Brokerages retained their bullishness on engineering and capital goods giant ABB India following its earnings show for the quarter ended June, where net profit jumped over 50 percent.
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 2,508.63 crore a year ago. The company follows a January-December financial year.
At 11.30 am, ABB India shares were trading at Rs 7,816.7, down two percent on the NSE.
Follow our live blog to catch all the updates
ABB India beat Street’s PAT estimate by 11 percent led by GM improvement (700 bps on-year to ~46.1 percent) for Q2CY24, but the revenue fell under expectations. Large-ticket orders showed strong momentum, noted Nuvama Institutional Equities.
The brokerage added, "We remain optimistic on ABB given its strategic presence across
railways, data centres, electronics, RE, power distribution, and water, which sum up India’s capex super-cycle." The brokerage maintained its buy rating, with a revised target price of Rs 9,400 per share.
"ABB India reported mixed results in 2QCY24 as revenue was weak but margins continued to beat estimates for another quarter. Revenue miss was due to delayed revenue booking in some orders, while margin outperformance was mainly driven by pricing gains," said Motilal Oswal.
The brokerage added that the operating leverage gives limited scope to improve margins, but they will be driven by pricing gains from an improved share of high-margin segments. Motilal Oswal kept its buy call intact, with a target price of Rs 9,500 per share. This indicates a 19 percent upside from previous levels.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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!
