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YES Securities
ABB India (Buy)
Target: ₹961
CMP: ₹892
Revenues were down 43 per cent y-o-y to ₹986 crore due to supply chain disruptions, lower service revenues on the account of national lockdown and non-receipt of delivery clearances. Revenues from industrial automation/electrification/motion/robotics & discrete automation segments have declined.
Order inflow de-grew by 31 per cent (ex-solar inverter) to ₹1,200 crore by securing orders in varied sectors, including power distribution equipment, automation projects for process industries, food and beverage and electronics. Sectors with continued investment include, rail infrastructure, industrial buildings as well as water and waste-water.
The impact caused by lower revenues during the quarter was offset to a reasonable extent by various cost saving initiatives that were implemented by the company as well as favourable forex valuations.
The company continues to focus its efforts on cash collections and cost optimisation initiatives.
Cash position remains strong at approximately ₹1,500 crore.
Operating cash flow was negative at ₹520 crore as on Q2-CY20 due to fall in profitability ₹Rs 210 crore as on Q2-CY19.
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