Buy ABB India; target of Rs 6,400: ICICI Securities

ICICI Securitie`s research report on ABB India

ABB India’s 1QCY25 results were lower than our estimates. Revenue/EBITDA/PAT growth of 3% each YoY for the quarter was impacted by softer execution, particularly in the process automation segment. Order inflows were strong and were up by 4% YoY and 39% QoQ on healthy base orders from railways, data centers, electronics, energy, tyres and water treatment, as well as large orders. With improvement seen in inflows, we expect revenue growth to scale up in the coming quarters.

Outlook

We trim our estimates by 3%/5%/5% for CY25/26/27 to bake in continued weakness in process automation segment. ABB is currently trading at 59.0x/53.8x on CY25E/CY26E earnings. We believe that beyond the transient weakness in execution as a result of weak inflows during last year, ABB has the right levers to benefit from improvement in government and private capex. We maintain BUY with a revised TP of INR 6,400, which implies 60x Mar’27E earnings.