Siemens Energy India Share Price Target at Rs 3,300: Motilal Oswal Research
Motilal Oswal Financial Services has issued a BUY Call on Siemens Energy India, projecting robust growth for the company and setting a revised target price of Rs 3,300. The report underscores Siemens Energy India’s exceptional execution in the power transmission segment, margin expansion, and a strong order book. Investors are advised to capitalize on the company’s positioning in the rapidly evolving capital goods sector, where it stands to benefit from significant infrastructure investments.
Siemens Energy India Steams Ahead with Margin Expansion and Strong Execution
Siemens Energy India has delivered a stellar performance in 2QFY25, surpassing analyst estimates and prompting Motilal Oswal to revise its target price upward to Rs 3,300. The company’s revenue and profit growth are underpinned by robust execution in the power transmission business, capacity expansion, and a favorable industry outlook. The research highlights a 27% revenue CAGR and a 29% PAT CAGR forecast over FY25-27, with margins expected to remain resilient. Key risks include potential slowdowns in order inflows and supply chain disruptions. Investors are encouraged to leverage the current momentum, as the stock trades at a premium valuation justified by strong fundamentals and sector tailwinds.
Motilal Oswal Reiterates BUY: Target Price Raised to Rs 3,300
Motilal Oswal has reaffirmed its BUY recommendation on Siemens Energy India, raising the 12-month target price to Rs 3,300—implying a 10% upside from the current market price of Rs 3,000. The stock is valued at 60x Sep’27E EPS, reflecting confidence in the company’s earnings trajectory and operational leverage.
Financial Performance Surpasses Expectations
Siemens Energy India reported a 24% quarter-on-quarter revenue surge in 2QFY25, with EBITDA margins holding firm at 19.1% despite sectoral headwinds. The company’s 1HFY25 revenue reached Rs 34 billion, EBITDA stood at Rs 6.9 billion, and PAT clocked in at Rs 4.8 billion. The operational cash flow was robust at Rs 1.9 billion, and capex investments totaled Rs 922 million for the half-year.
Segmental Dynamics: Power Transmission Leads the Charge
The Power Transmission segment posted a 21% QoQ revenue increase to Rs 10.1 billion in 2QFY25, with EBIT margins expanding to 20.3%. For 1HFY25, this segment contributed Rs 18.5 billion in revenue and Rs 3.8 billion in EBIT. In contrast, the Power Generation segment’s revenue rose 28% QoQ to Rs 8.7 billion, but EBIT margins contracted to 14.9% due to higher input costs and competitive pressures.
Strategic Positioning: Siemens Energy India vs. Industry Peers
Siemens Energy India distinguishes itself with a comprehensive portfolio in industrial steam turbines, generators, digital control solutions, high-voltage direct current (HVDC), and grid services. The company’s product breadth positions it favorably against major competitors such as BHEL, GE Vernova T&D India, Hitachi Energy India, and Crompton Greaves Power & Industrial Solutions.
| Product Offering | Siemens Energy India | BHEL | GE Vernova | Hitachi Energy | Crompton Greaves |
|---|---|---|---|---|---|
| Industrial Steam Turbines | ✓ | ✓ | |||
| Industrial Generators | ✓ | ✓ | ✓ | ||
| HVDC | ✓ | ✓ | ✓ | ✓ | |
| Power Transformers & Reactors | ✓ | ✓ | ✓ | ✓ | ✓ |
| Grid Services | ✓ | ✓ | ✓ | ✓ | ✓ |
Capacity Expansion and Growth Outlook
The company is doubling transformer capacity and expanding GIS manufacturing, setting the stage for an estimated 27% revenue CAGR and 29% PAT CAGR over FY25-27. Power Transmission is forecasted to grow at a 35% CAGR, while Power Generation is expected to deliver a 15% CAGR. EBITDA margins are projected to remain robust at 20.7% in FY25E, 20.5% in FY26E, and 21.2% in FY27E.
Key Financial Metrics and Valuation
Siemens Energy India is trading at 77.1x FY26E and 55.4x FY27E P/E, with a price-to-book value of 18.5x and 13.9x for the respective years. The company’s return on equity (RoE) is forecasted at 26.6% for FY25E, 24.0% for FY26E, and 25.1% for FY27E. Free cash flow generation is expected to remain healthy, supporting ongoing investments and shareholder returns.
| Metric | FY25E | FY26E | FY27E |
|---|---|---|---|
| Net Sales (Rs Bn) | 70.2 | 84.4 | 112.9 |
| EBITDA Margin (%) | 20.7 | 20.5 | 21.2 |
| PAT (Rs Bn) | 11.7 | 13.9 | 19.3 |
| EPS (Rs) | 32.8 | 38.9 | 54.2 |
| P/E (x) | 91.5 | 77.1 | 55.4 |
Order Book Momentum and Industry Tailwinds
The order book is projected to grow at a healthy pace, supported by India’s Rs 3 trillion planned investment in transmission and distribution (T&D) through FY25-30. Siemens Energy India is well-positioned to benefit from the government’s push for high-voltage lines and grid modernization, with additional upside from HVDC projects and state-level initiatives.
Risks and Investment Considerations
Potential risks include a slowdown in order inflows and persistent supply chain challenges, which could impact margins and execution timelines. However, the company’s diversified product suite, strong balance sheet, and proactive capacity expansion mitigate these risks to a significant extent.
Investor Levels and Actionable Targets
Current Market Price: Rs 3,000
Target Price: Rs 3,300 (12-month horizon)
Stop-Loss Level: Rs 2,750
Upside Potential: 10%
Motilal Oswal’s conviction in Siemens Energy India is anchored in its superior execution, sector leadership, and the multi-year infrastructure upcycle underway in India. Investors seeking exposure to the capital goods sector should consider accumulating at current levels, with a disciplined approach to risk management.
