Accumulate ABB; target of Rs 1415: Prabhudas Lilladher

Prabhudas Lilladher's research report on ABB

ABB reported sales of Rs27.1bn (PLe: Rs24.5bn), up 21.5% YoY. Revenue growth was supported by Raigarh-Pugalur (RP) HVDC project, growth in medium voltage offerings and a revival in the process industries. EBITDA was up 33% YoY at Rs1.9bn led by cost savings, better product mix and higher absorption (PLe: Rs1.6bn), EBITDA margins came in at 7.2%, up 60bps YoY (PLe: 6.8%). PAT was up 36% YoY to Rs1.02bn (PLe: Rs922mn).

Outlook

We expect the stock to deliver 20% earnings CAGR over CY16-19E. We have cut our earnings for CY18E and CY19E by 4% and 1% respectively to factor in commodity and currency headwinds. We maintain 'Accumulate 'with TP of Rs1,415.