Nomura upgrades Siemens to 'Neutral,' raises target to ₹3,325: Here's why

Nomura on Siemens: Japanese brokerage Nomura has upgraded Siemens India stock to ‘Neutral’ from ‘Reduce’ and raised its target price to ₹3,325 (earlier ₹2,780), reflecting a more constructive view on the company’s earnings trajectory and margin prospects. 

 

The revised target implies a forward valuation of 48x December’27F earnings per share (EPS), broadly aligned with Siemens’ long-term average and at an 8 per cent discount to ABB’s target multiple. The brokerage has also lifted its FY26-27 earnings estimates by 3 per cent, underpinned by improving profitability in the Mobility (MO) segment and expectations of steady order conversion across key verticals.  “We raise FY26-27F earnings by 3 per cent to factor improved MO profitability and forecast PAT CAGR of 16 per cent over FY25-28F. We roll forward our valuation to December’27F EPS and upgrade our rating to ‘Neutral’ with a revised SOTP-based TP of ₹3,325 (previously ₹2,780), implying a target P/E of 48x (45x earlier), in line with long term average, at an 8 per cent discount to our target P/E for ABB (Reduce),” said Umesh Raut and Aritra Banerjee of Nomura, in a note dated November 17, 2025.  ALSO READ | PhysicsWallah shares trade at over 30% premium; should you buy, sell or hold?

What's behind Nomura upgrade?

The upgrade by Nomura comes on the back of a strong operational performance in Q4FY25, where Siemens delivered a meaningful beat despite pockets of muted demand. 

 

Revenue for the quarter came in at ₹5,170 crore, rising 16 per cent year-on-year (Y-o-Y) and outperforming Nomura’s and consensus estimates by 14 per cent and 9 per cent, respectively. The momentum was largely driven by robust growth in the MO and Smart Infrastructure (SI) businesses, which expanded 29 per cent and 20 per cent Y-o-Y, even as Digital Industries (DI) reported a softer 1 per cent growth due to slower backlog accretion amid muted private capex.

  Siemens India's order inflows increased 10 per cent Y-o-Y to ₹4,800 crore, marginally below Nomura’s expectations. Siemens’ order backlog stood at a healthy ₹42,250 crore, up 6 per cent Y-o-Y and slightly ahead of estimates, providing solid revenue visibility heading into FY26.

 

The company's profitability also surprised positively, analysts said. Adjusted for one-time demerger costs of ₹20.1 crore, Ebitda rose 17 per cent Y-o-Y to ₹640 crore, coming in 19 per cent above Nomura’s and 7 per cent above consensus. Margins remained resilient at 12.3 per cent, aided by a sharp expansion in MO’s Ebit margin, which improved 294 bps to 11.1 per cent. However, margins in the SI and DI segments softened modestly. Recurring PAT declined 4 per cent Y-o-Y to ₹500 crore, yet still managed a small beat versus Nomura’s forecast.  ALSO READ | Ahluwalia Contracts shares soars as analysts up target; jumps 20% in two sessions 

Going forward, management remains upbeat about sustaining growth at 2x India’s real GDP, anchored by major capex tailwinds in mobility and electrification. Siemens is already bidding for a major ₹21,000-crore Vande Metro tender from MRVC, covering 2,856 coaches. The much-awaited 9,000 HP locomotive order, worth ₹26,000 crore, is expected to move into execution by early CY26, pending prototype approval.

 

According to Nomura, the SI division is set to benefit from structural themes such as grid modernisation, higher electrification intensity, expanding data-center capacity and accelerating EV-charging rollout. Meanwhile, the DI segment, which has seen subdued traction lately, is projected to revive on the back of semiconductor-linked complex electronics projects and a broader pick-up in private industrial capex as consumption strengthens.

 

Exports, especially from the MO division, may emerge as an additional growth lever over the medium term.

 

Thus, Nomura maintained a balanced outlook, flagging risks such as potential margin pressures in MO due to competitive bidding and weaker pricing power in SI. Upside triggers, analysts believe, include large MO order wins and stronger-than-expected data-centre demand.

 

That said, around 1:35 PM, Siemens shares traded in the green even as the broader market remained under pressure. The stock gained up to 1.08 per cent, hitting an intraday high of ₹3,269.80 on the BSE.