Jefferies Forecasts Double EPS Growth for Siemens Energy India Post-Demerger
Jefferies forecasts strong growth for Siemens Energy India Ltd following its demerger from Siemens Ltd. The company is expected to see EPS growth at twice the pace of Siemens Ltd, driven by India's power sector expansion plans. Power sector capex is projected to grow 2.5 times by FY2030, with over $300 billion investment expected between FY2024-2030. Siemens is investing Rs 460 crore to double its power transformer manufacturing capacity. Jefferies values the Siemens Energy business at Rs 2,116.00 and sets a price target of Rs 3,300.00 for Siemens Ltd.

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Jefferies, a prominent financial services company, has released a bullish forecast for Siemens Energy India Ltd, the soon-to-be-listed entity following its demerger from Siemens Ltd. The report highlights significant growth potential for the new company, driven by India's ambitious power sector expansion plans.
Accelerated EPS Growth Projected
According to Jefferies' analysis, Siemens Energy India Ltd. is expected to witness earnings per share (EPS) growth at twice the pace of the remaining Siemens Ltd. business. This optimistic outlook is underpinned by India's projected increase in power sector capital expenditure.
Power Sector Capex Boost
The report points to a substantial increase in India's power sector investments:
- Current to FY2030: Power capex expected to grow 2.5 times
- Projected investment: Over $300 billion between FY2024-2030
This significant boost in infrastructure spending is seen as a key driver for Siemens Energy India's growth prospects.
Siemens' Strategic Expansion
In line with the positive sector outlook, Siemens is making strategic investments to capitalize on the anticipated growth:
- Investment amount: Rs 460 crore
- Purpose: To double power transformer manufacturing capacity
This move indicates Siemens' commitment to strengthening its position in the burgeoning Indian power sector.
Valuation Adjustments
Jefferies has also provided updated valuations in light of the demerger:
Item | Value |
---|---|
Siemens Energy business valuation | Rs 2,116.00 |
Siemens Ltd. price target | Rs 3,300.00 |
Note: The Siemens Energy business valuation is a downward revision from earlier estimates.
Market Implications
The demerger and subsequent listing of Siemens Energy India Ltd. are expected to create two focused entities:
- Siemens Energy India Ltd.: Positioned to leverage the growing power sector opportunities
- Siemens Ltd.: Continuing its operations in other sectors
Investors and market watchers will be keenly observing how both entities perform post-demerger, especially given the optimistic growth projections for the energy business.
Conclusion
As India's power sector gears up for substantial expansion, Siemens Energy India Ltd. appears well-positioned to benefit from the increased capital expenditure. However, as with all investments, stakeholders are advised to conduct thorough research and consider various factors before making investment decisions.
Historical Stock Returns for Siemens
1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
---|---|---|---|---|---|
-0.05% | +3.01% | +14.50% | -26.76% | +1.31% | +371.96% |