• Order Growth: Orders increased by 11%, with a mix of large and base orders.
• Revenue: Up by over 5% due to execution of base orders.
• Profit Before Tax: Increased by 22% driven by revenue mix and margin capture.
• Order Backlog: Approximately INR 10,000 crore, with 25% large orders and 75% base orders.
• Cash Position: Strong cash position with inventory built up for backlog execution.
• Capital Expenditure: Cumulative CapEx of INR 125 crore for the last nine months.
• Electrification Orders: INR 1,776 crore in Q3, supported by data center and export orders.
• Motion Segment: Orders slightly above last year despite absence of large railway order.
• Process Automation: Delays in orders from the metric and oil & gas sectors, but strong pipeline.
• Robotics and Discrete Automation: Growth in select market segments like electronics and pharma.

• Warning! GuruFocus has detected 1 Warning Sign with BOM:500002.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ABB India Ltd (BOM:500002) reported an 11% increase in orders, indicating strong demand and a healthy order pipeline.
• The company's profit before taxes increased by 22%, driven by a favorable revenue mix and efficient order execution.
• ABB India Ltd has achieved significant milestones in sustainability, including CO2 compliance certification for its Nelamangala facility.
• The company has a strong export presence, serving over 30 countries, which diversifies its revenue streams.
• ABB India Ltd continues to see robust demand in high-growth segments such as data centers and renewable energy, contributing to a positive market outlook.

Negative Points

• The conversion rate of large orders may slow down due to their longer gestation periods, potentially impacting revenue growth.
• There is a noted softening in demand from heavy industries like steel and cement, which could affect future order inflows.
• The LT motor segment has faced pricing pressures and demand fluctuations, impacting its performance.
• Some large orders in process automation have been delayed due to decision-making processes, affecting short-term revenue visibility.
• The company faces competition in capacity expansion from both global and local players, which could pressure market share and pricing.

Q & A Highlights

Q: Can you provide insights into the pricing and demand trends for the LT motor segment, and any restocking activities post-elections? A: Sanjeev Arora, President of Motion Markets, noted that LT Motors faced pricing challenges, but the erosion has stopped. The demand cycle is expected to improve post-elections, with government investments likely to boost industry morale and stabilize prices.

Q: What is the outlook for process automation, given the decline in top-line performance? A: T. Sridhar, CFO, explained that the decline was due to delayed orders in the oil and gas and metals sectors. However, the opportunity pipeline remains strong, and the company expects these orders to materialize in upcoming quarters.

Q: How is ABB India managing pricing power amid capacity expansions and raw material cost changes? A: T. Sridhar stated that ABB India has adequate capacity to meet current demand and is continuously investing in expansion and modernization. Pricing is dynamic, influenced by demand-supply conditions, and the company manages it strategically across different product segments.

Q: Can you elaborate on the large deal pipeline and its impact on the order book? A: Sanjeev Sharma, Managing Director, highlighted that large deals are primarily in data centers and government projects, with high value-added content. The pipeline is robust, and ABB India is seeing consistent conversion of these deals into orders.

Q: What is the outlook for the Power Process Automation segment, particularly in oil and gas? A: Sanjeev Sharma mentioned that the segment continues to see strong order intake from oil and gas, refineries, and petrochemicals. The company focuses on risk-mitigated projects and expects steady growth in this area, with some export opportunities in the Middle East and Africa.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.