Siemens Energy India Target ₹3,600: Q3 PAT Surges 80%

Siemens Energy India continues to earn a BUY rating with a target price of ₹3,600. That's an 11% upside from the current price of ₹3,237.

ENRIN delivered a standout Q3FY25 with PAT surging 80% YoY to ₹2.6 billion. Revenue grew 20% YoY while EBITDA margin expanded 470 basis points to 19.1%. Order inflows nearly doubled at ₹32.9 billion.

The company has announced over ₹11 billion in capex to double transformer capacity and expand high-voltage switchgear manufacturing. This positions it well to capture India's power transmission infrastructure buildout.

Here's a quick snapshot of Siemens Energy India:

Why ENRIN Remains a BUY

Three factors continue to drive conviction in this capital goods player:

Power Transmission Segment Firing on All Cylinders

The power transmission business delivered 35% YoY revenue growth in Q3 with EBIT margin expanding 860 basis points to 18.7%. This segment now contributes 55% of total revenue and is expected to clock 41% CAGR over FY25-27. Strong order backlog and India's grid infrastructure push are the key drivers.

Aggressive Capacity Expansion

ENRIN has committed over ₹11 billion in capex across multiple facilities:

This expansion will enable the company to meet growing demand for power transmission equipment both in India and globally.

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Healthy Order Book Providing Visibility

Order book stands at ₹131 billion for FY25E and is expected to reach ₹178 billion by FY27E. The 9-month order inflow of ₹107.7 billion already exceeds the full-year FY24 order book of ₹101 billion.

Q3FY25 Results: The Wins and Misses

The Wins:

• Revenue: ₹17.8 billion (up 20% YoY)
• EBITDA: ₹3.9 billion (up 14% YoY, up 29% QoQ)
• EBITDA Margin: 19.1% (expanded 470bp YoY)
• PAT: ₹2.6 billion (up 80% YoY)
• PAT Margin: 14.7% (expanded 490bp YoY)
• Order Inflows: ₹32.9 billion (up 94% YoY)
• Power Transmission revenue: ₹9.8 billion (up 35% YoY)
• Power Transmission EBIT margin: 18.7% (up 860bp YoY)

What to Note:

• One-time provision of ₹546 million for stamp duty on property transfers from parent Siemens Ltd. impacted 9M margins
• Adjusted for this, margins were in line with normalized levels
• Power Generation segment grew only 6% YoY with flat margins
• Company has receivables from Siemens Ltd. that will aid other income once received

The provision is a one-time item related to the demerger from Siemens Ltd. Once the receivables come through, it should provide a boost to other income.

Segment Performance: Where the Growth Is Coming From

1. Power Transmission (55% of FY25E revenue)

This is the growth engine. Revenue expected to grow from ₹40 billion in FY25E to ₹79.5 billion by FY27E, a 41% CAGR. EBIT margins are projected to expand from 20.5% to 22.5% over the same period.

Key products: Power Transformers, Gas Insulated Switchgear (GIS), Air Insulated Switchgear (AIS), HVDC systems, FACTS, Instrument Transformers.

2. Power Generation (45% of FY25E revenue)

Steady but slower growth segment. Revenue expected to grow from ₹30 billion in FY25E to ₹40 billion by FY27E, a 15% CAGR. EBIT margins expected to improve from 17% to 18%.

Key products: Industrial Steam Turbines, Industrial Generators, Digital Control Solutions, Turbine Service Programs.

Manufacturing Footprint

ENRIN operates 8 manufacturing facilities and 2 service centers across India:

The Aurangabad expansion for high-voltage switchgear and Kalwa expansion for transformers will significantly increase production capacity over the next 2-3 years.

Competitive Positioning

ENRIN competes with BHEL, GE Vernova T&D India, Hitachi Energy India, and Crompton Greaves Power & Industrial Solutions.

What sets ENRIN apart:

• Only player alongside BHEL offering Industrial Steam Turbines
• Full suite of power transmission products including HVDC and FACTS
• Strong parent backing from Siemens Energy AG (75% promoter holding)
• Focus on both domestic and export markets

Financial Outlook: FY25-27

Strong growth trajectory with expanding margins. Revenue projected to grow at 30% CAGR, reaching ₹119 billion by FY27E.

Growth Trajectory:

Estimate Revisions

Motilal Oswal has raised estimates following strong 9M performance:

The upgrades are driven by better-than-expected execution and margin improvement in the power transmission segment.

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Return Ratios

Healthy profitability metrics:

• ROE: 25.9% (FY25E) → 26.8% (FY27E)
• ROCE: 27.6% (FY25E) → 27.7% (FY27E)
• Net Debt/Equity: Negative (net cash position)

Why ₹3,600 Target Price Makes Sense

ENRIN is valued at 60x September 2027E EPS, arriving at ₹3,600.

