Shares of ABB India fell over 5% to an intraday low of Rs 6,935 on the NSE on Tuesday, November 5, after the company’s post-earnings call where management provided a cautious outlook on future order inflows and execution challenges.
Order Inflows and Growth Outlook
ABB India’s management noted a healthy order inflow range between Rs 2,500 crore and Rs 3,000 crore but indicated that reaching the Rs 4,000 crore mark remains challenging.
For the quarter, order inflows were reported at Rs 3,342 crore, marking an 11% year-on-year increase but falling short of IIFL’s estimated figure of Rs 3,510 crore.
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Revenue Conversion Challenges
Management acknowledged a slower conversion rate from order booking to revenue, attributing it to the larger size of recent orders. Unlike smaller base orders, large orders require extended timelines, impacting the pace of revenue realization.
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Nevertheless, the company remains optimistic about growth over the next three to four quarters, driven primarily by the execution of base orders.
Sector Contributions and Order Backlog Composition
ABB India’s large orders currently stem from sectors such as metals, mining, oil & gas, transportation, and data centers. The company’s order backlog is composed of 25% large orders and 75% base orders, reflecting steady demand in its core sectors.
Management highlighted that while large order execution is yet to gather full momentum, project timelines are being aligned to facilitate smoother rollouts.
Issues in Low Tension Motor Segment
ABB India’s management also addressed challenges within its Low Tension Motor segment, where the company holds a significant market share. The segment has been facing pricing pressures, which have impacted revenue.
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