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ICICI Securities Report
ABB India Ltd. reported another strong set of results. Revenues grew by 13% YoY, below its recent growth of >20% YoY (CY22- 23) due to election related uncertainties. Ebitda margin for the quarter stood at 19.2% – highest in its history. As a result, Ebitda grew by 56% YoY to Rs 5.4 billion and profit grew by 50% to Rs 4.4 billion in Q2 CY24.
Order inflow print, at Rs 34 billion, growing 13%, was aided by large order while base orders were flat in H1. Note that current order book of Rs 95 billion (+23% YoY) is driven by large orders; 50% of these orders have longer lead times (versus 20%, CY22). Moreover, we believe that margins have peaked and will likely lead to moderation in H2.
We are baking in 18% Ebitda margin for CY25E/CY26E (versus 11%/14% in CY22/CY23).
Upgrade to Reduce with a target price of Rs 7,300 (versus Rs 5,330 earlier) per share on account of expensive valuations.
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Oil India Q1 Results Review – Production Growth Key Monitorable: Prabhudas Lilladher
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