Prabhudas Lilladher Recommends Accumulating ABB India, Targets Rs 6319

ABB India Research Report

Revised EPS Estimates

We have revised our earnings per share (EPS) estimates for CY26/CY27E by 5.6%/6.2% to account for strong order inflow and improved revenue visibility across segments. The company reported a 5.7% year-over-year (YoY) revenue growth in Q4CY25.

Operating Performance

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ABB India reported a contraction of 521 basis points (bps) in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin YoY due to commodity inflation and quality control order (QCO)-related material impact. The management has guided for double-digit revenue growth supported by healthy base order conversion with a profit after tax (PAT) margin of 12-15% in CY26.

Order Bookings

Large project order bookings have remained lumpy due to deferred customer decisions, although the management highlighted a strong pipeline across power generation & transmission, energy industries, and data centers. The company expects a pick-up in orders as private capital expenditure (capex) revives. Electrification and Motion continue to anchor order intake, aided by smart power, distribution solutions, propulsion systems for railways, drives, and large motors.

Segment Performance

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Process Automation saw order momentum improving, led by energy and processing industries, although revenue growth remains modest. Data centers (~11% of order backlog) remain a structural growth driver, with ABB India's end-to-end electrical and automation capabilities positioning the segment to support growth in CY26 and beyond.

Valuation

The stock currently trades at a price-to-earnings (P/E) ratio of 63.5x/54.4x on CY26/27E. We roll forward to Mar'28E and maintain our 'Accumulate' rating, valuing the stock at a P/E of 56x Mar'28E (56x Sep'27E), arriving at a target price of Rs6,319 (Rs5,540 earlier).