ABB India Q1 Results Review: Shares Gain On Profit Beat Even As Nomura Maintains Neutral Rating

Shares of ABB India Ltd. gained after its first-quarter profit beat analysts' estimates, even as brokerages expect continued strong momentum in order inflows.

The company's first-quarter consolidated net profit declined 34% year-on-year to Rs 244.89 crore, according to an exchange filing, but was ahead of Bloomberg's estimate of Rs 183.9 crore.

Revenue gained 22.5% to Rs 2,411 crore, compared to Bloomberg's estimate of Rs 2,229.95 crore.

ABB India Q1 CY23 (Consolidated, YoY)

• Revenue is up 22.5% at Rs 2,411 crore (Bloomberg estimate: Rs 2,229.95 crore).

• Ebitda is up 52% at Rs 285.31 crore (Bloomberg estimate: Rs 215.3 crore).

• Ebitda margin: 11.8% versus 9.5% (Bloomberg estimate: 9.65%).

• Net profit fell 34% to Rs 244.89 crore (Bloomberg estimate: Rs 183.9 crore).

Shares of the company rose 5.55% to close at Rs 3,645.35, compared to a 0.92% gain in the benchmark Nifty 50.

Of the 27 analysts tracking the stock, nine maintain a 'buy,' nine suggest a 'hold,' and two recommend a 'sell,' according to Cogencis data. Among the remaining analysts, four were 'neutral' between 'buy' and 'hold' and three were neutral between 'hold' and 'sell'.

What Nomura Says:

• Maintains 'neutral' with a target price of Rs 3,274 per share.

• Says continued strong momentum in order inflows is the key upside risk.

• Ebitda margin underperformance can be a key downside risk.

• Results beat the consensus estimate, led by significantly higher than estimated profitability in the electrification segment.

• Ebitda margin came in significantly above estimates, largely led by the beat in the electrification segment.

• Order inflow growth was strong at about 36.4% year-on-year and beat the estimate.