Siemens Energy India listing on June 19; Jefferies shares likely listing price, target

The demerged business of Siemens Ltd, Siemens Energy India Ltd, is all set to make stock market debut on Thursday, June 19. Upon listing, Siemens Energy India could be India’s largest listed pure-play power T&D equipment player with $10 billion-plus market capitalisation (m-cap), followed by Hitachi Energy and GE Vernova T&D at $6.8-9.6 billion. 

Siemens was demerged on April 7 and Siemens ex-energy price opened at Rs 2,450 per share, suggesting an implied Rs 2,478 per share value for the Siemens Energy entity, Jefferies said. It sees Siemens Energy logging 40 per cent EPS CAGR over FY24-27E, driven by the robust T&D pipeline and operating leverage implying healthy upside potential below Rs 3,000 per share.
 
Siemens Energy should be a key beneficiary of the $100 billion-plus transmission capex pipeline, Jefferies said adding that the prevailing margins reflect under 60 per cent utilisation at its T&D facilities, which offers operating leverage linked upside. 

Hitachi Energy, and GE Vernova T&D are comparable to Siemens Energy and are trading at 66 times and 54 times PE Mar-27E. At these multiples, Siemens Energy can list between Rs 2,995 per share and Rs 3,711 per share, Jefferies said.

"We believe SE can trade at 60 times PE Mar-27E, which is a 9 per cent premium to our PT multiple on Siemens ex-Energy, implying a price target of Rs 3,350 per share," it said. 

For Siemens (ex-energy), Jefferies suggested a target price of Rs 3,700, valuing the business at 55 times PE Mar-27E, which is in-line with its 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. Downside risks: 1) Fixed cost rise faster than
revenue growth; and 2) Capex cycle trends further weakening," it said.

Jefferies expects the overall infra and industrial capex should moderate to 11 per cent CAGR in FY24-27E against 22 per cent in FY21-24, but Power will remain a key driver at 21 per cent CAGR. 

Transmission bids of Rs 1.5 lakh crore were awarded in FY25 against Rs 39,500 crore in FY24. 

"Reflecting management’s confidence in growth, SE is incurring Rs 460 crore capex to double power transformer capacity. SE recorded Rs 5,100 crore order flow in the first 5 months of FY25 vs Rs 8,800 crore in FY24 and has an order book of Rs 15,100 crore as on March 1st 2025 (2.4x FY24 revenue)," it said.