Emkay Global Maintains Sell Rating, Downgrades ABB India to Rs 5875 Target Price

ABB India Announces Significant Capital Expenditure Plan

ABB India, a leading provider of electrification and automation solutions, has unveiled a substantial capital expenditure (capex) plan for CY26, amounting to approximately USD75mn. This investment is intended to enhance the company's manufacturing capacity and research and development (R&D) capabilities, complementing the USD35mn spent in CY25.

The capex plan is expected to be allocated towards expanding manufacturing capacity, modernizing existing facilities, and developing advanced manufacturing technologies. These initiatives will enable ABB India to cater to the increasing demand from various sectors, including energy transition, data centers, transportation, and industrial automation. The company's management attributes the strong demand to the country's energy transition, grid modernization, data-center development, and rapid expansion of the metro and high-speed rail segments.

Key Highlights

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• USD75mn capex plan for CY26
• USD35mn spent in CY25
• Expansion of manufacturing capacity and R&D capabilities
• Allocation towards modernization of existing facilities and development of advanced manufacturing technologies

Recommendation

We have introduced estimates for CY28 and revised our target price to Mar-28E. Our recommendation remains REDUCE on the stock, with a revised target price of Rs5,875 (55x Mar-28E EPS), reflecting premium valuations.