ABB India Posts 87% Jump in Q1 Profit, Driven by Strong Demand

ABB India reports 87% surge in net profit to ₹460 crore for Q1 2024, driven by strong demand for its technologically superior solutions. Total orders and EBITDA also saw significant increases, with a robust order backlog of ₹8,932 crore.

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Aqsa Younas Rana
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ABB India Posts 87% Jump in Q1 Profit, Driven by Strong Demand

ABB India Posts 87% Jump in Q1 Profit, Driven by Strong Demand

ABB India, a global technology company, has reported a remarkable 87% surge in its net profit to ₹460 crore for the quarter ended March 2024, compared to ₹245 crore in the corresponding period last year. The company's revenues from operations also saw a significant 28% increase, rising to ₹3,080 crore from ₹2,411 crore in the year-ago period.

The impressive financial performance was driven by strong demand for ABB India's technologically superior solutions across its four business areas: Electrification, Motion, Process Automation, and Robotics & Discrete Automation. The share, price company's order backlog stood at a robust ₹8,932 crore, up from ₹7,170 crore in the January-March quarter of the previous year, providing revenue visibility and supporting growth plans for the coming quarters.

Why this matters: The growth of ABB India's innovative automation solutions has significant implications for India's economic development, particularly in sectors like energy efficiency, decarbonization, and digitalization. As the company continues to capitalize on opportunities arising from policy-driven public sector investments, it could have a ripple effect on the country's overall economic growth and competitiveness.

Total orders for ABB India surged to ₹3,607 crore, the highest for the first quarter in the last five years. EBITDA also witnessed a significant 98.1% increase to ₹565.2 crore in Q1 2024, compared to ₹285 crore in the corresponding period of the previous fiscal year. The company's cash position remains strong at ₹5,036 crore at the end of Q1 2024, up from ₹3,942 crore in Q1 2023.

The growth was primarily attributed to the increased demand for technologically advanced solutions and the government's focus on capital expenditure in new-age themes such as energy efficiency, decarbonization, and digitalization. In a statement, ABB India said, "We are pleased to announce a strong start to 2024, building on our robust performance from Q4 of 2023... Our team's relentless dedication to execution continues to be a pivotal factor in maintaining strong customer confidence and preference for ABB India's innovative and reliable solutions."

ABB India's stock has seen significant growth, with a 100% return over the last year and a 360% return over three years. The company's market capitalization currently stands at ₹152,195.77 crore. Analysts have mixed opinions on the stock, with 5 analysts giving it a strong buy rating, 3 analysts recommending a buy, 9 analysts suggesting a hold, and 6 analysts recommending a sell. The average broker rating on ABB India is a Hold.

Looking ahead, ABB India is well-positioned to capitalize on opportunities arising from higher capital expenditure in infrastructure, railways, renewables, power distribution, water, energy, commercial buildings, and metals. Policy-driven public sector investments in energy transition, FDI in steel and cement, and incentives for local production in areas like specialty steel and battery manufacturing are also expected to augment the company's growth prospects.

Key Takeaways

  • ABB India's net profit surges 87% to ₹460 crore in Q1 2024.
  • Revenues from operations increase 28% to ₹3,080 crore.
  • Order backlog stands at ₹8,932 crore, up from ₹7,170 crore last year.
  • EBITDA increases 98.1% to ₹565.2 crore in Q1 2024.
  • Company's cash position remains strong at ₹5,036 crore.