ABB India drops amid volatility after poor Q2 numbers

ABB India lost 1% to Rs 489.55 at 10:54 IST on BSE after net profit fell 23.07% to Rs 40 crore on 7.42% decline in revenue to Rs 1720 crore in Q2 June 2013 over Q2 June 2012.

The Q2 result was announced on Friday, 9 August 2013. The stock market was closed on that day on account of Ramzan Id.

Meanwhile, the S&P BSE Sensex was up 92.04 points or 0.49% at 18,881.38.

On BSE, 4,730 shares were traded in the counter as against average daily volume of 40,870 shares in the past one quarter.

The stock was volatile. The stock lost as much as 2.92% at the day's low of Rs 480.05 so far during the day. The stock rose as much as 0.7% at the day's high of Rs 498 so far during the day. The stock had hit a 52-week low of Rs 462.50 on 6 August 2013. The stock had hit a 52-week high of Rs 830 on 12 November 2012.

The stock had underperformed the market over the past one month till 8 August 2013, sliding 16.25% compared with the Sensex's 2.77% fall. The scrip had also underperformed the market in past one quarter, declining 7.79% as against Sensex's 6.01% fall.

The large-cap company has equity capital of Rs 42.38 crore. Face value per share is Rs 2.

ABB India said that it continues to follow a policy of cash over revenue in its businesses to mitigate the credit risk in the market. Localized offerings also enabled the company to stay competitive in a tough economic environment. The company said that savings from operational excellence initiatives and cost take out programs helped offset the impact of price pressures and the higher cost of working capital.

ABB India's adjusted operational earnings before interest, taxation, depreciation and amortization (EBITDA) rose 27.58% to Rs 111 crore in Q2 June 2013 over Q2 June 2012. Adjusted EBITDA margin improved to 6.4% from 4.7% a year ago.

ABB India's order intake declined 15.35% to Rs 1731 crore in Q2 June 2013 over Q2 June 2012, reflecting a challenging business environment as customers continue to exercise caution on large investments. ABB said it continues to focus on balancing its risks and returns.

ABB India said that the company's thrust on exports and new business streams yielded results with export orders demonstrating clear growth over successive quarters. Orders from sectors such as renewable energy continued on their growth trajectory.

The company's order backlog stood at Rs 8235 crore as on 30 June 2013, as against Rs 9175 crore as on 30 June 2012.

Commenting on the company's Q2 results, Bazmi Hussain, MD, ABB India said, "The economic environment is now increasingly depressed. Our multiple productivity and operational excellence initiatives are yielding results. We are confident that our broad portfolio, cost take out programs, localization initiatives and the ability to find new opportunities will give us pole position as market eventually revives."

ABB is a leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries.

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