ABB India hits new high on strong Q1 results; stock up 33% so far in 2023

Shares of ABB India gained 4 per cent to hit a new high of Rs 3,606.35 in Thursday’s intra-day trade, after the company recorded highest-ever order growth in the January-March quarter (Q1CY23) in last 5 years and 5 quarters.

Thus far in calendar year 2023 (CY23), the stock outperformed market as it surged 34 per cent, as against 0.22 per cent rise in the S&P BSE Sensex.

ABB’s order inflows came at Rs 3,125 crore, up 36.4 per cent year-on-year (YoY) with order backlog of Rs 7,170 crore, which was up by 37.1 per cent, YoY.

The strong order backlog provides revenue visibility and is well-aligned to support growth plans in the coming quarters. The company said it continues to invest in its facilities for meeting the growing demand.

The order growth in electrification was across major segments and channels from diverse sectors – metals, data centers, and IT majors. In motion, the traction orders contributed significantly from channel partner business, railways, metals, cement, F&B and oil and gas, geographically from tier 2 and 3 cities.

Meanwhile, in Q1CY23, ABB reported 64.4 per cent YoY jump in its adjusted profit after tax at Rs 245.2 crore, aided by strong operational performance.

Revenues, too, came at Rs 2,411 crore, up 22.5 per cent YoY on strong order execution. EBITDA came in at Rs 285.3 crore with EBITDA margin of 11.8 per cent, while gross margins came in at 40.4 per cent, expanding by 350 bps YoY and 170 bps on a QoQ basis.

Analysts at ICICI Securities said that all three of ABB’s segments reported double digit revenue growth, and the company will continue to enhance its presence in diverse segments like data centres, electronics, warehouse and logistics, railways and metros, pharma, food and beverage, building infrastructure, and energy companies.

"The company will invest in expanding portfolios, deepening localisation, capacity addition, and productivity with global ABB technology and processes aligned with Make in India momentum," said the brokerage firm.

Technical View

 

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Bias: Positive

Target: Rs 3,700

Support: Rs 3,570

The stock has rallied nearly 16 per cent in the last eight trading sessions, and with today's sharp move it has seen trading above the higher-end of the Bollinger Bands on the daily chart. 

Hence, the near-term bias is likely to remain positive as long as the stock sustains above Rs 3,570 level, suggests the daily chart. As per the weekly chart, the up move can extend to Rs 3,700-level in the near term.

(With inputs from Rex Cano)