ABB India Ltd share Price

The capital goods sector continues to outperform maintaining higher high-low in all time frame. Within the sector, we remain constructive on ABB as it has generated a breakout above the falling channel containing last five months corrective consolidation signalling resumption of up move thus offers fresh entry opportunity

Buying demand has recently emerged after a higher base at the 52 weeks EMA (currently placed at ₹ 2693) and the rising demand line joining lows of April 2021 (₹1299) and May 2022 (₹ 2000) signalling strength

Structurally the stock has already taken 22 weeks to retrace just 61.8% of its preceding 11 weeks rally (₹2120-3446). A shallow retracement signals a robust price structure and a higher base formation
 
We expect the stock to extend the current up move and head towards ₹ 3348 levels in the coming months being the confluence of the high of October 2022 and the 80% retracement of recent breather (3446-2640)

ABB India (ABB) is a leader in technology solutions connecting software to its electrification, robotics, automation and motion portfolio. It operates in mainly three key segments including robotics & motion (41%), electrification (38%), industrial/ process automation (22%).
 
In Q3CY22* (Dec Ending) ABB reported a strong performance. Revenue at ₹ 2119.7 crore, grew 19.2% YoY, owing to better execution and value added volume mix. Robotics & motion segment grew 23% on a YoY basis to ₹ 939.8 crore. Electrification segment grew 27.1% YoY to ₹ 881 crore while industrial automation segment revenue grew 3% YoY to ₹ 350 crore. Robotics & motion, electrification, industrial automation segments contributed ~44%, ~42%, 17%, respectively.
 
EBITDA came in at ₹ 211 crore with margins of 10%. Margin growth was supported by quality execution. While gross margins were flat at 37.9% YoY. Adjusted PAT came in at ₹ 168.7 crore (vs. our estimate of ₹ 159.7 crore), up 40.7% YoY aided by other income. Also, there was a one-time extraordinary gain (₹ 46 crore) on the final divestment of the turbo charger business.

Order inflows came in pretty strong at ₹ 2634 crore, up 38% YoY, registering decent growth in all business segments. Process automation was the spearhead, with wins from large conglomerates in steel, cement, gas, resulting in 96% YoY growth in orders. Electrification business area was up 36% compared to Q3CY21 due to strong customer connect leading to good order inflows across all channels, divisions and segments. Motion business area orders, up 20% YoY were also supported by good contribution from channel business, exports and package orders for motors and drives. Robotics and discrete automation clocked higher paint orders. However, overall orders de-grew 18%. The order backlog as of Q3CY22 was at ₹ 6519 crore, up 37%, YoY

Heavy electrical equipment company ABB India announced Q1FY24 results:

• Revenue of 22% YoY to Rs 2,509 crore in Q2CY23
• Number of orders up 10% YoY to 3,044
• Orders backlog went up by 29% YoY to 7,727
• Profit before tax up 101% YoY to Rs 393 crore in Q2CY23
• Profit after tax up 101% YoY to Rs 296 crore in Q2CY23
• Orders grew for Q2CY23 despite a higher base driven by a good mix of emerging and traditional segments
• Double-digit revenue and profitability growth across all business areas
• ~90% reduction in own GHG (scope 1 and 2) emissions till Q2CY23, as compared to the 2019 baseline across all manufacturing locations
• Board approves a special dividend of 275%

Commenting on the company’s performance, Sanjeev Sharma, Managing Director, ABB India said, “ABB India’s Q2 performance is testimony to the strength of its industry-leading portfolio and capabilities. We continued growth momentum during the quarter, built on strong order backlog execution, delivering highest ever quarterly operational EBITA. In today's competitive dynamic environment, our customers continue to show unwavering confidence in ABB India as we remain a preferred partner of choice for our technology and digital solutions. Our balance sheet and cash position remain robust, putting us in a strong footing to prepare for future opportunities. We continue to prioritize our ESG goals in line with ABB Group’s Sustainability strategy.”

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