Jefferies has maintained a ‘Buy’ rating on ABB India, but cut its target price to ₹7,130 from ₹9,050 due to slowing order inflows.
In Q4CY24, ABB’s EBITDA was 13% ahead of estimates, supported by 354 bps YoY expansion in gross margins. Strong pricing power and revenue mix helped sustain margins. However, order flow growth for CY24 was just 6% YoY, with Q4 alone registering a 14% YoY decline, raising concerns over future revenue visibility.
Jefferies has lowered its revenue growth forecast for CY24-26 from 25% CAGR to 22% CAGR. It also sees gross margins normalizing, leading to a 15%+ cut in earnings estimates.
At current levels, the brokerage believes the stock is already pricing in a slowdown, but long-term fundamentals remain intact.
