Electrification and automation major ABB India reported a 50 percent year-on-year rise in its net profit at Rs 443.5 crore in the June quarter on higher revenue, but fell slightly short of estimates.
The engineering company's total income rose to Rs 2,830.9 crore, up 12.8 percent year-on-year in the June quarter as against Rs 2508.63 crore a year ago.
The company follows a January-December financial year.
Market expectations had pegged ABB India to report a 22 percent YoY increase in net revenue for the quarter ending June 2024 at Rs 3,070 crore, as per average estimates of five brokerage firms.
The company's net profit was expected to increase to around Rs 455.8 crore in the June quarter.
ABB India's board also approved an an interim dividend of Rs.10.66 per share on 21.19 crore equity shares for the financial year 2023-24.
"The interim dividend will be paid on or before September 5, 2024 to the equity shareholders of the company whose names appear on the Register of Members of the Company or in the records of the Depositories as beneficial owners of the shares as on Friday, August 23, 2024," the company said.
The board also approved a Rs 85 crore capital investment for process automation and electrification at a 6.41 acres plot in Yentaganahalli Village near Bengaluru, Karnataka.
ABB India had reported record revenue in the quarter ended March 31, 2024 with the engineering services company gaining from reduced material costs along with capacity leverage and cost optimisation, which led to better profitability.
The company's material costs have continued to stay below 60 percent levels in the June quarter, after falling below the 60 percent mark for the first time ever in January-March 2024.
During the January-March 2024 management call, TK Sridhar, CFO, ABB India had said that the decline in material cost was driven by several factors - increased services and exports, contribution from automation services, and strategic measures such as localization and savings in structural efficiency management (SEM).
In the post earnings presentation, ABB India said that lower material costs supported by capacity leverage and cost optimisation resulted in better profitability.
The company's cash position continued to remain robust at Rs 4,872 crore in June quarter, but fell from Rs 5,036 crore in March quarter. "The sequential lower cash balance was due to final dividend payout for CY2023," ABB India said in the press release.
Total orders were at Rs 3,435 crore, up 12.8 percent from the year-ago period.
ABB India continues to have a strong order book at Rs 9,517 crore, an increase of 23.2 percent YoY, providing good revenue visibility and is well- aligned to support growth plans in the coming quarters, it said.
Policy driven public sector capex, with investments in energy transition, FDI in steel, cement, and incentivising local production (PLI) in areas like specialty steel and battery manufacturing will also augment the opportunity landscape, the company said.
Process automation saw some delays in the realisation of a few large orders, the company said. Robotics and discrete automation posted a significant growth, led by paints and electronics segments.
The ABB India stock ended the day at Rs 7,936.20, up 0.8 percent, ahead of the earnings announcement.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
