ABB India Ltd. share price target

Operational performance below expectations: ABB's 2QCY16 revenues of INR21b (+8.8% YoY) came in line with our estimates, while EBIDTA margin of 8.1% (flat YoY) missed our estimate of 10.6%. Revenue growth in the quarter was driven by exports (16-17% of revenues), timely execution of short-cycle orders and an improvement in service income. Operating profit of INR1.7b was substantially below our estimate of INR2.2b (in line with consensus of INR1.7b) on the back of higher-than-estimated raw material costs (65.4% of sales v/s estimate of 64.2%). PAT of INR774m was below our estimate of INR924m (in...

9 ABB's recurring PAT at Rs 766mn (+41% yoy) was marginally below our estimate as benefits of higherexecutionandgrossmarginexpansionweretakenawaybyhigherotherexpenditure. 9 Revenuegrowthat10%yoywasledbygrowthinshortcycleproductsegments(54%ofsales)....

Key highlights: Power system revenue (2% of revenue) declined 19% yoy to Rs 5.2bn and power productsrevenue(32%)grew18%yoytoRs7.7bn.Higherindigenisationledto340bpsexpansionin powerproductsmarginsto12%(highestin24quarters);powersystemsreported600bpsexpansionto...

Order Inflows Momentum Improves Revenue Visibility: ABB India order inflows momentum is gaining pace and is better than our earlier estimates improving revenue visibility going forward. We are revising our order backlog, revenues and EBITDA margin upwards to Rs.84,190mn / Rs.93,669mn / Rs.1,08,732mn, Rs.80,362mn / Rs.90,850mn / Rs.103010mn and 8.3% / 8.6% / 9.0% for FY15E/FY16E/FY17E.

reallocation of expenses could partially explain the margin expansion in ABB's Power Products (450bpsyoy)andDiscreteAutomation(220bpsyoy)segments. 9 New orders grew 60% yoy to Rs23bn as ABB received orders that were deferred in 1HCY15....

Order inflow for ABB India is expected to improve by 12.1% during CY14-16E with flows from automation segment is estimated to grow at a CAGR of 14% and power segment inflow to remain relatively weak at 10.5% compared to automation segment during CY14-16E. The improvement in the order inflow visibility is primarily driven by new and restructuring of Transmission and Distribution (T&D) systems, renewable energy push, recovery in industrial CapEx cycle, transportation infrastructure and urban infrastructure like Smart Cities project.

Rs 19bn due to a subdued macro environment. Management highlighted that although industrial capex is likely to be delayed by at least 1218 months due to lower utilization acrosssteel,cement,etc.,railwayandrenewablessectorwillcontinuetoseerobustgrowth...

ABB India's PAT was lower than our estimates drivenby lower margins in powerproducts segment and deferment of revenues of Rs1.5bn. Orders inflow was down 6% YoY to Rs 17.8bnduetodelayinbookingofafewexportorderswhereABBIndiaisL1.Management...