ABB India slumps 8% after parent firm posts slow Q2 growth

ABB, in the third quarter of CY2023, anticipates a low double-digit comparable revenue growth and the Operational EBITA margin to be slightly up from the 16.6 percent reported in the third quarter last year.

ABB India shares tumbled 8 percent at Rs 4,146 apiece on July 20 at 11:18 am, with nine lakh shares changing hands on NSE. This comes after the Swedish automation major' order inflows declined 2 percent to $8,667 million as against $8,807 million in the same quarter last year.

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Two out of the four business sectors experienced order growth in the single digits. Process Automation saw a decline due to changes in the portfolio, while Robotics and Discrete Automation also decreased compared to the previous year, which had benefited from pre-buys during a period of notable component shortages.

In the Asia, Middle East, and Africa regions, order intake declined because the positive progress in countries like India and Saudi Arabia couldn't compensate for declines in other countries such as China.

The company's revenues increased by 13 percent, reaching $8,163 million, compared to the previous amount of $7,251 million. The Operational EBITA margin showed significant improvement, rising by 200 basis points year on year to 17.5 percent, with all four business areas surpassing 15 percent.

This improvement was backed by a strong price contribution, which effectively counterbalanced labor inflation and some minor cost inflation associated with commodities. Additionally, operational leverage resulting from higher production volumes also played a role in supporting the positive outcome.

ABB, in the third quarter of CY2023, anticipates a low double-digit comparable revenue growth and the Operational EBITA margin to be slightly up from the 16.6 percent reported in the third quarter last year.

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