Target: ₹5,800
CMP: ₹6,053.95
ABB India reported 6 per cent y-o-y revenue growth to ₹3,560 crore in Q4-CY25, driven by healthy execution, balanced short- and long-cycle orders and higher exports, with all segments posting steady growth. However, margin remains under pressure as adjusted EBITDA fell 7 per cent y-o-y with a 230 bp contraction to 17.2 per cent, dragged by an adverse mix, higher commodity cost, forex volatility and increased imports content due to quality control (QCO) norms.
Order inflows rose 52 per cent y-o-y to ₹4,090 crore, while base orders grew 27 per cent y-o-y across business divisions. Order backlog comprises around 25-30 per cent, consisting of large orders and the rest made up of base orders. Data centres order comprise about 10-11 per cent of the overall order book. Electrification order inflows rose 43 per cent y-o-y, supported by a large data centre order. Process automation orders rose 34 per cent y–o-y while robotics and discrete automation order inflows rose 283 per cent y-o-y . Order backlog stood at ₹10,470 crore, up 6 per cent q-o-q.
Thus, we retain Reduce with a higher TP of ₹5,800 on 55x CY27E P/E, after factoring in slower-than-expected growth momentum in government and private capex. We expect an earnings CAGR of 16 per cent during CY25- 28E with an average ROE and ROCE of 22 per cent each during CY26-28E.