South Asia (Bhutan, Nepal, Sri Lanka, and Maldives). The company is well-positioned to capitalize on industrial decarbonization and T&D spending, with a capex of Rs 9.2 trillion planned by FY32.
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Motilal Oswal: Buy| Target price: Rs 3,000| Upside potential: 5.3%

Motilal Oswal expects the company to benefit from a strong addressable market in the T&D business. Based on the financial details available for FY24, the brokerage firm arrived at pro-forma financials for the energy business.

They expect revenue/PAT CAGR of 25%/31% over FY25-27, with EBITDA margin expanding to 21.4% by FY27. Margins have already started expanding in 5MFY25.

HDFC Securities: Buy| Target price: Rs 3,000| Upside potential: 5.3%

Siemens Energy India (SEL) is a key player in decarbonization, offering a range of solutions including power generation, grid automation, green hydrogen, and battery storage. With exclusive rights for several South Asian countries, SEL has developed new business lines in PEM electrolyzers, hydrogen blend gas turbines, and battery storage.

The company has a strong revenue outlook with robust cash flow and a projected 30% PAT CAGR. The brokerage firm’s optimistic view is based on its growing market presence and innovative technologies.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)