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DRChoksey Report
Brokerager firm DRChoksey has initiated coverage on Siemens Energy Ltd. with a 'Buy' rating and has set a target price of Rs 4,554, implying a potential upside 41% from the reports current market price of Rs 3,230.
The brokerage expects the company's revenue/Ebitda/PAT to grow at 25%/33%/35% CAGR over next three years, backed by orderbook of Rs 19,300 crore providing two times revenue visibility. The top 10 Heavy Power Equipment companies trade at 90x average.
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The brokerage also highlighted that Siemens Energy currently trades at discount compared to its peers, trading at ~43x FY28E, compared to its peers at 60x FY28E and has assigned multiple of 60x PE on FY28 EPS of 75.90.
The brokerage have not factored HVDC into the target price, while new HVDC VSC orders and nuclear energy provide additional upside optionality.
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The brokerage believes the company is well positioned to benefit from India's next phase of power sector investment, driven by rising electricity demand, renewable energy integration, industrial electrification and large-scale transmission infrastructure spending. It views Siemens Energy India as a key play on the country's transmission and generation opportunity, supported by a diversified portfolio spanning grid infrastructure, power generation, services and engineering research and development.
According to the report, the company's transmission business is expected to be the primary growth driver. DRChoksey highlighted Siemens Energy India's leadership in high-voltage direct current (HVDC) technology, where it is among the few players in the country and holds an estimated 30% market share. The brokerage also noted its strong position in grid-stabilisation solutions, including STATCOMs, where it commands more than 50% market share.
The brokerage expects India to enter a multi-year transmission capex cycle as renewable capacity additions accelerate and power demand continues to rise. It estimates that nearly Rs 7.93 trillion of transmission investments may be required over FY26-FY36, creating significant opportunities across transformers, switchgear, substations and grid-stabilisation solutions
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