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

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

  • MyStocks


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  
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

These 5 Penny Stocks are Held by Rakesh Jhunjhunwala. Worth a Look? (Views On News)

Jan 18, 2022

Rakesh Jhunjhunwala is holding these penny stocks in his portfolio for several years now.

Time to Buy Energy Stocks (Fast Profits Daily)

Jan 14, 2022

Energy is a sector that looks set to take off. It's time to get in.

Tech Mahindra's CTC Acquisition: Too Expensive? (Views On News)

Jan 18, 2022

Tech Mahindra's acquisition of European IT-company fails to excite investors.

5 Hidden Tata Group Companies to Add to Your Watchlist (Views On News)

Jan 18, 2022

Here's all you need to know about these five Tata group stocks that aren't as popular as the others.

Insiders are Buying into these 6 Stocks Aggressively. More Details here... (Views On News)

Jan 19, 2022

While promoter holding is an important parameter, it should not be the sole reason for buying a stock.


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


Jan 27, 2022 (Close)


  • 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