ABB India stock falls 5% as September quarter results miss Street estimates

ABB India share price: Engineering services company ABB India shares dropped as much as 5 per cent to hit an intraday low of 6,994.05 per share on Tuesday, November 05, 2024.

 

The fall in ABB India share price came after the company’s Q3CY24 results fell short of street expectations. The company follows January to December as its financial year.

 

“ABB India reported a muted set of numbers, with a miss across all parameters,” analysts at Motilal Oswal said in a note. 

 

However, ABB India’s profit climbed 21.4 per cent year-on-year (Y-o-Y) to Rs 440.5 crore on Q2CY24, from Rs 363 crore in Q3CY23.

 

Revenue from operations soared 5.2 per cent annually to Rs 2,912.2 crore in the September quarter of calendar year 2024, from Rs 2,769.1 crore in the September quarter of calendar year 2023. 

 

At the operating front, earnings before interest, tax, depreciation and amortisation (Ebitda) soared over 23 per cent annually to Rs 540.2 crore in Q2CY24, from Rs 438.5 crore in Q3CY23.

 

Consequently, Ebitda margin expanded 280 basis points (bps) to 18.6 per cent in Q3CY24, from 15.8 per cent in Q3CY23.

 

Sanjeev Sharma, managing director of ABB India said, “We have delivered another quarter of consistent performance, creating balanced and profitable growth for our stakeholders and deepening engagement with our customers. The quarter was marked by record levels of backlog complemented by a strong book to bill and cash. We are thankful to our customers and proud of our teams.”

 

Orders 

 

In the third quarter of CY24, total orders reached Rs 3,342 crore, reflecting a 11 per cent increase compared to Q3CY23. 

 

The electrification sector was a key driver of this growth, with notable large orders stemming from the data centre segment for Smart Power and Distribution Solutions. Demand for power distribution equipment remained stable, with a variety of orders for circuit breakers, switchgear panels, and other equipment, the company revealed.

 

In the Motion segment, orders were primarily fueled by the Traction division, which saw increased demand for propulsion equipment, battery chargers, and composite converters. The Process Automation sector also contributed, with orders for automation and blending solutions targeted at energy companies and thyristor rectifiers for metal manufacturers.

 

Meanwhile, in the Robotics and Discrete Automation segment, orders from the non-automotive and electronics industries were predominant, although overall numbers were lower due to a few major orders in Q3CY23. 

 

As of September 30, 2024, ABB India reported a robust order backlog of Rs 9,995 crore, a 25 per cent year-over-year increase, which enhances revenue visibility and aligns well with the company's growth strategies for the upcoming quarters.

 

“In line with our goal to achieve sustainable growth taking a longer-term view of the market, our order basket comprised an optimal combination of long and short cycle orders as has been the trend for the current and past few quarters. The large orders, a marker of economic robustness led by government led capex revival, emerged from diverse sectors like transportation, metals, and even new ones like the data centres. This provides each division the flexibility to leverage opportunities as per their business cycles and bandwidth and entails revenue conversion from a vibrant and varied basket of orders and timeframes,” Sharma added.

 

Outlook

 

According to ABB India, the Indian market remains optimistic, supported by expectations of robust capital expenditure in infrastructure development and industrial expansion, despite some economic slowdown in the previous quarter. The ongoing crisis in West Asia is affecting energy prices, freight costs, and supply chains, making it essential to monitor the situation closely. 

 

Nevertheless, increased festive consumption and year-end spending are anticipated to further invigorate the economy, the company said. 

 

India's swift embrace of automation, digitalisation, and process-driven manufacturing solutions across various industries is likely to sustain capital investments in infrastructure, productivity-enhancing technologies, and localised manufacturing. 

 

Additionally, sectors such as green energy and value-added exports exhibit resilience and growth potential in the near term. Therefore, ABB India claimed that it is strategically positioned to capitalise on these trends, driving innovation and operational efficiency in a dynamic market.

  ABB is an engineering services company with more than 105,000 employees worldwide. ABB’s shares, apart from BSE, NSE, are listed on the SIX Swiss Exchange (ABBN) and Nasdaq Stockholm (ABB).   

At 10:50 AM, ABB India shares were trading 3.36 per cent lower at Rs 7,114.80 per share. In comparison, BSE Sensex was down 0.03 per cent at 78,762.09 levels.