Buy ABB India; target of Rs 1823: KR Choksey

KR Choksey's research report on ABB India

ABB India Ltd reported revenue growth of 10.8% YoY to INR 27.7bn. The growth was primarily led by Power Grids division. The revenue from Power Grids division (39% of revenue) increased by 14.9% YoY to INR 12.23bn, while Robotics & Motion, Electrification Products and Industrial Automation divisions stood at INR 5.3bn (4.2% YoY), INR 6.3bn (-9.5% YoY) and INR 4.6bn (+9.3% YoY), respectively.

Outlook

We expect revenues to grow at a CAGR of 21% over CY17-19E and PAT to grow at a CAGR of 36% over the same period. We valued the company by assigning a multiple of 50x on the earnings of INR 36.5 of CY19E. We arrived a target price of INR 1823, potential upside of 14%. We maintain BUY rating on the stock.