Siemens shares drop 2.5% after BofA maintains 'underperform' call; Siemens Energy shares down 1%

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26 Aug, 2025 12:21

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Siemens shares dropped around 2.5 percent on June 20 after Bank of America (BofA) Securities maintained its 'underperform' rating on the stock. Siemens Energy, which had seen significant surge in the previous day following its demerger and subsequent market debut, also dropped in trade.

Siemens shares were trading at around Rs 3,203.70 apiece. BofA Securities maintained an 'underperform' call on the stock with a target price of Rs 2,564 apiece. This implies a downside potential of nearly 22 percent from the stock’s previous closing price of Rs 3,284.80 apiece.

BofA Securities said that the stock, after its demerger with Siemens Energy, is expensive at 56x FY27. The global brokerage said that the core business of the company faces weak private capital expenditure. Its growth is currently driven by public capital expenditure and mobility, despite challenges in execution, it added.

The brokerage further noted that Siemens' digital margin remains under pressure, although recovery depends on mobility and smart infrastructure growth.

Siemens Energy shares made debut on market after the power transmission and distribution (T&D) firm's demerger from Siemens on June 19. Siemens Energy shares listed with strong premium at Rs 2,840 apiece, and later jumped 5 percent to hit the upper circuit at Rs 2,982 apiece.

The stock has, however, lost steam today, dropping nearly 5 percent in the morning to hit an intraday low of Rs 2,610. The newly-listed stock, however, has made some recovery later on June 20, and was trading over 1 percent lower at Rs 2,705.

BofA Securities had noted that the stock is trading at a premium over its peers. HDFC Securities initiated coverage on the stock with a 'Buy' call, with a target price of Rs 3,000 apiece. This implies an upside potential of nearly 10 percent from the stock’s previous closing price.

Motilal Oswal Financial Services also initiated coverage with a 'Buy' call and a target price of Rs 3,000. "With improvement in revenues and increased demand, we expect operating leverage to improve margin. Company has receivables from Siemens Ltd which once received would aid other income. We thus expect a PAT CAGR of 31% over FY25-27," it said.

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