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HDFC Securities Institutional Equities
ABB India Ltd. reported muted Q4 CY23 revenue/Ebitda/profit after tax at Rs 27.6/4.2/3.4 billion, missing our estimates by 11/13/13%. The company achieved strong Q4 CY23/CY23 order inflow at Rs 31.5/123.2 billion (+35%/+23% YoY), taking the backlog to Rs 84 billion. Base Q4 CY23 order inflows remained stable and large traction converter order aided growth.
ABB has seen a large order share moving from 8% to 15% in CY23 and future growth is expected to be driven by this. Given the Rs 31 billion/quarter inflow in CY23, growth for CY24 on a higher base looks challenging, but large orders will be the key drivers.
ABB is addressing this by expanding its product portfolio, reaching tier II/III cities through its online marketplace and focusing on services and exports.
Brand premiumisation is helping achieve better pricing and margins. We have recalibrated our estimates to factor in likely muted H1 CY24 ordering.
We maintain 'Add' with a target price of Rs 5,487/share (rolled over to 65 times March-26 earnings per share).
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