Differentiated portfolio mix boosts ABB Q3 profit higher by 29.91%

ABB India, backed by differentiated portfolio mix and digital value additions, has posted 29.91 per cent higher profits at Rs 108.34 crore in the third-quarter (Q3) of calander year 2018 as against Rs 83.39 crore profits posted in the same period last year.

Company’s total income is also higher by 30.77 per cent at Rs 2515.36 crore as against Rs 1923.40 crore recorded last year. EPS for the quarter stood at Rs 5.11 as aginst Rs 3.94 posted last year.

Commenting on company’s performance, Sanjeev Sharma, MD, ABB India said, “We have delivered another satisfying quarter of increased orders, improved revenues and step-up in profits. Profitable growth was supported by base orders and the successful execution of our quality order backlog. All divisions registered double digit growth benefiting from technology solutions for the local and international markets.”

“Relentless execution is reflected in the consistent productivity enhancement, focus on managing costs and improving net cash position. ABB’s market leading ABB Ability digital offerings are driving the next level of growth in markets for process industries, food and beverage, smart cities, mobility solutions and data centres,” he added.

Orders

Company’s total orders increased to Rs 2,355 crore during the third quarter of 2018, driven by a base order growth of 16 per cent. The base order growth was supported by offerings for smart factory applications and ABB Ability digital solutions in sectors like food and beverage and building automation. Power infrastructure for solar segment also contributed to moderately large orders.

Transportation remains a major growth area with orders from railways for power equipment as well as electric propulsion systems in the quarter. ABB India in Q3, provided power quality management solutions for India longest dedicated rail freight corridor project.

ABB’s water management solutions is one of the key elements in building smarter and inclusive Indian cities. During the quarter, the company received an order for distributed control systems (DCS), including the electrification of a control room for the waste water management sewage treatment plant (STP) of a new smart city in Gujarat.

Oil and gas

Improved opportunities for cement, oil and gas and mining opportunities were other highlights of the quarter. The double-digit growth in services was led by the orders in process optimization, technical information systems, and digitalization applications across select process industries.

Propelled by the global growth in renewable energy and industrial energy management, export orders continued its solid growth trajectory.

The order backlog as of September 30, 2018 is Rs 11,368 crore and is expected to provide revenue visibility for the coming quarters.

Outlook

As the domestic market readies itself for elections across various states, the multiple government initiatives in renewable energy, transportation, digitalization and smart cities are likely to provide the levers for sustainable growth in the medium to long term.

The initial impact of industrial recovery is being felt across certain sectors like steel, mining, oil and gas and could retain a similar pace for the medium term. Despite global head winds of geopolitical trade tensions, fiscal consolidation and volatility in commodity prices and forex, ABB is well-positioned to tap into these opportunities for medium to long-term profitable growth.

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