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Long-term growth story remains intact

We recently interacted with the management of Siemens Energy India (ENRIN). The management believes ENRIN is well positioned to benefit from the structural power transmission and generation upcycle, supported by strong domestic demand and rising global opportunities. The transmission business offers a broad product suite across transformers, switchgear, substations and grid-stabilization solutions, with rising renewable integration and grid complexity driving demand for higher value solutions such as HVDC and STATCOM. Export opportunities are also gaining traction, with ENRIN increasingly serving as a global manufacturing base for Siemens Energy, particularly in transformers, while the US remains a key opportunity market. On the generation side, gas services and engineering, research and development (ER&D) offer attractive growth potential, supported by a growing installed base, while steam turbines are benefiting from industrial decarbonization, waste-heat recovery and thermal power opportunities. ENRIN’s diversified exposure across products, solutions and services, coupled with higher margin export and service opportunities, should support healthy growth and margin resilience. With capacity expansion underway in transformers and switchgear, and strong order visibility across transmission and generation, SEIL is well placed to capture the multi-year electrification and energytransition opportunity, although execution and timing of large orders remain key monitorable. The stock is currently trading at 55.8x/45.3x on SY27E/SY28E. We roll forward to Sep’28E and upgrade our rating from ‘Accumulate’ to ‘BUY’ given healthy multi-year growth visibility, supported by strong transmission demand, rising export opportunities and increasing contribution from higher margin services, with revised TP of INR3,655 (INR3,434 earlier), valuing the stock at PE of 53x Sep’28E (55x Mar’28E earlier).

We believe ENRIN is well placed to capitalize on the robust multi-year energy transition and energy efficiency opportunity given

1) it being 1 of the 3 players in India to have HVDC capabilities,

2) its market leading position in product sale and upgradation of industrial steam turbines (up to 250MW),

3) the robust opportunities in energy and utility-scale gas services in India,

4) its comprehensive portfolio catering to the decarbonization space, and

5) ongoing capacity and capability expansion of key transmission equipment manufacturing, including doubling of capacity for power transformers.

Key highlights

Capacity expansion largely underway; utilization to drive growth

* ENRIN has meaningful capacity across transformers, switchgear and turbine-related manufacturing, with the company currently expanding transformer capacity at a new location. The management indicated that incremental ~30,000MVA transformer capacity (capex; INR20.6bn; to be operationalized by 2030-32) is being added, and switchgear capacity is also undergoing sizable expansion.

* Existing capacity provides sufficient headroom for growth, and no major additional manufacturing expansion is currently planned beyond the ongoing projects. The management expects capacity additions and improving utilization to support growth over the medium term

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