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
Financial stats pending filing verification
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
64%Questions answered2Evaded / deflected11Questions auditedContradictedNumbers vs filing
Partial answer
High priority
Are inquiry levels increasing post-election for base orders?
Asked by Mohit Kumar, ICICI Securities
Management acknowledged slowdown but gave qualitative outlook without quantifying inquiry levels.
deferred to multiple business headsno specific numbers on inquiry levels
Read the exchange
Question
My first question on base orders, sir. Of course, base order has been slightly weaker in the first half. Are you seeing increasing inquiry levels going up post the election?
Sanjeev Arora (Head of Motion Division), Subrata Karmakar (Head of Robotics), Kiran Dutt (Electrification Business), Ganesh Kothawade (Electrification Distribution Solutions)
So I think, Sanjeev here, we did have this election as well as budget period coming, so I think there was a bit of a slowdown in the marketplace. But going forward, I think we can give you a more granular view from our business heads...
Evasive
Medium priority
Is ABB India gaining market share from group companies for Indian orders?
Asked by Mohit Kumar, ICICI Securities
Management avoided answering whether market share is increasing, stating no correlation is tracked.
no correlation establisheddismissed the premise
Read the exchange
Question
My question on the order inflow for us versus the group. Our number is 13% up, right? Compared to the group's for Indian orders were 3.2% up, right? My question is: Is the market share increasing as we are getting more orders from the global export orders, because we're producing more products indigenously?
Sanjeev Sharma (Managing Director)
So I think we haven't established any correlation, and we don't pay too much attention to that, because that's more of a flow which happens based on how the group companies and the global players may be exposed, right?
Partial answer
High priority
Why is ABB India EBITDA margin higher than parent? Is it sustainable?
Asked by Sumit Kishore, Axis Capital
Management explained reasons for margin improvement but did not explicitly comment on sustainability relative to parent.
did not directly address sustainabilityattributed to multiple factors without quantification
Read the exchange
Question
Over the last five years, the EBITDA margins reported by the MNC parent were higher than ABB India. Over the last couple of quarters, and particularly Q2, ABB India EBITDA margin was higher than the parent. Your comments on, you know, the sustainability of this phenomenon, given ABB India pays royalty technology fee to the parent, and there are imports that ABB India does from the parent.
Sanjeev Sharma (Managing Director)
So I think both are not comparable because group is exposed to all markets of the world... As far as India story is concerned, as you say, it's an India story... It's a sum total of number of things that converge...
Answered
High priority
What is the mix of base vs large orders in order book and execution schedule?
Asked by Sumit Kishore, Axis Capital
Management provided specific percentages and execution timelines for order backlog mix.
Read the exchange
Question
Could you give us a sense on how is the mix of base orders and large orders in the order book roughly? And what is your sense on sort of what kind of execution schedule does it entail across base and large orders in your four reportable segments?
T.K. Sridhar (CFO)
I said that the order backlog, which is roughly around about INR 9,500 crores today, has 40%-45% of Long Cycle and project orders... And the balance, 55%-60% is Short Cycle Orders, and that go over an execution period of 6-9 months roughly, right?
Declined
High priority
Which products have superior pricing power? Can you explain sales mix?
Asked by Jonas Bhutta, Birla Mutual Fund
Management explicitly declined to provide product-level details, citing confidentiality.
refused to share detailscited 'secret sauce'
Read the exchange
Question
If you can sort of talk about, you know, on which products particularly are seeing such a superior pricing power? ... I would appreciate if you can give a slightly more nuanced understanding to the extent possible on the sales mix.
T.K. Sridhar (CFO)
So, Jonas, I think, to maintain the profitability and the performance of the company, it is important that we have the secret sauce with us, number one, okay? So we cannot be diversifying.
Answered
Medium priority
What percentage of motor sales are IE3/IE4?
Asked by Jonas Bhutta, Birla Mutual Fund
Management provided a specific percentage for IE3/IE4 motor production share.
Read the exchange
Question
What % of our motor sales largely comes from these two product lines, given that we are further expanding our offerings here? You know, even a rough cut, ballpark number would help.
Sanjeev Arora (Head of Motion Division)
More than half of our production, that means roughly 52%-53% of our production is of IE3, IE4 motors.
Partial answer
Medium priority
Which areas will see maximum capacity creation in next 3-5 years?
Asked by Amit Mahawar, UBS
Management gave qualitative examples but did not quantify capacity expansion plans by segment.
no specific quantification of capacity expansion by segment
Read the exchange
Question
Next 3-5 years, when we plan our capacity creation, which are the areas where we will see, you know, maximum capacity creation, you can highlight?
Sanjeev Sharma (Managing Director)
We are already looking at forward for next 5 to 10 years, and there, there are certain divisions who want this, capacity expansion. So you may have seen some announcement that we did yesterday, wherein we are adding a plant here in Bangalore...
Answered
Medium priority
Any changes under new ABB Group CEO?
Asked by Amit Mahawar, UBS
Management clearly stated the new CEO's mandate for growth while maintaining profitability.
Read the exchange
Question
Anything that you want to highlight in terms of the way ABB operates is very different from peers... new management, message from the new management, which is worth sharing here?
Sanjeev Sharma (Managing Director)
Morten Wierod, who is now has taken over as CEO from first of August... he has a mandate for growth. So he has been given a mandate that the growth is the focus for him while maintaining the profitability that Group has achieved.
Answered
High priority
What percentage of backlog is fixed price vs price variation?
Asked by Shrinidhi Karlekar, HSBC
Management provided specific percentages for fixed price vs price variation contracts.
Read the exchange
Question
What percentage of your backlog is really a fixed price contract, and how much has a price variation?
T.K. Sridhar (CFO)
Long cycle orders are definitely, I'd say 40%-45% of the backlog comes from projects and long cycle orders, which as a protection mechanism have the price variation clauses built in... But when it comes to the balance, 45%-50% of orders, which comes from short cycle orders... majority of them are fixed price contracts.
Answered
High priority
Is margin benefit partly due to commodity stability from order booking to execution?
Asked by Shrinidhi Karlekar, HSBC
Management confirmed the advantage and noted it will diminish as prices stabilize.
Read the exchange
Question
Would you say the part of positive surprise you saw in the material margin, is due to commodity stability or commodity deflation from the point of order booking to the point of execution of sales?
T.K. Sridhar (CFO)
I think the current margin expansions also give advantage of price on, you know, higher price at which we book the orders because of the time the material prices are higher... But I think now that the prices are stabilizing at this point of time... that particular difference... will start to thin down going forward.
Partial answer
Medium priority
Will motion segment have higher margins than electrification long-term?
Asked by Aditya Mongia, Kotak Securities
Management avoided a direct comparison of long-term margins between segments.
did not directly compare margin potentialgave general industry commentary
Read the exchange
Question
Eventually when things kind of even out on margins, would motion segment, because of its value addition, higher services component, energy efficiency, be having higher margins versus the switchgear-driven electrification segment, or would you have a different view?
Sanjeev Sharma (Managing Director)
We have a different view. Both motion and electrification are nearly same size... They follow the pattern of a fast-moving industrial goods pattern... I would say this is a early size cycle of India...
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| 27% CAGR growth in last three years | 27% | 13% | Overstated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.