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Shares of Siemens India traded higher on Tuesday after Japanese brokerage Nomura upgraded the stock to ‘Neutral’ from ‘Reduce’ and raised its target price to Rs 3,325 (earlier Rs 2,780). The revision reflects Nomura’s more constructive view on the company’s earnings strength, improving profitability and margin visibility across key segments.

The new target price implies a valuation of 48x December 2027F EPS, broadly in line with Siemens India’s long-term average and at an 8 per cent discount to the target multiple assigned to ABB. The brokerage also raised its FY26–27 earnings estimates by 3 per cent, driven by improving performance in the Mobility (MO) business and expectations of healthy order conversion.

In its report dated November 17, Nomura analysts Umesh Raut and Aritra Banerjee noted: “We raise FY26–27F earnings by 3 per cent to factor improved MO profitability and forecast a PAT CAGR of 16 per cent over FY25–28F. We roll forward our valuation to December 2027F EPS and upgrade our rating to ‘Neutral’ with a revised SOTP-based TP of Rs 3,325.”

Nomura’s upgrade follows a strong Q4FY25 performance, where Siemens delivered a notable beat despite uneven demand trends.

Revenue rose 16 per cent year-on-year to Rs 5,170 crore, exceeding Nomura’s estimate by 14 per cent and the Street’s expectations by 9 per cent.

Growth was powered by a 29 per cent jump in Mobility and a 20 per cent rise in Smart Infrastructure.

Digital Industries grew just 1 per cent, impacted by muted private capex.

Order inflows increased 10 per cent Y-o-Y to Rs 4,800 crore, slightly below projections. The order backlog remained strong at Rs 42,250 crore, up 6 per cent Y-o-Y, offering healthy revenue visibility for FY26.

On profitability, Siemens delivered a margin surprise. Adjusted Ebitda rose 17 per cent Y-o-Y to Rs 640 crore, coming in 19 per cent above Nomura’s estimate. Margins were steady at 12.3 per cent, supported by a sharp improvement in MO’s Ebit margin, which expanded 294 bps to 11.1 per cent. SI and DI margins softened somewhat. Recurring PAT declined 4 per cent Y-o-Y to Rs 500 crore, but still exceeded the brokerage’s forecast slightly.

Management expects growth to remain at twice India’s real GDP, supported by major capex cycles in transportation and electrification.

A Rs 21,000-crore Vande Metro tender (2,856 coaches).

The Rs 26,000-crore 9,000 HP locomotive project, expected to enter execution by early CY26.

Continued demand from data centres, EV-charging infrastructure, and grid modernisation within the SI division.

A projected revival in DI, aided by semiconductor-related engineering projects and improving private capex.

Nomura noted that exports from the MO division may also become a meaningful medium-term driver.

However, the brokerage flagged risks such as margin pressures in MO due to competitive bidding and weaker pricing power in SI. Upside triggers include large order wins and a stronger-than-expected uptick in data-centre-led demand.

Around 16:49 PM, Siemens India shares were up 1.08 per cent, touching an intraday high of Rs 3,269.80 on the BSE, outperforming a weak broader market.

Senior Sub-editor at Zee Business English

shweta.shukla@India.com

Shweta Birendra Shukla is a journalist covering the stock market and corporate aff