Introduction to Siemens Energy India

We recently attended a meeting with the management of Siemens Energy India (ENRIN), where they shared the company's performance and future plans. The company is expected to see continued growth in the Power Transmission segment, thanks to favorable market trends.

Power Transmission Segment

The Power Transmission segment is likely to see growth driven by STATCOMs, with around 8-10 projects per year over the next few years. With a market share of about 50%, ENRIN is well-positioned to benefit from this growth. However, the Variable-Speed Converter High-Voltage Direct Current (VSC HVDC) projects in India are limited, with only about one project happening every other year.

Power Generation Segment

In the Power Generation segment, steady demand from industries like cement, steel, and paper & pulp is expected to drive growth. Large service contracts will also provide additional momentum for the company.

Stock Performance and Rating

The stock is currently trading at a Price-to-Earnings (PE) ratio of 75.6x/58.5x for the years 2026 and 2027. We maintain our 'Accumulate' rating, valuing the stock at a PE of 65x for September 2027, with a target price of Rs3,312.

Note: The views expressed are those of investment experts and not of the website or its management. It's always recommended to consult certified experts before making any investment decisions.

Key Points to Consider

Growth drivers: STATCOMs, Power Transmission segment, and steady demand from end-markets like cement, steel, and paper & pulp.
Challenges: Limited visibility of VSC HVDC projects in India, with only about one project per year.
Stock performance: Currently trading at a PE ratio of 75.6x/58.5x, with a target price of Rs3,312.

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