In a measured but resolute appraisal, Prabhudas Lilladher has reaffirmed its ‘Buy’ rating on ABB India with a revised target price of Rs 6,851, slightly trimmed from Rs 6,955 earlier. Despite execution delays in the Process Automation segment, ABB posted a modest 2.6% YoY revenue growth and maintained strong margins. The brokerage continues to view ABB India as a premium play on energy efficiency, digitization, and infrastructure modernization, with tailwinds from data centers, renewables, and metro rail segments.

Q1CY25 Snapshot: Solid Execution Across Core Divisions

Revenue growth came in at 2.6% YoY to Rs31.6 billion, led by healthy execution in Robotics, Electrification, and Motion, while Process Automation underperformed due to delivery rescheduling.

Electrification revenue rose 4.7% YoY to Rs13.6 billion, supported by premium product demand and favorable pricing.

Motion grew 8.2% YoY to Rs11.0 billion, aided by traction orders from Indian Railways and higher service share.

Robotics posted a 37.0% YoY surge to Rs1.5 billion.

Conversely, Process Automation declined 19.3% YoY to Rs5.9 billion amid macroeconomic caution.

EBITDA stood at Rs5.8 billion, up 3.0% YoY, with margins flat at 18.4%, bolstered by a 146bps YoY expansion in gross margin to 41.7%.

Order Book Signals Momentum Ahead

Order inflows grew by 4.0% YoY to Rs37.5 billion in Q1CY25, with base orders rising 10% YoY to Rs35.5 billion.

The order book remains strong at Rs99.6 billion, equivalent to 0.8x TTM revenue.

Base-to-large order intake mix has shifted to 95% base and 5% large orders, indicating structural growth from recurring business.
The electrification segment alone brought in Rs17.6 billion in orders, albeit slightly lower YoY due to a one-time large data center order last year.

Strategic Developments and Product Innovation

ABB’s commitment to innovation was visible with the launch of:

LIORA modular switches tailored for commercial and residential usage.

Flameproof low-voltage motors in higher frame sizes, enhancing safety and energy efficiency.

These innovations reflect ABB’s expansionary footprint in Tier-2 and Tier-3 cities, bolstered by channel diversification across direct, EPC, OEM, and partner-led sales.

Financial Metrics and Valuation Outlook

Q1CY25 PAT grew 3.2% YoY to Rs4.7 billion.

EPS was reported at Rs22.4 for the quarter.

For CY25E, ABB is expected to clock in Rs1,38,290 million in revenue, with a PAT of Rs20,128 million.

Valuations remain rich, with CY25E P/E at 58.8x and CY26E at 51.4x, justified by its high-quality execution, strong return ratios, and focus on secular growth areas.

Segmental EBIT Performance Highlights

Each of ABB’s business segments revealed a distinctive operational narrative this quarter:

The electrification segment alone brought in Rs17.6 billion in orders, albeit slightly lower YoY due to a one-time large data center order last year.

Segmental EBIT Performance Highlights

Each of ABB’s business segments revealed a distinctive operational narrative this quarter:

Key Catalysts: Electrification, Data Centers, and Green Mobility

ABB’s forward-looking commentary underscores confidence in high-growth sectors:

Electrification is expected to benefit from smart infrastructure and real estate upgrades.

Motion is seeing traction from Indian Railways, especially in propulsion systems and high-performance motors.

ABB’s increasing involvement in data centers, renewables, and electronics manufacturing aligns with India’s energy transition agenda.

Final Verdict: ABB Remains a Premium Play with Strategic Edge

With strong order visibility, margin resilience, and targeted innovation, ABB India continues to offer long-term upside. Prabhudas Lilladher’s revised target of Rs6,851 implies a potential upside from the current levels around Rs5,587. While short-term process automation hiccups exist, the underlying demand, product depth, and execution strength justify its rich valuation.