Siemens India share price down 3% after brokerages cut TP; Details here

Siemens India shares lost 3.2 per cent in Monday's trade, logging an intraday low at Rs 6,642.95 per share on BSE. The selling pressure in the stock came after brokerages highlighted that selective approach for High Voltage Direct Current (HVDC) projects and weak inflow for ex-Energy segments may weigh on the near term performance of the company.

 

Around 10:39 AM, Siemens India share price was down 2.43 per cent at Rs 6,700 per share on BSE. In comparison, the BSE Sensex was up 0.80 per cent at 78,668.32. The market capitalisation of the company stood at Rs 2,38,600.57 crore. The 52-week high of the company stood at Rs 8,129.95 per share and the 52-week low stood at Rs 3,933 per share.

 

In its analysts meeting, the heavy electrical equipment company highlighted growth opportunities from new-age technologies such as semiconductors, batteries, photo voltaic, and electric vehicles amid lower capex by the government and private sectors in 1HFY25. 

 

The company maintained its selective outlook toward HVDC projects and revealed plans to participate in projects based on Voltage Source Converter (VSC) technology while most upcoming HVDC projects are likely to be on Line Commutated Converter (LCC) technology. 

 

It continued to have a positive outlook on the energy segment mainly in the transmission and distribution (T&D) and smart infrastructure segment particularly owing to a continued thrust on renewables. 

 

Though digital industries and mobility segments are impacted by a weak enquiry pipeline from the private sector and delays in railway tenders, Siemens expects the current weakness to be cyclical in nature. 

 

The demerger of its energy division is on track and after that, the focus will shift to growth for non-energy divisions.

Here's what brokerages make of Siemens India's analysts meet: 

Motilal Oswal | Buy | Targe price cut to Rs 8,000 from Rs 8,500 per share

The brokerage believes that a selective approach for HVDC projects and weak inflow for ex-Energy segments may weigh on the near term performance of the company. This would start recovering when private and government capex revives. Motilal Oswal also has slightly lower margin estimates to bake in FY24 performance and expect the company to clock a compound annual growth rate (CAGR) of 19 per cent/22 per cent/20 per cent in revenue/EBITDA/PAT over FY24-27E.

 

Ebitda refers to Earnings before interest, tax, depreciation and amortisation (Ebitda) and PAT refers to profit after tax.

 

Kotak Institutional Equities | Sell | Target price cut to Rs 5,000 from Rs 4,500 per share

Analysts at Kotak have noted difficulties in predicting FY2025 due to sharp volatility in FY2024 across segments and quarters on margin and book-to-bill (often correlated), a lack of near-term support of

large orders and a lack of broad-based uptick in private sector ordering.

 

The endgame of stake transfer in the demerged energy entity is another variable that will play out in FY2025 and beyond. 

 

Nuvama Institutional Equities | Hold | Target price cut to Rs 7,000 from Rs 8,350 per share

Nuvama believes Siemens is sought to tamper expectations on in Q4 on the backdrop of chunky HVDC orders, which may see delays, as India prefers LCC tech against the company's plans to be only in VSC tech globally, slowdown in railways orders for locos/trainsets and the possibility of a higher share going to Indian Railways factories.,

 

That apart, as per brokerage, limited near-term triggers in HVDC/railways calls for caution. Hence, Nuvama slashed the company's FY25E/26E/27E earnings per share (EPS) by 9 per cent/15 per cent/11 per cent factoring in slower HVDC inflows. 

 

Antique | Buy | Target price: Rs 8,856 per share 

The brokerage continues to remain upbeat on Siemens’ business prospects and retained its positive view based on a PE of 70x its 1HFY27E earnings.

 

In the past one year, Siemens shares have gained 71.4 per cent against Sensex's rise of 9.3 per cent.