ABB India Shares Climb 7% After Earnings Shatter Estimates: Here's What Brokerages Have To Say

Shares of ABB India surged on Monday following the announcement of an 87.6% jump in net profit for the quarter ending March 31, 2024.

What Happened: The company, adhering to a January to December financial year, posted a net profit of ₹459.3 crore. Last year, during the same period, the net profit stood at ₹245 crore.

The electrification and automation company reported a 27.8% increase in revenue from operations, totalling ₹3,080.4 crore up from ₹2,411 crore the previous year, as per its regulatory filing. The operating profit, or EBITDA, soared 98.1% to ₹565.2 crore from ₹285 crore, pushing the EBITDA margin to 18.4% compared to 11.8% a year earlier.

ABB India also noted that total orders for the quarter climbed to a five-year high of ₹3,607 crore, with significant contributions from data centres, smart buildings, and expansions in smaller cities, as well as the energy and logistics sectors.

See also: Tata Motors India Business Is Now Debt Free — What About JLR’s ₹7,700 Cr Debt?

Analyst Reactions: Brokerages have responded positively to ABB India’s impressive Q1 2024 performance. UBS has set a “Buy” rating with a target price of ₹8,830, citing that ABB’s revenue, EBITDA, and net profit all exceeded their expectations by 4%, 27%, and 25%, respectively. The firm highlighted the strong new order run rate of ₹3,600 crore, up 15% year-on-year and quarter-on-quarter, surpassing UBS and consensus estimates by 2% and 9%, respectively.

Jefferies also maintains a “Buy” rating on ABB India and has raised its target price to ₹8,845 from ₹6,250, driven by a 49% profit beat primarily attributed to margin improvements. The firm noted that no material one-offs affected the margins, indicating sustainable operational performance. Jefferies anticipates a significant pickup in order inflows post-elections in the latter half of the calendar year 2024.

Similarly, Motilal Oswal remains bullish, maintaining a “Buy” rating with a target price of ₹8,500, seeing an 18% upside in the stock.

Price Action: ABB India shares were trading 6.97% higher at ₹7,678.80 on Monday morning, shortly after markets opened for trading.

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