Buy ABB ; target of Rs 980: Motilal Oswal

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Motilal Oswal 's research report on ABB

ABB’s top line decline of 18% was led by poor performance across segments. While Robotics and Motion witnessed headwinds from the Auto sector, Industrial Automation revenues were impacted by the lockdown. Lower absorption of fixed cost resulted in margin led earnings miss. - Considering the short-cycle nature of ABB’s business and expectation of gradual recovery coupled with the impact of fixed costs, we have cut our CY20E/CY21E earnings by 60%/25%. ABB remains a pure play on longer-term industrial automation and the ‘Make-in-India’ theme.

Outlook

Thus, we maintain our Buy rating with lower TP of INR980 (Prior: INR1,255).

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