Strong Performance in 2023
Siemens Energy India (SEI) has had a great year, thanks to its transmission segment. The company's profit margin has increased by 660 basis points over the past two years to 19.3%. This is due to a better mix of products, improved pricing, and a rise in export sales.
Key Drivers of Growth
We expect the company's margin to remain strong at around 20%. The transmission segment has seen the biggest increase in profitability, with a 700 basis point rise in margin. The generation segment is also doing well, thanks to steady demand from key industries.
Order Backlog and Future Prospects
SEI's order backlog has grown significantly, from INR 77 billion in FY23 to INR 162 billion in FY25. We expect the company to see strong bidding activity in the transmission segment, with orders worth INR 0.8-1 trillion per year over the next three years.
Our investment tip is to maintain a HOLD position on SEI, with a target price of INR 3,125. We value the company at 65 times its estimated earnings for FY27.
- Transmission segment: driving growth with a 700 basis point increase in margin
- Generation segment: steady demand from core industrial segments
- Order backlog: significant growth, with a strong pipeline of future orders
Please note that this is not a verified investment advice. It's always a good idea to consult with certified experts before making any investment decisions.