Strong outlook, sector re-rating to support ABB stock after Q2 results

ABB declared strong second quarter of financial year 2023-24 (Q2FY24) results with strong revenue growth and expanding operating profit margins. 

The management, banking on visible green shoots in the economy, guided to better order inflows. Sectors like food and beverage, data centres, warehouse logistics, rail and metros, electronics and renewables are driving growth with interest in process automation. Motion and electrification have also maintained strong order-inflow momentum and the company is expanding its presence in Tier-II and –III cities.
 

ABB is a key beneficiary of the pickup in the capex cycle. The margins could moderate from July-Sep 2023 quarter levels due