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ABB India Limited — Q2 FY24
ABB India delivered a strong Q2 CY2024 with 13% YoY revenue growth to INR 2,800 crore and order inflow up 13% to INR 3,400 crore.
bullish
high
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ABB India delivered a strong Q2 CY2024 with 13% YoY revenue growth to INR 2,800 crore and order inflow up 13% to INR 3,400 crore. EBITDA margin expanded to 19%, while PBT margin reached 21%, aided by favorable revenue mix, operational efficiencies, and stable commodity costs. The order backlog grew 23% YoY to INR 9,500 crore, providing good revenue visibility. Management highlighted broad-based demand across segments, with particular strength in data centers, railways, and energy transition. Exports grew 39% YoY. Guidance remains positive, with expectations of sustained momentum driven by India's capex cycle and localization efforts. Key risk: potential normalization of margin tailwinds from commodity price stability and order book pricing advantages.
एबीबी इंडिया ने 2024 की दूसरी तिमाही में अच्छा प्रदर्शन किया। कंपनी की कमाई पिछले साल की तुलना में 13% बढ़कर 2,800 करोड़ रुपये हो गई। नए ऑर्डर भी 13% बढ़कर 3,400 करोड़ रुपये पर पहुंच गए। कंपनी का मुनाफा (EBITDA) 19% और कर-पूर्व मुनाफा (PBT) 21% रहा, जो अच्छे उत्पाद मिश्रण, कुशल संचालन और स्थिर कच्चे माल की कीमतों की वजह से संभव हुआ। बकाया ऑर्डर 23% बढ़कर 9,500 करोड़ रुपये हो गए, जिससे भविष्य की कमाई सुनिश्चित हुई। डेटा सेंटर, रेलवे और ऊर्जा क्षेत्रों में मांग मजबूत रही। निर्यात 39% बढ़ा। कंपनी को भारत के निवेश चक्र से अच्छी उम्मीदें हैं। जोखिम: कच्चे माल की कीमतों और ऑर्डर कीमतों से मिलने वाला फायदा कम हो सकता है।
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Base order weakness in H1
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Order Inflow
INR 3,400 crore
+13% YoY
Strong order intake driven by large orders from emerging sectors like data centers and railways.
Order Backlog
INR 9,500 crore
+23% YoY
Record backlog provides strong revenue visibility; 40-45% are long-cycle projects.
Export Orders Growth
39%
+39% YoY
Exports grew significantly, led by specialty chemical service orders from an energy major.
IE3/IE4 Motor Production Share
52-53%
N/A
Over half of motor production is high-efficiency IE3/IE4, ahead of regulatory minimums.
What Changed vs Last Quarter
NEW
Sustained double-digit growth trajectory
Management expects continued strong demand across segments, supported by India's capex cycle and government stability post-elections.
NEW
Capacity expansion in Bangalore for process automation and motion
A new plant in Bangalore will expand capacity for process automation and motion businesses, with incremental expansions across other locations.
NEW
Margin tailwinds from commodity stability to thin
CFO indicated that benefits from stable/falling commodity costs between order booking and execution will reduce going forward.
DROPPED
Sustain 12%+ profitability
Management aims to maintain PBIT margin at or above 12% for FY2024, with efforts to improve further.
DROPPED
Continued capacity expansion
ABB plans to invest INR 180-200 crore annually in capacity expansion across electrification, motion, and process automation.
DROPPED
Data center orders to accelerate
Data center opportunity is accelerating with increasing project sizes and repeat orders from global majors.
NEW RISK
Base order weakness in H1
Base orders were flat in Q2, impacted by election and budget-related delays; recovery depends on post-election momentum.
NEW RISK
Margin normalization from commodity tailwinds
CFO noted that the advantage from stable commodity prices and order book pricing will thin, potentially compressing margins.
NEW RISK
Execution delays due to project schedules
Revenue was INR 200 crore lower than potential due to alignment with customer project schedules and election-related delays.
NEW RISK
Competitive pressure in electrification and motion
While ABB enjoys pricing power, competitors may catch up as the market matures, pressuring margins.
RISK GONE
Margin compression from backlog normalization
As high-priced backlog is executed, new orders at current lower commodity prices may pressure margins.
RISK GONE
Motion segment order slowdown
Motion orders were flattish due to postponement of some system orders; recovery expected in Q2.
RISK GONE
Competitive intensity in standard products
Analyst raised concern about pricing pressure in standard drives; management acknowledged but emphasized premiumization trend.
Fast read
Guidance and risk preview
Management expects continued strong demand across segments, supported by India's capex cycle and government stability post-elections.
Base orders were flat in Q2, impacted by election and budget-related delays; recovery depends on post-election momentum.
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