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QCO compliance costs and margin pressure
View Risks →ABB India Limited — Q1 FY26
ABB India reported a mixed Q2 CY2025 with revenue of ₹3,317.5 crore (+12% YoY), driven by strong execution and a record order backlog of ₹10,764 crore.
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ABB India reported a mixed Q2 CY2025 with revenue of ₹3,317.5 crore (+12% YoY), driven by strong execution and a record order backlog of ₹10,764 crore. However, profitability was impacted by one-offs: a ₹39.5 crore provision in electrification and ₹56.5 crore forex loss, compressing margins. Base orders grew 5% YoY, but large orders remained absent due to delayed private capex and cautious investment sentiment. Management described the quarter as a temporary breather, with a cautiously optimistic outlook for H2, expecting a gradual recovery in large projects. Key risks include sustained QCO compliance costs, Chinese competition in process automation, and forex volatility. The interim dividend of ₹9.77 per share was declared.
एबीबी इंडिया ने 2025 की दूसरी तिमाही में मिला-जुला प्रदर्शन किया। कंपनी की कमाई ₹3,317.5 करोड़ रही, जो पिछले साल से 12% ज्यादा है। इसकी वजह अच्छा काम और ₹10,764 करोड़ का रिकॉर्ड ऑर्डर बैकलॉग (बकाया ऑर्डर) है। लेकिन मुनाफा कम हुआ क्योंकि एक बार के खर्चे जैसे इलेक्ट्रिफिकेशन में ₹39.5 करोड़ का प्रावधान (अनुमानित खर्च) और ₹56.5 करोड़ का विदेशी मुद्रा घाटा (फॉरेक्स लॉस) लगा। छोटे ऑर्डर 5% बढ़े, लेकिन बड़े ऑर्डर नहीं आए क्योंकि कंपनियां निवेश में सावधानी बरत रही हैं। प्रबंधन का कहना है कि यह अस्थायी रुकावट है और साल की दूसरी छमाही में धीरे-धीरे सुधार की उम्मीद है। जोखिमों में QCO नियमों की लागत, चीनी प्रतिस्पर्धा और मुद्रा में उतार-चढ़ाव शामिल हैं। कंपनी ने ₹9.77 प्रति शेयर अंतरिम लाभांश (मुनाफे का हिस्सा) घोषित किया।
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Read Transcript →Quarter Snapshot
Order Backlog
₹10,764 crore
+5% YoY
Record high order backlog, providing visibility over 18-24 months.
Base Orders Growth
5%
+5% YoY
Base orders grew 5% YoY, excluding large orders, indicating steady demand.
Cash Balance
₹5,504 crore
flat
Strong cash position despite ₹700 crore dividend payout in May.
Interim Dividend
₹9.77 per share
flat
Consistent with last two years' interim dividend policy.
What Changed vs Last Quarter
NEW
QCO compliance to impact margins near-term
Management expects continued mix of imported and localized content over next 6 months to meet QCO deadlines, pressuring margins.
NEW
Large order pipeline conversion expected in H2
Management sees reasonable pipeline of large projects, expecting conversion in Q3/Q4 CY2025.
NEW
Margin band of 12-15% remains target
Management reiterated the 12-15% PAT margin band as a directional target, but noted near-term headwinds from QCO and forex.
DROPPED
Double-digit revenue growth target
Management targets double-digit revenue growth for CY2026, supported by strong order backlog and improving market conditions.
DROPPED
PBT margin corridor of 12-15%
PBT margin expected to remain in the 12-15% range, with near-term headwinds from QCO-related material costs and forex.
DROPPED
QCO imported stock to normalize in 2 quarters
Higher material costs from strategic QCO-related imports will normalize over the next two quarters as inventory is consumed.
NEW RISK
QCO compliance costs and margin pressure
QCO guidelines require imported content to meet delivery commitments, increasing costs and pressuring margins for next few quarters.
NEW RISK
Chinese competition in process automation
Analyst raised concern about Chinese imports; management confirmed participation in heavy equipment segments with unrealistic pricing, leading to lost orders.
NEW RISK
Delayed private capex recovery
Large order decisions postponed due to global uncertainty; management expects recovery only by next year.
RISK GONE
Delayed decision-making on large orders
Process automation orders have been delayed in prior quarters; while Q4 saw conversion, sustainability of momentum remains uncertain.
RISK GONE
Chinese competition in large projects
Some customers may prefer Chinese equipment for large projects, though impact has been limited so far.
RISK GONE
QCO implementation timelines
Government has extended timelines for QCO phase 2 due to lab availability, creating uncertainty in compliance costs.
Fast read
Guidance and risk preview
Management expects continued mix of imported and localized content over next 6 months to meet QCO deadlines, pressuring margins.
QCO guidelines require imported content to meet delivery commitments, increasing costs and pressuring margins for next few quarters.
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