Fundamental Analysis – ABB India (ABB)

About the Stock:

ABB is a prominent international technology enterprise that drives societal and industrial transformation towards a more efficient, sustainable future. By integrating software with its electrification, robotics, automation, and motion offerings, ABB pioneers technological advancements to elevate performance. With a legacy spanning over 130 years, ABB’s achievements are propelled by approximately 105,000 skilled employees across 100+ nations.

Business Model:

ABB’s Electrification business offers a comprehensive range of products, digital solutions, and services for safe, smart, and sustainable electrification, spanning from substations to sockets.
The Motion business is the world’s largest supplier of drives and motors, providing customers with a complete suite of electrical motors, generators, drives, and services, alongside integrated digital powertrain solutions.
Process Automation delivers tailored solutions for process and hybrid industries, including specialized integrated automation, electrification, and digital solutions, control technologies, software, advanced services, as well as measurement & analytics, and marine offerings.
Robotics & Discrete Automation specializes in robotics, machine, and factory automation solutions, offering integrated automation solutions, industry-specific application expertise, and global presence, with a focus on innovation in artificial intelligence and digital partnerships.

Company Valuation
Sector	Engg & Capital Goods
NSE	ABB
BSE	500002
Market Capitalization	Rs 1,25,702 Crore (As of Mar 27, 2023)
Book Value Per Share	Rs 281
Face Value	Rs 2
P/E ratio	101.17
52 week H/L	Rs 6,021/ 3,143
Dividend Yield (%)	0.49

Shareholding Pattern
Particulars	Mar-23	Jun-23	Sept-23	Dec-23
Foreign Promoters %	75	75	75	75
Indian Promoters %	0	0	0	0
DIIs %	8.98	8.06	7.37	6.92
FIIs %	8.45	9.46	10.18	10.72
Others %	7.57	7.48	7.45	7.36

Ratios (Standalone)
Particulars	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
ROCE %	21.32	12.76	8.8	19.42	30.68
ROE %	13.42	8.06	6.15	13.92	22.83
ROA %	5.76	3.67	2.91	6.89	11.92
Interest Coverage Ratio	10.57	13.4	12.75	39.75	89.49
P/B	7.04	7.73	7.12	11.71	11.51

Balance Sheet (Standalone Figures in Rs. Crores.)
(Year-end March)	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Share Capital	42	42	42	42	42
Reserves	3,965	3,478	3,564	4,003	4,897
Borrowings	7	14	0	0	0
Other Liabilities	4,948	4,057	3,867	3,934	4,289
Total Liabilities	8,962	7,590	7,473	7,979	9,228
Fixed Assets	1,329	742	783	817	899
Capital WIP	83	59	75	77	69
Investments (Long Term)	0	0	0	0	0
Other Assets	7,550	6,789	6,616	7,085	8,260
Total Assets	8,962	7,590	7,473	7,979	9,228

Profit & Loss (Standalone Figures in Rs. Crores.)
(Year-end March)	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022	TTM
Sales	10,862	8,210	5,821	6,934	8,568	10,446
Other Income	97	123	120	209	234	302
Expenses	9,936	7,678	5,566	6,419	7,657	8,957
Operating Profit	1,023	655	376	724	1,144	1,792
OPM%	9	8	6	10	13	17
Interest	83	36	25	19	15	12
Depreciation	146	104	120	103	105	119
Profit Before Tax	794	446	289	724	1,363	1,659
Tax%	36	32	24	26	25	25
Net Profit	511	303	219	520	1,016	1,243
PATM%	5	4	4	7	12	12

Cash Flows (Standalone Figures in Rs. Crores.)
(Year-end March)	Dec 2018	Dec 2019	Dec 2020	Dec 2021	Dec 2022
Cash from Operating Activity	625	667	318	649	742
Cash from Investing Activity	144	-391	442	-2,008	1,826
Cash from Financing Activity	-794	-147	-152	-127	-140
Net Cash Flow	-25	129	608	-1,485	2,428

Q4 FY23 Result Update:

Total revenue for the company increased to Rs 2,757 crore in the current quarter, compared to Rs 2,427 crore in the same quarter last year.
In the fourth quarter, total orders rose by 35 percent to Rs 3,147 crore.
Throughout 2023, the company secured orders worth Rs 12,319 crore, marking a 23 percent increase over 2022.
The company’s Profit After Tax (PAT) for the entire fiscal stood at Rs 1,248 crore, up from Rs 1,026 crore in the previous financial year.
Revenues surged to Rs 10,447 crore for the entire fiscal, compared to Rs 8,568 crore a year ago.

Quarterly Results (Standalone Figures in Rs. Crores)
Particulars	Sep 2022	Dec 2022	Mar 2023	Jun 2023	Sep 2023	Dec 2023
Sales	2,120	2,427	2,411	2,509	2,769	2,757
Other Income	47	70	72	75	77	78
Expenses	1,909	2,063	2,126	2,160	2,331	2,340
Operating Profit	258	434	358	424	515	495
OPM%	12	18	15	17	19	18
Interest	2	7	2	1	1	8
Depreciation	27	27	27	29	30	33
Profit Before Tax	275	400	328	393	484	454
Tax%	26	24	25	25	25	24
Net Profit	198	305	245	296	363	339
PATM%	9	13	10	12	13	12

Conclusion:

In conclusion, ABB India presents a compelling investment opportunity backed by its strong fundamentals and strategic positioning in the market. With a diverse portfolio of innovative products and solutions, coupled with its commitment to sustainability and technological advancement, ABB India is well-poised for long-term growth and success. Investors can be confident in the company’s ability to navigate market dynamics and capitalize on emerging opportunities, making it an attractive prospect for those seeking to build a resilient and profitable investment portfolio.