Nomura has downgraded ABB India to a Reduce rating and set a target price of ₹4,970, which is below the current market price of ₹5,575.00. The brokerage cited a weaker-than-expected Q1 performance and limited near-term upside after the recent stock run-up.
For Q1CY25, sales, adjusted EBITDA, and PAT were 8%, 10%, and 9% below consensus estimates, respectively. ABB reported a profit after tax (PAT) of ₹470 crore, a modest 3% year-on-year increase, but 5% below Nomura’s estimate and 9% below street expectations.
While operating metrics fell short, order inflows remained a positive, standing at ₹3,750 crore, up 4% YoY, and 4% ahead of Nomura’s forecast. Base order inflows also saw healthy growth of 9.6% YoY, reflecting resilient demand across segments.
ABB’s cash position improved to ₹5,760 crore at the end of Q1CY25, compared to ₹5,000 crore in Q1CY24 and ₹5,400 crore in the previous quarter, indicating strong liquidity and operational discipline.
Despite these positives, Nomura believes the current valuation already factors in near-term growth, and with earnings delivery missing expectations, the brokerage prefers to adopt a cautious stance.
Disclaimer: This article is based entirely on brokerage commentary and company disclosures. It does not constitute investment advice. Business Upturn and the author do not recommend buying or selling any stock mentioned.
