Siemens Energy Shares Seen Listing In This Price Range

Jefferies expects Siemens Energy Ltd. shares to list in the range of Rs 2,995 to Rs 3,711 per share. On listing, the company should be India's largest listed pure-play power transmission and distribution equipment player, with over $10 billion market cap, followed by Hitachi and GE at $6.8-9.6 billion, the brokerage added.

The firm demerged from Siemens April 7. Following this, shares of the parent firm opened at Rs 2,450 per share.

Siemens Energy 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 per share, Jefferies said.

The stock can trade at 60 times PE Mar-27E, which is a 9% premium to the price target multiple on Siemens ex-Energy, implying a price target of Rs 3,350 per share, it added.

Jefferies has a 'buy' rating on the stock with a price target of Rs 3,700 per share.

"Our price target values Siemens India e-Energy at 55 times PE Marc27E, which is in line with our price target multiple for ABB and pre-demerger multiple for Siemens. This reflects the improved outlook on railways and potential order flow and margin surprise from there."

Some downside risks include fixed cost rising faster than revenue growth and capex cycle trend weakening.