Axis Direct's research report on ABB
ABB’s Q3CY17 (Y/E Dec) revenue at Rs 19 bn (down 7% YoY) was ~15% lower than our/consensus expectations. Order inflow at Rs 19 bn (down 35% YoY; large railway order of Rs 10 bn year ago) was slightly lower than expectations. Management commented that Q3 order inflow as well as execution was impacted by GST-related issues; these issues have been resolved and, orders/sales should flow in Q4 and CY18. Management’s outlook commentary was positive for most segments.
Outlook
We trim our CY17 EPS to Rs 21 (Rs 23 earlier) and CY18 EPS to Rs 34 (Rs 35 earlier) to adjust for Q3 results partially compensated by higher revenue/order inflow expected over the next few quarters. Our revised TP stands at Rs 1,690 (50x CY18E) vs. Rs 1,750 earlier.
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