Prabhudas Lilladher's research report on ABB India
We cut our EPS estimates for CY25/CY26 by -16.3%/-14.2% and downgrade the stock from ‘BUY’ to ‘Accumulate’ factoring in near term challenges such as higher import content in raw material and delays in larger orders. ABB India (ABB) reported a revenue growth of 12.2% YoY while EBITDA margin contracted by 612bps YoY to 13.0% . Management attributed the delays in large orders to slower customer decision-making, with a recovery expected in H2CY25. Meanwhile, base order inquiries remain strong, driven by continued traction in data centers, electronics, and renewables. Despite healthy execution across segments, gross margins were pressured by higher imported content in raw material and an unfavorable revenue mix. To meet QCO compliance, ABB has increased raw material imports, with some products requiring readiness by Sep’26 and for others, regulatory clarity is awaited in the coming months with balancing imported and localized materials over the next six months. Furthermore, ABB is facing rising competition from Chinese players, especially in process automation for heavy industrial equipment.
Outlook
The stock currently trades at a P/E of 64.0x/54.6x on CY25/26E. We value stock at a PE of 60x CY26E (63x CY26E earlier) with a revised TP of Rs5600 (Rs6,851 earlier).
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