ABB: Bottomline up 20% - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

ABB: Bottomline up 20%

Oct 30, 2003

Automation major, ABB has posted a healthy 22% increase in its topline for 3QFY04. However, the bottomline of the company grew at marginally slower rate, up 20% YoY. The 9-month picture looks better as the bottomline has shown an improvement of 33%. Though operating profit margins have registered a decline, they are more or less in line with the past trend of the company.

(Rs m)3QFY033QFY04Change9mFY039mFY04Change
Net Sales 2,761 3,37222.1% 8,021 9,512 18.6%
Other Income 52 8462.3% 139 226 62.9%
Total expenditure 2,529 3,10422.8% 7,419 8,836 19.1%
Operating Profit (EBDIT)23226815.5% 602 676 12.3%
Operating Profit Margin (%)8.4%7.9% 7.5%7.1% 
Interest 1 3 135.5% 5 6 13.0%
Depreciation 44 46 4.9% 134 135 0.9%
Profit before Tax 238 303 27.0% 602 761 26.3%
Extraordinary Items00  144 233 61.8%
Tax 65 95 45.4% 185 246 32.7%
Profit after Tax/(Loss) 173 208 20.0% 561 748 33.3%
Net profit margin (%)6.3%6.2% 7.0%7.9% 
No. of Shares (eoy) (m)42.442.4 42.442.4 
Earnings per share* (Rs)16.419.6  26.5 23.5  
*(annualised)      
Current P/E ratio 26.7  23.2 

A 22% growth in the topline came mainly due to increase in the power technology revenues. The operating margins were lower by 50 basis points because of material cost increased by around 25%. Staff cost of the quarter has come down marginally. The difference between net profit margins reduced because of higher other income in September quarter of FY04. However, due to higher extraordinary income in second quarter, the net profit margins for nine-month period of FY04 have improved by 90 basis points.

Let’s have a look at the segmental revenues.

Segmental revenues (Rs m)3QFY033QFY04Change9mFY039mFY04Change
Power Technology revenues 1,687 2,064 22.3% 4,772 5,732 20.1%
PBIT 77 110 43.9% 271 268 -1.0%
PBIT margin4.5%5.3% 5.7%4.7% 
Automation Technology revenues 1,262 1,423 12.8% 3,588 4,165 16.1%
PBIT 144 130 -9.9% 337 329 -2.2%
PBIT margin11.4%9.1% 9.4%7.9% 
Others 26 80 209.5% 192 229 19.8%
PBIT 19 7-65.4% 20 27 30.7%

Revenues from automation have gone up but the margins have come down by around 230 basis points for the quarter. Company is currently focusing on increasing the revenues from this segment. It has increased the dealer network by more than 100% in last one year. However, company is confident of improving the margins in fourth quarter, as most of its projects will be finishing by that time.

Power business has delivered relatively better performance during second quarter. Margins form the segment has also improved by around 80 points. However, over nine month period margins are still lower by 100 basis points YoY. ABB is currently focusing on APDRP (accelerated power development reform programs) as it is the key topline driver for the power segment. Since company’s majority of power revenues are in the form of contract business, fourth quarter plays an important role.

The company has received orders worth Rs 12.5 bn during the nine-month period of 2003, registering an increase of 34% YoY. The order intake for the third quarter was also higher by 22% YoY. The orderbook backlog of ABB stood at Rs 11.4 bn as on September 2003, which is around 0.9 times FY03 revenue.

At the price level of 525, the stock trades at P/E multiple of 22.6x, annualised 9mFY04 earnings. Though growth prospects of the company are good, but looking at the valuations it seems that market has factored the future growth.

Equitymaster requests your view! Post a comment on "ABB: Bottomline up 20%". Click here!

  

More Views on News

ABB INDIA 2019-20 Annual Report Analysis (Annual Result Update)

Oct 27, 2021 | Updated on Oct 27, 2021

Here's an analysis of the annual report of ABB INDIA for 2019-20. It includes a full income statement, balance sheet and cash flow analysis of ABB INDIA. Also includes updates on the valuation of ABB INDIA.

ABB INDIA Announces Quarterly Results (4QFY21); Net Profit Up 128.2% (Quarterly Result Update)

Jul 8, 2021 | Updated on Jul 8, 2021

For the quarter ended March 2021, ABB INDIA has posted a net profit of Rs 2 bn (up 128.2% YoY). Sales on the other hand came in at Rs 16 bn (up 7.0% YoY). Read on for a complete analysis of ABB INDIA's quarterly results.

Infrastructure Boom Ahead. Here are 3 Ways to Play It... (Views On News)

Aug 24, 2021

India is expected to become the third largest construction market next year. For that, it needs huge investments.

G R Infraprojects Makes a Bumper Listing on Bourses. Big Gains for IPO Investors (Views On News)

Jul 19, 2021

GR Infra shares were subscribed over 100 times in its IPO.

Here's Why the Stock of Ashoka Buildcon was in Focus Today (Views On News)

Jul 13, 2021

Ashoka Buildcon shares up on bagging NHAI project.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

ABB INDIA SHARE PRICE


Dec 1, 2021 03:36 PM

TRACK ABB INDIA

  • Track your investment in ABB INDIA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

ABB INDIA - CG POWER & INDUSTRIAL COMPARISON

COMPARE ABB INDIA WITH

MARKET STATS