Current Valuations:

The valuations look expensive on trailing metrics. However, with 37% PAT CAGR expected over FY25-27 and strong visibility from the order book, the premium is justified for a pure-play power transmission and generation company riding India's infrastructure wave.

At 54.7x FY27E earnings with improving ROE and a net cash balance sheet, the stock offers reasonable risk-reward.

Key Risks to Watch

• Ordering slowdown: Any moderation in power sector capex could impact order inflows
• Supply chain disruptions: Component availability issues could delay execution and pressure margins
• Execution risk: Large capex projects carry inherent execution risks
• Parent company transactions: One-time adjustments related to Siemens Ltd. demerger may continue

Should You Buy Siemens Energy India Stock?

Here's the complete breakdown:

Reasons to Consider Buying:

• Pure play on India's power transmission infrastructure buildout
• PAT surged 80% YoY in Q3 with strong margin expansion
• Order inflows nearly doubled YoY at ₹32.9 billion
• ₹11b+ capex to double transformer capacity
• Power transmission segment growing at 41% CAGR
• EBITDA margins expanding from 16% to 22%
• Net cash balance sheet
• Strong promoter backing (75% held by Siemens Energy AG)
• Both domestic and export market exposure

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Risks You Should Know:

• Trading at 80x FY26E earnings — expensive on near-term metrics
• Power generation segment growing slower at 15% CAGR
• One-time provisions related to parent company transactions
• Execution risk on large capex projects
• Supply chain dependencies

Who Should Buy:

• Investors with 12-18 month horizon
• Those seeking exposure to India's power infrastructure theme
• Investors comfortable with premium valuations for high-growth companies
• Position size: 2-3% of equity portfolio given valuations

Who Should Avoid:

• Value-focused investors uncomfortable with 80x+ P/E
• Short-term traders expecting quick gains
• Those seeking dividend income (no dividend currently)

The Bottom Line for Siemens Energy India

Siemens Energy India offers a direct play on India's power transmission infrastructure buildout. The 80% PAT growth in Q3 and near-doubling of order inflows signal strong momentum.

The ₹11 billion capex to double transformer capacity and expand GIS manufacturing provides multi-year growth visibility. With power transmission segment delivering 41% CAGR and margins expanding from 16% to 22%, the earnings trajectory looks solid.

The stock is expensive at 80x FY26E earnings. But for investors comfortable with premium valuations for high-growth infrastructure plays, ENRIN offers exposure to a structural theme with strong execution track record.

Near-term, watch for any moderation in order inflows and execution on the capex projects.

Frequently Asked Questions

1. What is Siemens Energy India's target price?

The target price is ₹3,600, representing 11% upside from ₹3,237. The target is based on 60x September 2027E EPS, factoring in strong growth visibility from the order book and capacity expansion.

2. Is Siemens Energy India a good stock to buy?

ENRIN maintains a BUY rating. The stock suits investors with 12-18 month horizons who want exposure to India's power infrastructure buildout. Key positives: 80% PAT growth, doubling transformer capacity, 41% CAGR in power transmission. Key risks: expensive valuations at 80x FY26E P/E.

3. What were Siemens Energy India's Q3 results?

Q3FY25: Revenue ₹17.8 billion (up 20% YoY), EBITDA margin 19.1% (up 470bp YoY), PAT ₹2.6 billion (up 80% YoY). Order inflows at ₹32.9 billion jumped 94% YoY.

4. What is Siemens Energy India's capex plan?

The company has announced ₹11+ billion in capex: ₹4.6b for transformers in Kalwa (doubling capacity), ₹3.3b for GIS in Goa, ₹0.6b for vacuum interrupters, and ₹2.8b for switchgear in Aurangabad.

5. What is Siemens Energy India's growth outlook?

Revenue expected to grow at 30% CAGR over FY25-27, reaching ₹119 billion. PAT expected to grow at 37% CAGR. Power transmission segment driving growth at 41% CAGR.

6. Which segment is growing faster for Siemens Energy India?

Power Transmission (55% of revenue) is the growth driver at 41% CAGR with margins expanding to 22.5%. Power Generation (45% of revenue) is steadier at 15% CAGR with 18% margins.

7. What is Siemens Energy India's promoter holding?

Promoter holding stands at 75%, held by Siemens Energy AG. DIIs hold 9.1%, FIIs hold 4.8%.

8. Why is Siemens Energy India trading at such high valuations?

The premium reflects: 

1. pure-play exposure to power infrastructure theme, 
2. 37% PAT CAGR visibility, 
3. strong order book of ₹130b+, 
4. capacity doubling through ₹11b capex, and 
5. global parent backing. 

At 54.7x FY27E, valuations moderate as earnings catch up.

Disclaimer: The companies mentioned in the article are for information purposes only. This is not investment advice.