Shares of ABB India are in focus on Tuesday after JPMorgan improved its outlook on the counter, even hiking the target price while maintaining a neutral rating. The brokerage firm noted ABB India's robust order inflows, which improve the company's outlook, but pointed to demanding valuations.
In its latest note, JPMorgan hiked ABB India's target price from Rs 5,639 to Rs 6,001 after the company reported a healthy year-on-year growth in order inflows in the fourth quarter of calendar year 2025.
Indeed, ABB India's order inflow grew as much as 52% year-on-year to Rs 4,100 crore while base orders grew 27%. The company also secured large orders across various segments, including low and medium voltage switchgear for data centres, rectifiers for infrastructure and robotics for automotive consumers.
While ABB India's robust order inflows paint a strong picture, JPMorgan remains on edge about the company's valuation. Trading at approximately 57 times its estimated Dec. 2027 earnings per share, ABB India remains expensive, especially when weighted against its projected mid-teens revenue and earnings growth.
The brokerage also noted that India's capital expenditure environment is transitioning into a more normal phase of about 10% growth after several years of stronger post-COVID expansion.
As far as Q4 was concerned, JPMorgan described the profit and loss statement as 'weak'. Revenue for the fourth quarter stood at Rs 3,560 crore, which accounts for a 6% year-on-year gain. The Ebitda margin contracted to 15.4% from 19.5% a year earlier. Margins were adversely impacted by a Rs 65 crore labour code provision.
Looking ahead, JPMorgan views the India-EU Free Trade Agreement as a medium-term positive for the firm. With imports comprising roughly 20% of its revenue—almost all from the European Union—ABB India stands to benefit significantly from a progressive decline in import duties on key electrical products.
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