ABB Limited was incorporated on 24th December 1949, at Mumbai. Company was involved mainly into manufacturing of transformers, electric motors, all-aluminium conductors, furnaces, extra H. T. air blast circuit breakers, panels and switchboards. Company's parent ABB group, have more than 1000 companies, has operations in more than 100 countries and is involved in power generation, transmission and distribution (T&D), industrial equipments and systems, and factory automation. Company started Project for the manufacturing of industrial steam turbines with Gujarat Industrial Investment Corporation Ltd. with Government approving the collaboration agreement with AG Kunhle, Kopp & Kausch, West Germany. Company set up "Integra Hindustan Control Ltd." for the manufacture of relay and signalling equipment for the Railways using technology of Integra Ltd., Zurich, Switzerland.

This project was set up at Halol in Panchmahan district of Gujarat State. Company also established National switchgears Limited, jointly with Pradeshiya Industrial and Investment Corporation of U. P. Ltd. Company formed a JV with Danish Windpower A/s, Denmark for the manufacture of wind energy conversion systems. Company also set up a factory at Mysore in Karnataka State for the manufacture of various electronics products including EPABX exchanges. Company introduced broad range of transformers, wiring accessories including switches, regulators and sockets for Indian market.

Products & Services:

Company is a leader in power and automation technologies in India that enable utility and industry customers to improve performance while lowering environmental impact. Company has 8 manufacturing units, 4 service centers, 25 marketing offices and 3 training centers in its list. Company also employs more than 3200 employees in India. ABB India serves utility and industry customers with the complete range of power, automation and industrial solutions. Company has a vast installed base, extensive local manufacturing at 8 units and a countrywide marketing and service presence. ABB has a national channel partner network, for the purpose of geographical reach and penetration of its products and services.

In order to leverage India's intrinsic technology strengths and the vast pool of highly qualified software professionals, ABB has set up a global R&D Centre in Bangalore, which focuses on Industrial IT development and deployment. It also helps maintain and support a range of software intensive products and acts as a partner for the ABB R&D centers as well as business areas within the group. Company is involved into manufacturing of control systems, Medium Voltage products, Force measurements, High voltage products (50 KV), industry solutions, instrumentation and analytical, Low voltage Products
(<1KV), Medium voltage products (1-50KV), motors, drives and power electronics, Power semiconductors, Robotics, Services, Transformers, Turbo-charging and industry Specific products.

The main areas for which company provides its services are:

Power Products: Power Products division incorporates ABB's manufacturing network for transformers, switchgear, circuit breakers, cables and associated equipment. It also offers all the services needed to ensure products' performance and extend their lifespan. The division is subdivided into three business units.

Power Systems: Power Systems offers turnkey systems and services for power transmission and distribution grids, and for power plants. Substations and substation automation systems are key areas. Additional highlights include flexible alternating current transmission systems (FACTS), high-voltage direct current (HVDC) systems and network management systems. In power generation, Power Systems offers the instrumentation, control and electrification of power plants. The division is subdivided into four business units.

Automation Products: This business serves customers with energy efficient and reliable products to improve customers' productivity, including drives, motors and generators, low voltage products, instrumentation and analytical, and power electronics. More than one million products are shipped daily to end customers and channel partners, spanning a wide range of industry and utility operations, plus commercial and residential buildings.

Process Automation: The main focus of this business is to provide customers with integrated solutions for control, plant optimization, and industry-specific application knowledge. The industries served include oil and gas, power, chemicals and pharmaceuticals, pulp and paper, metals and minerals, marine and turbo charging.

Robotics: company has the world's largest installed base of industrial robots. Company also provides robot software, peripheral equipment and modular manufacturing cells for tasks such as assembly, painting and finishing, and machine tending. Key markets include automotive, foundry, packaging, material handling and consumer industries.

Recent developments:

In July, ABB has won orders worth Rs 14.10 billion from Maharashtra State Electricity Transmission Company (MSETCL) for substations to help improve the efficiency and reliability of the state's network. The 220kv and 132kV substations will be located in the Nashik, Amravati and Nagpur zones of the western Indian state of Maharashtra, and are an integral part of MSETCL's efforts to reduce transmission and distribution losses. The project is scheduled for completion in
2010.

In august, ABB has won Rs 1,283 million order from Power Grid corporation of India
(PGCIL), for a 400-kV gas insulated switchgear (GIS) substation to strengthen the power transmission network in the country's western grid. The substation will be located in Navsari, in the western Indian state of Gujarat. ABB will be responsible for the system design and engineering, civil works, supply, installation and commissioning. Major products included in the order are 400-kV and 220-kV gas insulated switchgear, transformers as well as control and relay panels. The project is scheduled for completion in 2011.

In December, ABB has won Rs 5.06 billion order from Bangalore Metro Rail Corporation
(BMRCL) to provide power solutions for a planned metro network in Bangalore, India's leading technology hub. It is a turnkey project for the first phase of the Bangalore mass rapid transport system (MRTS), which comprises two main lines covering 42 km of distance, about one-fifth of it underground, and serving 41 stations. ABB will design, supply, install and commission four substations that receive and distribute electricity, each rated at 66/33 kilovolts, as well as the auxiliary and traction substations.

Valuation:

At current market price, stock is trading at 26.5 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy "ABB Limited" with medium to long-term investment horizon.