ABB India Q2 net up 51% on higher productivity

Fuelled by infrastructure and industrial growth country wide, power and automation technologies major ABB India has continued its profit making run for the 27th consecutive quarter. The company's net profit during the second quarter ended June 30, 2007 (Q2FY07) went up 51% to Rs 108.6 crore compared to the corresponding quarter last fiscal.

The company attributed the growth to higher sales, execution of backlog orders and higher productivity. During the quarter, revenue increased 43% to Rs 1,415.6 crore.

ABB India chairman Ravi Uppal predicted good growth for ABB with the Indian government doubling the budgetary spend on infrastructure. "It has given us tremendous opportunity for growth. We expect more orders from projects relating to ports and harbours, SEZs, water supply and management, automobiles and asset management," he pointed out.

Uppal said ABB India is growing at an average of 49% year-on-year for the last three years. "Our growth rate is faster than the GDP (8.6%), industry (10%) and capital goods (15.7%). The investments proposed in various sectors like steel, oil and gas, power, water management and cement production is giving us traction for growth.

"ABB India is the fastest growing subsidiary of the ABB group in terms of order intake. The growth rate is faster than China's, which is the second largest contributor to the group's revenue. However, China's revenue, at more than $3.4 billion, is three times more than our $1 billion-plus revenue last fiscal," he said.

ABB India could, however, face challenge from other subsidiaries. "Countries in West Asia, Russia, Vietnam, Poland, Czech and Romania are all investing heavily in infrastructure. We will continue to focus on profitable growth by keeping costs in check, increasing productivity and enhancing operational efficiencies."

During the first two quarters, ABB India added 1,000 personnel, including 250 engineers, to take the total headcount to 6,500. Its Bangalore R&D centre has already emerged as the largest for the ABB group in terms of people (450 engineers). New line of work such as product development in the automation and power sector has been shifted to this centre.