The stock of power and automation technology firm hit its 6-month high has surged 18% as compared a to 1.5% decline in the S&P BSE Sensex. It was trading at its highest level since March 7, 2018.
ABB Chief Executive Ulrich Spiesshofer met Prime Minister Narendra Modi and discussed how the company can help accelerate the transition of public transportation to electric power, the company said Saturday. The meeting between Modi and Spiesshofer took place on Friday during the Global Mobility Summit 'MOVE' in New Delhi.
“Spiesshofer’s meeting with the Prime Minister comes at a time when India has set an ambitious target of producing 227 GW of renewable energy by 2022, and has launched an initiative to electrically power majority of its public transport vehicles. India is also investing to make its power grid more resilient in the face of growing demand, the company said.
The government is targeting electric vehicles to account for 15% of all vehicles sales in five years in a bid to curb greenhouse gas emissions and dependency on fossil fuels. An estimated 2,000 EVs were sold last year.
In India, ABB is the only company with capabilities spanning the entire electricity value chain, from grid infrastructure, to automation and power management, to electrification, including electric vehicle charging. ABB is a digital leader at the forefront of the Energy and Fourth Industrial Revolutions and has been a leader in electrification and e-mobility for well over a century.
The brokerage firm maintains ‘buy’ rating on ABB India with a 12 month target price of Rs 1,678 per share.
“Looking ahead, we expect ABB’s earnings to witness 30.1% CAGR through CY17-19E, while RoE is expected to improve to 14.8% in CY19E from 11.5% in CY17. On the back of strong presence in power T&D space, we believe the stock to command higher multiple, going forward, the brokerage said in Q2CY18 result update.
At 10:33 am; ABB India was trading 4% higher at Rs 1,439 on the BSE. On comparison, the S&P BSE Sensex was up 0.24% at 37,502 points. The trading volumes on the counter nearly doubled with a combined 237,168 shares changed hands on the BSE and NSE so far.