Hold ABB; target of Rs 1400: Axis Direct

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26 Aug, 2025 12:21

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Axis Direct's research report on ABB

ABB’s Q1CY17 order inflow at Rs 23 bn increased 28% YoY, which was significantly better than estimate. Growth was broad-based: 5-fold rise in large orders (on a low base), short cycle base orders (up 17%), services (up 40%) and exports (up 120%). Order backlog at Rs 120 bn was up 54% YoY and 2% QoQ.

Outlook

We cut our CY17 EPS to Rs 25 (Rs 26 earlier) and CY18 EPS to Rs 35 (Rs 40 earlier) to adjust for expected credit loss impact and increasing competitive pressure in renewables equipment market. However, we raise our target multiple to 40x (vs 35x earlier) to account for strong order inflow and improved outlook for T&D markets and private capex. Our TP stands at Rs 1,400 (40x CY18E).

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