Motilal Oswal Financial Services has reiterated a BUY rating on Siemens Energy India, calling for investors to accumulate the stock with a 12-month target price of Rs 3,800 versus a current market price of Rs 2,996, implying upside of about 27 percent. The brokerage’s thesis rests on a powerful combination of grid-investment tailwinds, technology leadership in high-voltage solutions, a robust export and services mix, and the operating leverage that kicks in as new capacities ramp up by FY27. While valuations are rich, the house argues that superior growth visibility, strong return ratios and a clean balance sheet justify a premium multiple of 60 times two‑year forward earnings. Risks linger in the form of potential order slowdowns and supply chain disruptions, but the earnings trajectory—revenue CAGR of 27 percent and profit CAGR of 34 percent over FY25–28E—keeps the risk–reward skewed in favor of long-term investors.​

Concise Investment View

Clear BUY with compelling upside. Motilal Oswal pegs the fair value of Siemens Energy India at Rs 3,800 per share, projecting a 27 percent upside from the prevailing level of Rs 2,996 as of the report date. The call is anchored in sustained double-digit growth in power transmission, stable expansion in power generation, and rising contribution from services and exports, which together support both earnings momentum and margins above 20 percent.

Rich, but justified valuation zone. The stock trades at 72.7 times FY26E earnings, 49 times FY27E and 40.1 times FY28E, levels that would typically demand flawless execution. However, with return on equity expected around 25–27 percent and return on capital employed near 26–28 percent in FY26–27E, the brokerage argues that Siemens Energy merits a structural premium within the capital goods basket.​

Key price levels and trading roadmap

Recommended accumulation and investment bands. With a BUY rating and medium-term upside visibility, investors with a 12–18 month horizon can consider accumulating the stock in the Rs 2,800–3,050 band, aligning with the current market price region highlighted in the report. For more conservative participants looking for a margin of safety, staggered buying on dips closer to Rs 2,700–2,800 may be prudent, subject to overall market conditions.

Target and stop-loss framework for investors. The fundamental target is set at Rs 3,800, based on 60 times two‑year forward earnings and supported by strong earnings CAGR through FY28E. Investors may treat Rs 3,250–3,300 as an intermediate resistance area and partial profit-taking zone, while a medium-term protective stop-loss can be considered in the Rs 2,500–2,550 region, where risk–reward begins to deteriorate if execution falters or the order cycle cools.​

Valuation snapshot and upside matrix.

Growth engines: transmission and generation

Power transmission: the primary growth locomotive. Siemens Energy’s power transmission segment is positioned at the heart of India’s grid expansion and stabilization drive, riding demand for transformers, AIS/GIS switchgear, FACTS/STATCOMs and HVDC VSC solutions. Management sees sustainable 10–15 percent annual growth in this vertical, with revenue in the broader franchise expected to clock a 39 percent CAGR over FY25–28 as new transformer and switchgear capacities come onstream by late FY26 or early FY27.

Power generation: stable, services-heavy franchise. The power generation business delivered double-digit revenue growth with steady margins in FY25, underpinned by a deep installed base and a high-quality services portfolio. With Siemens technology embedded in roughly 55 percent of India’s large steam turbines and 25 percent of gas turbines, the company is well placed to capture recurring opportunities in modernization, flexibility upgrades and maintenance, translating into high single-digit revenue growth and resilient profitability in this segment.​

Strategic positioning and technology edge

High-voltage leadership and marquee references. Siemens Energy’s track record in HVDC and advanced grid-stabilization solutions provides a competitive moat, with about 30 percent of India’s HVDC capacity built on its technology. Wins in large STATCOM installations and India’s first SF6‑free 145 kV circuit breaker reinforce its reputation in sustainable, future-ready transmission gear, a critical differentiator as utilities push for greener and more reliable infrastructure.

New energy, data centers and nuclear: emerging vectors. Beyond the core grid and generation play, the company’s Industries and New Energy portfolio focuses on electrification and automation of process industries, maritime electrification and platforms such as PEM electrolysers and power‑to‑X under the Green Hydrogen Mission. Management is also eyeing large steam turbines for nuclear projects and gas turbines for the fast-expanding data center ecosystem, providing optionality on top-line and margin expansion over the medium term.​

Financial trajectory and margin dynamics

Strong earnings compounding through FY28E. Motilal Oswal expects Siemens Energy India’s revenue, EBITDA and PAT to grow at a CAGR of 27 percent, 32 percent and 34 percent, respectively, over FY25–28E. Net sales are projected to rise from Rs 78.3 billion in FY25 to about Rs 159.8 billion by FY28, with adjusted profit advancing from Rs 11.0 billion to Rs 26.6 billion over the same period.

Margin expansion on operating leverage. EBITDA margin is estimated to improve from 19.3 percent in FY25 to 20.7 percent in FY26E and further to 21.8 percent by FY28E, driven by stable gross margins, higher capacity utilization and an increasing contribution from services. At the EBIT level, margins are expected to move into the 20–21 percent band, supporting robust return ratios despite heavy investments in capacity expansion and technology.​

Balance sheet strength and capital efficiency

Asset-light growth with robust cash generation. The company carries no financial debt on its balance sheet, relying instead on internal accruals to fund expansion, which keeps net debt-to-equity at or below zero across the forecast period. Strong operating cash flows, coupled with disciplined capex, are expected to yield healthy free cash generation, reinforcing the investment case for long-term shareholders.
High returns sustain premium multiples. With book value per share projected to rise from Rs 123.1 in FY25 to Rs 300.0 by FY28E, Siemens Energy compounds intrinsic value meaningfully over the forecast window. Returns on equity in the mid-20s and returns on capital employed trending toward the high-20s underscore efficient capital deployment, justifying the elevated P/E and P/BV multiples in an otherwise crowded capital goods space.

Risks, monitoring triggers and investor stance

Macro, execution and cycle risks. Key downside risks to the thesis include a slowdown in ordering activity—particularly in large HVDC and grid-stabilization projects—and supply chain bottlenecks that could compress margins or delay revenue recognition. Additionally, a sharp derating of high-quality capital goods names or adverse regulatory changes in power and green energy policies could weigh on the stock despite strong fundamentals.
What investors should track now. Near-term, investors should watch the outcome of the South Olepad HVDC project, the pace of domestic HVDC opportunity conversion and commissioning timelines for new transmission capacities. Over the medium term, trends in export orders, services’ revenue share (currently about 26 percent of segmental revenue) and traction in nuclear, data center and green hydrogen-linked projects will be crucial sentiment and valuation drivers.