Engineering major ABB India is likely to report a mixed for the second quarter (the company follows a January-December reporting calendar, and its Q2CY25 corresponds to Q1FY26) on the back of a higher base in the previous quarters. The company is scheduled to announce its earnings on August 2. ABB India provides electrification, automation, motion, and digital solutions to the industrial, utility and infrastructure sectors. Net profit is expected to increase by around 6.9 percent year-on-year to around Rs 476 crore.
According to a Moneycontrol poll of seven brokerages, revenue is expected to increase nearly 11 percent on-year to Rs 3,179 crore. EBITDA (earnings before interest, taxes, depreciation and amortisation) margin is expected to decline to 18.3 percent from 19.2 percent in the previous fiscal.
The most optimistic is Emkay Global, which expects net profit to grow to Rs 506 crore, a 14.3 percent annual growth and around 6 percent growth sequentially. On the other end, the most pessimistic is Equirus, which estimates net profit to drop 3.2 percent from a year earlier.
The stock has fallen around 30 percent over the last one year.
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Key drivers for earnings:
Growth across businesses
ABB’s revenue growth is expected to accelerate in Q2CY25, driven by stronger execution across its core businesses. Most brokerages anticipate annualised revenue growth of 10–16 percent. The electrification (EL) and motion (MO) segments are expected to continue leading this growth, with demand buoyed by industrial activity, automation and power infrastructure investments. Yes Securities expects EL to grow by 15 percent and MO by 10 percent, while Equirus sees both segments contributing significantly to a 16 percent overall revenue uptick. However, process automation is forecast to remain a drag, with flattish to declining growth expected, as the segment faces delays in customer decision-making and a deteriorating order backlog, some brokerages suggest.
Margins to moderate
Margin performance is likely to moderate from the record highs seen in CY24. Brokerages note that ABB had benefitted from favourable pricing, high utilisation and strong mix in previous quarters, but most brokerages see some normalisation ahead. Equirus notes that margins in MO and EL had reached unsustainable levels and should taper off. Yes Securities expects a sequential decline in EBIT margins to 16.3 percent, mainly due to reduced pricing tailwinds in EL. In contrast, Nomura is relatively optimistic and suggests that an improved product mix, higher localisation and easing input costs could support margin stability. Motilal Oswal also believes margins may remain stable sequentially despite year-on-year softness, helped by efficient execution and volume leverage in certain segments.
Order inflow
Order inflows remains important for ABB India. While base orders continue to exhibit short-cycle momentum, especially from sectors like data centres, electronics, railways, logistics and warehousing, growth from traditional industrial capex areas appears to be moderating. However, Nuvama highlights that order inflows from new-age sectors are helping offset cyclical weaknesses and driving operational efficiency. The current quarterly order inflow run-rate of Rs 3,200–3,500 crore needs to scale up to Rs 4,000–4,500 crore over CY25–26 to sustain current growth expectations. Motilal Oswal flags the need for incremental orders from the transmission, private capex and transportation sectors, while Nomura will be watching for base order momentum and prospects of large project wins.
What analysts will be watching for
Analysts will be keeping an eye on management commentary on order flows, margins and capex plans across segments.
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