Stock Of The Day: ABB India Hits Record High — Key Levels, Analyst Views
Jefferies and Motilal Oswal have raised their target price for ABB.
Shares of ABB India Ltd. jumped over 8% on Monday to an all-time high after the integrated power equipment manufacturer posted a strong set of numbers in the first quarter of calendar year 2024.
ABB Q1 CY24 Earnings Highlights (Consolidated, YoY)
Revenue up 28% at Rs 3,080.4 crore versus Rs 2,411.2 crore.
Ebitda up 98% at Rs 565.2 crore vs Rs 285.3 crore.
Margin expands 651 basis points at 18.34% vs 11.83%.
Net profit surged 88% at Rs 459.3 crore vs Rs 244.9 crore.
Key Levels To Watch
Support: Rs 7,030 (Two-session Low)
Resistance: Rs 7,791.5 (Record High)
The company's stock rose as much as 8.5% during the day to Rs 7,791.50 apiece on the NSE. It was trading 7.13% higher at Rs 7,680 per share, compared to a 0.86% decline in the benchmark Nifty at 10:11 a.m.
Order-Book Growth
ABB observed a strong growth momentum in orders in the first quarter of calendar year 2024. The company said the order book maintains a healthy mix of short as well as long-cycle opportunities. Its total orders surged to Rs 3,607 crore, the highest for the first quarter in the last five years.
The quarterly growth was mainly led by the electrification and process automation business area. This growth more than offset the sluggishness in areas like motion and robotics, discrete automation, it said.
The order backlog as of first quarter of 2024 stood at Rs 8,932 crore, up 25% year-on-year.
"The increased demand for technologically superior solutions, coupled with the government's capital-expenditure focus on new-age themes, such as energy efficiency, decarbonisation and digitalisation, has significantly driven our order momentum," it said in a release.
Street View
Jefferies India Pvt. retains 'buy' rating on ABB and increased its target price to Rs 8,845 apiece from Rs 6,250, implying a potential upside of 27% from the previous close.
Jefferies expects order flows to pick up from the second half of 2024, with renewables area being a moderate growth area compared to a high growth area earlier. The brokerage also revised the company's earnings-per-share estimates for 2024, 2025 by 1–4%.
Motilal Oswal Financial Services Ltd. also maintains a 'buy' rating on ABB and also increased its target price to Rs 8,500 apiece from Rs 7,500 earlier, implying a potential upside of 18%.
ABB's numbers were much ahead of Motilal's estimates, driven by strong margin improvement. Margin growth was led by superior product mix, services revenue and exports, according to the brokerage.
Motilal expects further scope for margin improvement and has raised its margin estimates for 2024, 2025 and 2026 to 17.4%, 17.3% and 16.6% respectively. It also expects a compound annual growth rate of 30% for net profit 2023–26.
