Buy This Infrastructure Stock For Gains Up To 18% In 12-18 Months: ICICI Direct
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1. ABB India Ltd Stock Outlook
The current market price of the stock is Rs 2796 apiece with a 52-week high of Rs 2851 apiece and 52-week low of Rs 1619 apiece. As per the brokerage house report, if investors buy the stock at its current market price, it can reach the potential target price of Rs 3275 apiece with a likely gain of 18% in 1 to 1 and half year.
2. ABB India Ltd Q2CY22 Results
ABB reported another strong quarter with Q2CY22* results. Revenue at Rs 2052.5 crore, grew 44% YoY, owing to better execution and value-added volume mix. EBITDA came in at Rs 198.9 crore with margins of 9.7%. Margin growth was supported by quality execution. Hence, PAT came in at Rs 147.1 crore, up 109.3% YoY. Order inflows for Q2CY22 came pretty strong at approximately Rs 2767 crore, up 64% YoY.
3. ABB India Ltd Valuation
According to ICICI Direct, “Overall, further penetration of automation & digitisation products and services across segments to drive long term growth. We remain long term positive and retain our BUY rating on the stock. We value ABB at Rs 3275 (75x on CY23E EPS).
4. Key Triggers For Future Performance
It expects operating margins to improve with increase in capacity utilisation, change in revenue mix, cost optimisation programmes and localization. ABB continues to see recovery in certain segments and industries like datacentre, renewables, electronics, food & beverages and pharma. It continues to focus on order win and seamless execution across projects. Expect revenue, EBITDA to grow at CAGR of ~25.2%, 41.8%, respectively, in CY21E-23E due to strong traction in short cycle products and services.
5. About ABB India Ltd
ABB India (ABB) is a leader in technology solutions connecting software to its electrification, robotics, automation and motion portfolio. It operates in mainly three key segments including robotics & motion (41%), electrification (38%), industrial/ process automation (22%). Well placed to gain from the overall energy market transformation from electrification to automation & digitization.
