ABB India share price jumps over 8% to touch 52-week high following strong March quarter results. Is it time to buy?

Its consolidated revenues climbed to ₹3,080 crore during the quarter under review, up from ₹2,411 crore the previous year, it said. The electrification and automation major’s fiscal year runs from January to December.

ABB India share price opened at ₹7,555 apiece on the BSE, the stock touched an intraday high at ₹7,792.40, and an intraday low of ₹7,408.90. 

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According to Rajesh Bhosale, an Equity Technical and Derivative Analyst at Angel One, the stock is in a strong uptrend and is continuously moving higher despite broad-based selling in the market. Today as well, we are seeing a 7% up surge. We maintain a positive bias, but buying on dips would be preferred. ₹7,000–7,200 is a support zone, whereas ₹8,000 is a possible next resistance.

The business claimed in an exchange filing that it is glad to report a great start to 2024, building on its outstanding performance in Q4 of 2023. The rising demand for technologically better solutions, along with the government’s capital spending focus on new-age issues like energy efficiency, decarbonisation, and digitalisation, has greatly accelerated our order momentum.

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Total orders rose to ₹3,607 crore, the most for the first quarter in the past five years. Order growth demonstrates their multi-division portfolio’s ability in capturing diverse market cycles. The Electrification and Process Automation business sectors drove quarterly growth, more than offsetting temporary client decision sluggishness in Motion and Robotics and Discrete Automation.

In its research, brokerage Motilal Oswal Financial Services said that ABB’s margins had surprised pleasantly across sectors due to the sustained benefit of multiple levers. The EBITDA margin for 1QCY24 was 18.3% (+650bp YoY), far ahead of expectations. This margin outperformance is underpinned by operating leverage on increasing volumes, flawless execution of cost management programs, positive price effect to pass on inflation and cost increases, a larger proportion of service and export revenues, and stable currency and commodity prices.

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“We expect a large part of these gains to sustain in the coming years amid a strong demand scenario. We increase our estimates for CY24/25/26 by 23%/24%/20% to bake in 1QCY24 performance and higher margins. We increase our TP to ₹8,500 (from ₹7,500), implying a P/E of 70x on Jun’26E EPS. We maintain BUY and ABB remains our top pick in the sector,” the brokerage said in its report. 

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 13 May 2024, 10:52 AM IST