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ABB India stock surged 8.86 per cent on the BSE to ₹5,4,31. 50 on Thursday after the company came out with a strong quarterly results.. During the day, the stock hit an all-time high of ₹5,456.95, as analysts see bright prospects going ahead.
The stock has continued to rise since the company announced its financial results for the quarter and year ended December 2023 on Tuesday (after market hours). Besides, its board also recommended a final dividend of ₹23.80 a share for the financial year ended December 31, 2023, subject to shareholders’ approval at the ensuing AGM.
ABB posted a 13 per cent rise in Profit After Tax (PAT) to ₹345 crore in the December quarter. Its total revenue rose to ₹2,757 crore (₹2,427 crore) in the year-ago period.
Brokerages recommend ‘buy’
Following the strong financial performance, brokerages have raised the target price higher for ABB stock.
Jefferies, while retaining ‘Buy’ rating, has increased the target price to ₹6,115, given that the order flow was up 35 per cent y-o-y, indicating robust revenue growth prospects. It said that the margins were flattish at 10 bps y-o-y improvement, but CY23 margins were up 303 bps y-o-y at 14.3 per cent.
Noting the upbeat in order outlook, Nomura has given a ‘buy’ rating for the stock and has increased the target price to ₹5,740. The analysts have stated that the margin trajectory of 14-14.5 per cent appears sustainable.
However, analysts at Yes Securities Institutional Equities have downgraded the stock to ‘add’ from ‘buy’ rating, given the sharp rise in share price in recent times. “We expect the company to report revenue CAGR of 21 per cent over CY23-25 while EBITDA margin is expected to remain at similar levels with operating leverage benefit being a lever to compensate the risk of higher commodity prices,” the report said.
Analysts of Nuvama Institutional Equities quoted in a report that the company has missed street’s sales/EBITDA estimates by 8 per cent /2 per cent as sales growth/OPMs slowed across segments. “Base orders (higher revenue mix) are slowing while high growth new-age areas have low mix,” it added. The analysts have retained a ‘hold’ call on the stock and said, “We revise CY24/25E EPS by 6/3 per cent (about 12.8-13 per cent OPMs), roll forward to Mar-26 EPS at 70x to a revised TP of ₹4,860 from the earlier ₹4,585).
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