ICICI Securities recommends a HOLD on Siemens Energy India (SEIL), pegging a target price of Rs 3450 for a 12–15 month horizon. The research underscores SEIL’s formidable High Voltage Direct Current (HVDC) positioning, revenue visibility from major order wins, and ongoing capacity enhancement initiatives. Noted risks include macro capex fluctuations and commodity price escalations. Investors are urged to closely monitor operational execution and sectoral tailwinds for optimal portfolio alignment. The stock offers decent returns over medium to long term.

Result Recap & Market Stance

ICICI Securities maintains a HOLD rating on Siemens Energy India, assigning a target of Rs 3450 per share. The current market price stands at Rs 3150, offering a moderate upside over the coming 12–15 months. This recommendation is rooted in the company’s demonstrable financial resilience and strategic order book accretion. The performance horizon, as gauged by ICICI Securities, remains two years, with a clear emphasis on sustainable growth and risk containment.

Robust Order Book & Revenue Momentum

SEIL concluded its fiscal Q4 FY25 with a substantial double-digit YoY uptick in all major financial metrics—Revenue surged 27% to Rs 2646 crore, EBITDA climbed 25% to Rs 479 crore, and PAT rose 31% to Rs 360 crore. The company’s order book leapt 47% YoY, reaching Rs 16,205 crore, propelled by singular large-scale projects in Q3 FY25. The order book-to-bill ratio stands impressive at 2.1x, pointing to underlying business durability. Notably, orders worth Rs 13,113 crore were bagged in FY25 alone.

Segmental Dynamics and Financial Leverage

SEIL’s energy transmission segment accounted for 51% of revenue mix, growing 48% YoY, while generation contributed 49%, up by 11%. Transmission EBIT margins advanced by 210 basis points to 18%, signifying operational finesse, whereas generation EBIT settled at 15.6%, down 310 basis points. The diversified segment structure and margin variability underscore SEIL’s multifaceted approach to market cycles and technology adoption.

Below is a summary of segment and margin trends:

HVDC Leadership – High Entry Barriers

SEIL’s unrivaled position in HVDC and Ultra HVDC technology creates a formidable moat against new entrants. Only three players globally—Siemens Energy, Hitachi, and AlstomGE—command HVDC expertise, encapsulating the sector’s high barriers to entry and enhanced profit potential. With India’s National Electricity Plan demanding Rs 9.2 trillion investment for grid strengthening and 91% substation capacity addition channeled towards high-voltage equipment, SEIL stands uniquely positioned to leverage sectoral imperatives.

Operational Capacity Expansion and Funding Discipline

Responding to surging domestic demand for transmission hardware, SEIL is investing Rs 1100 crore—entirely out of internal accruals—into expanding transformer and switchgear capacity across Kalwa, Goa, and Aurangabad. This disciplined capital deployment is expected to maximize value extraction from transmission opportunities without diluting shareholder interests. Manufacturing capacity upgrades are directly correlated with the order book influx and underpin medium-term revenue growth projections.

Key Financial Levels – Valuation Matrix

ICICI Securities forecasts 22% CAGR for revenue and 26% CAGR for PAT over FY25–27E, substantiating the optimism around SEIL’s forward earnings trajectory. EBITDA margins are anticipated to sustain within the 19–21% band, reflecting SEIL’s ability to absorb cost inflations and secure lucrative projects. The forecast framework is grounded on 70x FY27E EPS valuation, signposting a fair market approach.

Shareholding Profile & Risk Perspective

Promoters retain a 75% equity stake, underlining long-term commitment, while FII holdings have marginally increased to 6.2%. Risks to the investment thesis arise from potential slowdowns in both domestic and global capex cycles and heightened commodity price volatility. Investors should approach with caution and incorporate risk assessments as central to their decision-making framework.