Siemens India's Shares Skyrocket 4% Following NCLT's Approval of Energy Division Spin-off
Siemens India Stock Surges on NCLT-Approved Energy Business Demerger
Shares of Siemens India saw a significant boost on March 26, 2025, climbing 3.8-4% intraday to reach ₹5,317.15 on the BSE. This growth followed the National Company Law Tribunal's (NCLT) approval of the energy business demerger, which will see the segment transfer into Siemens Energy India.
Effective March 25, the demerger will unfold via a 1:1 equity allotment ratio, with the record date set for April 7, 2025. Guilherme Vieria De Mendonca, former head of Siemens' energy division, will helm the demerged entity as managing director and CEO, while Harish Shekar takes on the CFO role.
The intention behind the demerger is to unlock value by separating the energy business, which will then list independently on stock exchanges.
This surge reversed a two-day decline, marking a 3.76% rebound on March 26. However, the shares still linger 25% below their six-month peak of ₹8,129.95 (October 2024). Analysts forecast a 21% upside, with an average target price of ₹6,421, maintaining a consensus "Buy" rating.
While Siemens reported a 21.5% year-on-year net profit increase to ₹614.6 crore in Q3 FY25, revenue dipped 3.3% to ₹3,587.2 crore, and EBITDA dropped 11.5%. The stock currently trades above short-term moving averages (5-day, 10-day) but below longer-term averages, signaling mixed momentum. The demerger approval has injected optimism, though broader market cautiousness persists due to recent underperformance.
In other news, NCC shares surged over 6% as the PSU secured major orders from BSNL worth over ₹10,800 crore, and debit cards overtook cash as Switzerland's top payment method.
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Despite brief moments of resilience, Siemens Ltd.'s stock performance has suffered in recent months, with a year-to-date drop of 25.33% as of early May 2025. The stock reached a 52-week low of Rs 2,490 on April 7, 2025, though there was a 2.38% surge on May 14, 2025, due to high trading volume. Over the past three months, the stock price has declined by -30.8%.
Sunil Mathur serves as the managing director and CEO of Siemens Ltd., and the company has seen a 44% year-on-year increase in new orders, driven by mobility and smart infrastructure businesses. However, the company's digital industries business continues to face challenges due to muted private capex spending.
In the second quarter ending March 31, 2025, Siemens reported a 27.4% decline in net profit to ₹582.5 crore, with EBITDA falling by 26.6% to ₹467.5 crore. Revenue remained flat compared to the previous year. The company's order backlog grew by 7%, reflecting potential for future growth. Promoters own a 75% stake, while mutual funds have increased their holdings from 3.47% to 3.93% as of March 2025. Retail investors have also marginally increased their stake.
The future outlook for Siemens India remains uncertain, with short-term challenges and a strategic shift announced through the energy business demerger. The focus on digital and infrastructure businesses suggests a significant transformation, but the specifics of the Indian operations in the energy sector are unclear. Despite these challenges, Siemens' strong growth in new orders, infrastructure focus, and favorable long-term growth prospects could support future growth, particularly if public capex spending continues to rise.
- The energy business demerger, which will see Siemens Energy India become an independent entity, aims to unlock value by tapping into the African market, as Siemens India expands its business in energy trade.
- In the sphere of logistics and finance, the demerged entity, with Guilherme Vieria De Mendonca at the helm, will import and export resources effectively, positioning Siemens India for success in the energy market.
- As Siemens India focuses on transformation through digital and infrastructure businesses, the company is poised to establish a strong presence in the African energy market, increasing opportunities for import and export business.
