The Hindu Business Line : ABB India plans stock split, posts 54% rise in net profit

The Chairman of ABB India, Mr Dinesh Paliwal, flanked by the Vice-Chairman and Managing Director, Mr Ravi Uppal (left), and the Chief Finance Officer, Mr K. Rajagopal at a press conference in Bangalore on Thursday. - V. Sreenivasa Murthy

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Bangalore Feb. 16 ABB India on Friday announced that it proposes to split its stock of Rs 10 each into five units of Rs 2 to make it affordable for small investors.

The power and automation technology company also declared 100 per cent dividend for the year on each share of Rs 10. The decision is subject to shareholder approval.

The ABB stock closed at Rs 3,800.95 on Thursday (the BSE remained closed on Friday for Mahashivaratri).

Revenue up

Speaking to newspersons after the board meeting, Mr Ravi Uppal, Vice-Chairman and Managing Director, said that net profit rose 54 per cent while revenue grew 44 per cent during the full year ended December 2006.

He also said that the company proposes to invest Rs 250 crore over 2-3 years for capacity increase and to set up four new facilities in Karnataka. ABB had fully deployed its earlier investment of $100 million.

According to Mr Uppal, buoyant economic growth helped push net profit to Rs 340.3 crore (Rs 218.7 crore) on revenue of Rs 4,347.7 crore (Rs 3,014.1 crore).

He said that the rising interest rates would not affect future orders from customers as the growing demand for its products in the face of strong industrial growth should minimise the impact.

The order book swelled by 50 per cent during the 2006 fiscal to Rs 5,623.6 crore (Rs 3,764.5 crore).

"I do not see any slowdown in demand due to the recent interest rate hike."

Mr Dinesh Paliwal, Chairman and President (Global Marketing and Technology), attributed the growth to good capital management and high technology applications.

ABB is a debt-free entity and a cash-rich company, with Rs 1,300 crore surplus against paid-up capital of Rs 42 crore.

He said that global acquisitions are in ABB's scheme of things; these will include companies within India but only in areas of strength, like power technology and automation.

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ABB India plans stock split, posts 54% rise in net profit