YES Securities' research report on ABB India
Revenue was down 18% yoy due to supply chain disruptions, lower service revenues on the account of national lockdown & non-receipt of delivery clearances. Lockdown impact was at Rs2bn. Order inflow grew by 18% (ex-solar inverter) to Rs19.5 led by deal wins in Energy & Turbocharging Industries, large contract by Indian Railways & good traction in export orders of motors. Order backlog stood at Rs44.4bn (~0.7x TTM sales) EBITDAM contracted 691bps yoy to ~1% due to volume shortfall, adverse mix with shortfall in service revenues, forex & commodity MTM impact of ~Rs350mn & ECL impact in Industrial automation. No material deterioration in working capital on qoq basis. Cash position remains strong at ~Rs15bn.
Outlook
The Stock is currently trading at 58x TTM earnings vs 15-yr average trailing P/E of ~64x, implying ~10% discount. We retain ‘BUY’ rating with TP of Rs961 at 45x on Mar’22 earnings.
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