Siemens stares at bumpy FY25

Siemens Ltd's shares have plummeted about 12% in the past two trading sessions. Investor sentiment took a beating after management offered a bleak outlook at the FY25 analyst meet on Friday.

- Harsha Jethmalani

In short, the capital goods company, which follows an October-to-September fiscal, is bracing for a challenging FY25. In the energy vertical, the transmission & distribution business is doing well, but Siemens is not bidding for line commutated converter (LCC)-based high-voltage direct current (HVDC) projects as it does not offer LCC technology. It will participate only in voltage source converter (VSC) technology-based HVDC orders as it believes VSC is a superior technology being adopted globally. With most Indian government projects planned as LCC, this will reduce Siemens's total addressable market in the category.

According to a Nuvama Research report, Siemens's energy business delivered an Ebit margin of 13.2% in FY24, adjusted for a ₹70-crore one-off in Q4FY24. Peers such as CG Power and Industrial Solutions Ltd, Transformers & Rectifiers (India) Ltd and GE Vernova T&D India Ltd registered 15-20% Ebitda margins.