In This Article:
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Revenue Growth: Expanded by 22% in Q4 2024 and 17% for the full year.
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Profit After Tax: Increased by 54% for the quarter.
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Order Backlog: INR 9,400 crore, 12% higher year-on-year.
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Operational EBITDA: Expanded by 56%.
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Earnings Per Share: Expanded by 50%.
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Cash Balance: INR 5,390 crore, with a 14% increase.
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Return on Capital Employed: 26.5%.
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Material Cost: Stood at 58%, reflecting favorable conditions.
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Base Orders: INR 2,654 crore, 4% higher compared to Q4 2023.
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Dividend: Final dividend approved, 51% higher year-on-year.
Release Date: February 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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ABB India Ltd (BOM:500002) reported a robust 23% growth from 2022 to 2023, with a 6% growth in the last year alone.
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Revenue expanded by 17% on top of a previous year's growth of 22%, indicating strong financial performance.
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Profit before tax (PBT) margin expanded by 51%, and earnings per share increased by 50%, showcasing improved profitability.
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The company has reduced its greenhouse gas emission intensity year on year, reflecting a strong commitment to sustainability.
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ABB India Ltd (BOM:500002) has a strong order backlog of INR 9,400 crore, which is 12% higher than the previous year, providing good visibility for future execution.
Negative Points
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Total orders for the quarter were down by 14%, attributed to the absence of a large INR 600 crore order from the previous year.
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The electrification division saw a sharp decline in orders compared to the previous quarter, raising concerns about sustainability in order intake.
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There is a potential risk of increased competition from Chinese players, particularly in certain segments.
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The conversion of profits to free cash flow has decreased, indicating changing working capital needs.
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There is a concern about the potential slowdown in private sector capital expenditure and government investments, which could impact future growth.
Q & A Highlights
Q: The order backlog growth has slowed to 12%. Is this a concern, and do you foresee a slowdown in private sector CapEx or government investments? A: Sanjeev Sharma, Country Managing Director, stated that the slowdown is transient. Factors like elections, infrastructure spending impacts, and strong rains contributed to this. However, ABB India remains optimistic about future growth cycles, supported by policy frameworks and planned investments.
Q: Exports account for only 10% of the business mix. What is the roadmap for increasing exports over the next three to five years? A: Sanjeev Sharma explained that while exports are not a primary focus, ABB India's operations are world-class, offering productivity and labor arbitrage advantages. The company is export-ready, and global divisions will decide on expansion based on market needs.