Va Tech Wabag, GE Vernova, Siemens, ABB shares: Target revisions ahead of Q1 results

Ahead of the kick start of Q1 results, YES Securities expects capital goods companies under its coverage to report a stable quarter despite ongoing geopolitical tensions. In a note, the domestic brokerage said ‘core’ capital goods companies such as ABB India Ltd and Siemens Ltd may report over 10 per cent sales growth, adjusted for divestments, led by continued execution of order books and sustained high demand from data centers. Margins are seen coming in broadly stable supported by operating leverage. 

Among its coverage universe, YES Securities cut its target price for Siemens to Rs 3,250 from Rs 3,300. It raised price target for GE Vernova T&D India Ltd to Rs 3,850 from Rs 3,700. Target for ABB has been raised to Rs 5,000 from Rs 4,950. The brokerage maintained its target prices for VA Tech Wabag Ltd and Jyoti CNC Ltd at Rs 2,090 and at Rs 1,075, respectively.  

VA Tech Wabag Q1 preview
YES Securities said order intake for VA Tech Wabag may exceed Rs 2,000 crore in Q1, noting that the company announced three orders during the quarter with Kuwait Desal (JV with HEISCO)  being the mega order. YES Securities said it does not think that the current West Asia crisis is having any material adverse effect on the  company. 

"We now forecast over 20 per cent YoY growth during the quarter supported by revenue  recognition in most of the key orders including Al Haer, Yanbu, Indosol, Perur etc.  Margins are likely to see some upside to about 13.5 per cent supported by operating leverage.  We do not anticipate any material benefit from FX depreciation during FY27. We made  only marginal changes to our forecast and retain the price target at Rs. 2,090– based 
on FY28 PE multiple of 22x," it said. 

Siemens Q1 results preview
YES Securities expects Siemens to deliver a growth of 12 per cent, adjusted for LV Motors business, led by 20 per cent strong growth in Mobility and +10% growth in Smart Infrastructure. 

"Digital Industries will be one of the significant beneficiaries of pickup in auto capex. However, we believe there are a few quarters before the upcoming auto capex cycle benefit DI. Growth in MO division will be supported by deliveries of 9K HP locomotive order. Smart Infra will benefit from solid pickup in Data center investments and pickup in auto capex," YES Securities said.

The broking firm expects Siemens to log Ebitda margins are expected at 11 per cent with some improvement in DI and MO. 

"We continue to value the stock at FY28 PE multiple of 50x to arrive at a target of Rs 3,250 (down from Rs 3,300); we reiterate the recommendation at Neutral. We, however, see risk of stock de-rating amidst normalizing sales growth and margins," YES Securities said. 

GE Vernova T&D
YES Securities expects revenue growth momentum to continue with Ebitda margins sustaining above 25 per cent  GE Vernova T&D’s order backlog has swollen to Rs 20,000 crore in part led by the HVDC order. The broking firm said FY27 orders may come in at slightly over Rs 11,000 crore supported by a couple  of related party orders. It sees domestic orders to grow 10 per cent  amidst slowing tendering in domestic transmission markets. 

"Strong orderbook will help sustain  revenues growth at over 30 per cent range with Ebitda margins above 25 per cent amidst operating leverage, pricing, and exports. The company remains on track to deliver 30 per cent sales growth CAGR during FY26-29, while margin is likely to stabilize in 25-26 per cent range during FY27-28," YES Securities said.

ABB Ltd Q2 results preview

YES Securities expects ABB’s sales to grow at 11 per cent in Q2 (June quarter) to Rs 3300 crore supported by 15 per cent growth in Electrification business and 10 per cent growth in Motion business. 

"Both Electrification and Motion  segments will benefit from rising investments in data centers, pickup in auto capex, continued investments in electronics sector and ongoing upgradation and expansion in  railways. We remain cautious of pickup in overall industrial capex amidst geopolitical  tensions, rising inflation and moderating government capex. We believe Process Automation will see a gradual recovery after subdued CY25," YES Securities said.

The brokerage reiterated its recommendation at 'Reduce' for ABB whilst citing a risk of de-rating.