ABB profit seen rising by 32%

Engineering major ABB India is expected to report a 41.5 per cent year on year rise in topline to Rs 731 crore for the October-December quarter, according to the average of six brokers polled by Crisil MarketWire.

Net profit is expected to grow 32 per cent on year to Rs 65.22 crore. ABB, which follows the January-December accounting calendar, will detail its earnings February 1.

The net profit forecasts vary from a low of Rs 54.9 crore to a high of Rs 72 crore. The revenue forecasts for the quarter range between Rs 610 crore and Rs 827 crore.

Dealers and analysts are bullish on the engineering and infrastructure sector in the medium to long term because of the growth in gross domestic product, and increase in government spending on infrastructure. Also, more and more engineering firms in India are winning global contracts amid stiff competitions.

Earlier this month, ABB India had won a 1.3 billion rupees order from the West Asia.

"The things to look out for (in ABB India's results) would be their order book, delivery schedule, and contribution of products to their topline," said an analyst with a local brokerage firm.

"ABB is realigning its product mix in favour of products and services, which now constitute 40 per cent of total revenues as compared to 20 per cent earlier. The lower proportion of revenues from the projects business would reduce cyclicality, improve margins, reduce average receivables, enable faster order revenue conversion time and result in a more balanced quarterly revenue spread," said a recent Motilal Oswal Securities' report.

"Evening out of order execution and growing dominance of products might result in lower yoy (year-on-year) growth this quarter (October-December) then in the previous quarters," said a Kotak Securities report.