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Informist, Tuesday, Feb. 18, 2025

 

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--ABB India: Data centres, Infra, robotics, mining to lead future growth 
--CONTEXT: ABB India mgmt's comments in post-earnings analyst call 
--ABB India: Metro rail, railways to aid future growth 
--ABB India: Metals and mining sector to provide future opportunities 
--ABB India: Engaged with global mining cos to offer co's pdts, solutions 
--ABB India: Current order book provides growth visibility for next 4 qtrs 
--ABB India: Cash on hand at INR 53.9 bln as on Dec 31 
--ABB India: Expect large orders in railways, metals, power distribution 
--ABB India: Robotics segment sales rose 14% YoY in Oct-Dec 
--ABB India: Evaluating inorganic growth opportunities by using cash pile

 

By Narayana Krishna and Noopur Bhandiwad

 

HYDERABAD/MUMBAI – ABB India Ltd. on Tuesday said its current order book provides a clear visibility of revenue growth for the next four quarters, and the order pipeline also looks positive. The company expects large order flows from railways, metals, mining and power distribution segments, ABB India's management said in a post-earnings analyst call.

 

ABB India reported a net profit of INR 5.28 billion for Oct-Dec, up 56% from a year ago. It also reported 22% on-year growth in revenue at INR 33.65 billion, beating analysts' estimates for both revenue and net profit growth. The performance in the December quarter was aided by electrification and motion segment operations, management said, adding that other business segments also performed well during the quarter.

 

As on Dec. 31, ABB India's order backlog was INR 93.8 billion. Though fresh order accruals during the quarter declined 14% on year due to a high base, the company said the order pipeline was robust to help growth. 

 

ABB India's shares gained nearly 4% in inital trade, but erased the gains later. At 1144 IST, the shares were at INR 5,213.25 on the National Stock Exchange, down 0.6%.

 

ABB India operates in 18 business segments, and data centres, electronics, and renewable energy segments are currently supporting the company's growth, it said. Going forward, data centres, infrastructure robotics, and mining are expected to lead the growth, the management said.

 

In the transportation vertical, the company expects metro rails and railways to aid growth in the long term. The management also expects robust growth opportunities in the mining and metals segments. ABB India is engaged with global customers to offer its products and solutions used in the mining sector.

 

On the robotics side, the company clocked 14% on-year growth in the December quarter and expects robust growth in this segment as it has the advantage of application engineering capabilities. On competition from Chinese companies in robotics, the company said that though it has faced formidable competition in one or two cases, it is confident of growth.

 

"...most important thing is that a strong backlog of over INR 93 billion and strong pipeline, which converts book-to-bill, continues to give us good revenue visibility going forward," ABB India said. It said it is expects a 12-15% profit after tax margin on a sustainable basis going forward, as costs on several raw materials and other costs softened in the December quarter. For Oct-Dec, the company reported a PAT margin of 15.8%, while its earnings before interest, tax, depreciation and amortisation margin for the quarter was 19.5%. The management said cost optimisation and pricing power had resulted in better margins for the quarter.

CASH PILE

ABB India's management said it plans to make use of its cash reserves towards both organic and inorganic growth opportunities. As of Dec. 31, ABB India reported a cash balance of INR 53.9 billion. The company said it is distributing cash to its shareholders, which is reflected in the 51% on-year rise in divided announced this quarter. The cash is also being consumed in its organic expansion, which will be clear as the company matures the same and opens them up in the coming months, it said. On Monday, ABB India's board had approved final dividend of INR 33.50 per share.

"We also have a pipeline for organic opportunities and inorganic opportunities, which are being carefully evaluated. And it's not based on how much cash we have; it is based on how much impact it will create for our customers and our businesses in the future. And once we are satisfied, I think this cash can be fairly well utilised in both organic and inorganic opportunities that we see forward," the company said.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Noopur Bhandiwad

Edited by Avishek Dutta

 

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