Positive Outlook for Siemens Energy
Siemens Energy recently shared its vision for the future of its power transmission business. The company is optimistic about its growth prospects, both in domestic and international markets.
Key Highlights
- 10-15% year-over-year growth expected in the power transmission segment on a sustainable basis.
- Margin improvement anticipated, driven by pricing power and operating leverage benefits.
- Adequate capacity utilization expected for new capacities coming in FY27, thanks to strong enquiry levels.
The company is focusing on VSC-based HVDC projects, which are a key area of growth. Although there may be limited opportunities in these projects in the near term, the overall market potential (TAM) remains strong for non-HVDC projects.
Power Generation Business
The power generation business, which relies on industries like cement, steel, sugar, and ethanol, is expected to grow at a slightly slower pace than the power transmission business.
Investment Outlook
Based on these developments, the company's estimates are being maintained, and the BUY recommendation is retained, with a target price of INR3,800 based on 60x two-year forward earnings.
Disclaimer: Investment decisions should be made after consulting certified experts.