Prabhudas Lilladher's research report on ABB India
We revise our CY24/25E EPS estimates by +11.1%/6.6% factoring in continued healthy prospects and better margin profile. ABB India (ABB) reported strong quarterly performance with revenue growing 12.8% YoY and EBITDA margin expanding by 526bps YoY to 19.2%. Domestic demand momentum continues to remain strong across data centers, automation in energy and metals, traction & propulsion technology in rail & metro, and robotics in EV and electronics, with increasing penetration in Tier II & III markets. Given the sustained demand expected over the next 5-10 years, the company has prepared capacity expansion plans across segments. Leverage from rising capacity utilization will continue to aid margins. ABB is also seeing growing offtake in export markets, but continues to remain selective. We remain positive on ABB given 1) the increasing traction for energy efficient and premium quality products, 2) its resilient business model, 3) its focus on high-growth areas such as data centers, rail & metro, renewables, and electronics, and 4) the strong domestic order pipeline. The stock is trading at a P/E of 89.5x/75.1x CY24/25E.
Outlook
We maintain ‘Accumulate’ rating with a revised TP of Rs8,833 (Rs8,400 earlier) valuing the stock at a P/E of 76x Jun-26E (same as earlier).
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