Prefer Siemens to ABB India: What JM says post LMV biz sale to parent
JM Financial prefers Siemens over ABB India, given relatively stronger ordering trends and scope for margin improvement in FY27.
- Dec 10, 2025,
- Updated Dec 10, 2025 9:11 AM IST
JM Financial on Wednesday said Siemens' decision to sell its low-voltage motors (LVM) business for an enterprise value of Rs 2,200 crore is value-accretive, adding that it removed a long-standing overhang on the company.
The domestic brokerage assigned Rs 40 per share, or Rs 1,400 crore, to the business in its valuation, and viewed the exit as being in the best interest of investors, given LVM’s prolonged struggles and a lack of technology access.
JM Financial valued Siemens India at 50 times expected H1FY27 earnings, in line with ABB, to derive its Rs 3,480 target price. The target has been raised on expectations of higher other income from the enlarged cash base.
The domestic brokerage said it prefers Siemens over ABB India, given relatively stronger ordering trends and scope for margin improvement in FY27. "The stock traded at 51x FY27E EPS of Rs 63.30, which the brokerage viewed as attractive relative to ABB," it said.
The LVM business had limited visibility on growth or margin improvement, JM Financial said adding that the segment reported Rs 967 crore in sales in the 12 months ended September 2025. On a continuing basis, the brokerage suggested sales of about Rs 1,200 crore in FY28–29 with an Ebit margin of roughly 4 per cent and no meaningful drivers for improvement.
According to JM Financial, the business was structurally constrained after Siemens AG completed the global sale of Innomotics to KPS Capital in October 2024, transferring all intellectual property rights.
This left the LVM operation as a sales and marketing unit with 89 employees and near-total dependence on Innomotics for manufacturing, IP and capabilities. Such dependence effectively prevented a sale to any alternative buyer.
JM Financial said the LVM unit had experienced a steady decline in sales and margins. After minority shareholders rejected the earlier divestment proposal, management appeared to stop investing in expansion, had no intention of restructuring the franchise and refrained from committing fresh capital. This resulted in a sustained weakening of both volumes and operating profitability.
The brokerage said the upcoming analyst meet on December 12 would be crucial for clarity on the sustainability of Smart Infrastructure margins and growth, the stabilisation of Digital Industries margins, and the durability of Mobility margins, which were at multi-quarter highs. JM Financial referenced Siemens AG’s commentary indicating that Smart Infrastructure margins may hold globally and that Digital Industries headwinds may have bottomed.
JM Financial on Wednesday said Siemens' decision to sell its low-voltage motors (LVM) business for an enterprise value of Rs 2,200 crore is value-accretive, adding that it removed a long-standing overhang on the company.
The domestic brokerage assigned Rs 40 per share, or Rs 1,400 crore, to the business in its valuation, and viewed the exit as being in the best interest of investors, given LVM’s prolonged struggles and a lack of technology access.
JM Financial valued Siemens India at 50 times expected H1FY27 earnings, in line with ABB, to derive its Rs 3,480 target price. The target has been raised on expectations of higher other income from the enlarged cash base.
The domestic brokerage said it prefers Siemens over ABB India, given relatively stronger ordering trends and scope for margin improvement in FY27. "The stock traded at 51x FY27E EPS of Rs 63.30, which the brokerage viewed as attractive relative to ABB," it said.
The LVM business had limited visibility on growth or margin improvement, JM Financial said adding that the segment reported Rs 967 crore in sales in the 12 months ended September 2025. On a continuing basis, the brokerage suggested sales of about Rs 1,200 crore in FY28–29 with an Ebit margin of roughly 4 per cent and no meaningful drivers for improvement.
According to JM Financial, the business was structurally constrained after Siemens AG completed the global sale of Innomotics to KPS Capital in October 2024, transferring all intellectual property rights.
This left the LVM operation as a sales and marketing unit with 89 employees and near-total dependence on Innomotics for manufacturing, IP and capabilities. Such dependence effectively prevented a sale to any alternative buyer.
JM Financial said the LVM unit had experienced a steady decline in sales and margins. After minority shareholders rejected the earlier divestment proposal, management appeared to stop investing in expansion, had no intention of restructuring the franchise and refrained from committing fresh capital. This resulted in a sustained weakening of both volumes and operating profitability.
The brokerage said the upcoming analyst meet on December 12 would be crucial for clarity on the sustainability of Smart Infrastructure margins and growth, the stabilisation of Digital Industries margins, and the durability of Mobility margins, which were at multi-quarter highs. JM Financial referenced Siemens AG’s commentary indicating that Smart Infrastructure margins may hold globally and that Digital Industries headwinds may have bottomed.