ABB India’s Shares Surged, Hitting a 52-week High, Locked at a 10% Upper Circuit

ABB India

Today, ABB India’s stock price surged, hitting a 52-week high as it was locked at over a 10% upper circuit, reaching ₹5,019.00 per share on the BSE on Wednesday, February 21. This uptick followed the release of its Q4CY23 results. ABB India follows the calendar year for financial reporting and disclosed a net profit of ₹339 crore for the October-December period of the previous year.

The major player in electrification and automation saw a 10% increase in net profit compared to ₹305.3 crore in the corresponding period of the previous year. Revenue from operations for the quarter rose by 13.6% to ₹2,757.5 crore, compared to ₹2,427 crore in the same period last year. ABB India marked its highest-ever Q4 revenue in the past five quarters.

The surge in profitability during the quarter was attributed to enhanced cost absorption driven by increased capacity utilization, revenue mix, and improved price realization, aided by a softening of commodity prices, as per ABB India’s regulatory filing to the stock exchanges.

On the operational front, the company saw a 14.6% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA), rising to ₹417.2 crore from ₹364.3 crore in the corresponding period of the previous year. The EBIT margin also witnessed a slight improvement, rising by 10 basis points to 15.1% compared to 15% in the same quarter last year. One basis point represents a hundredth of a percentage point.

During the fourth quarter, total orders surged by 35% to ₹3,147 crore. For the year 2023, the company received orders worth ₹12,319 crore, marking a 23% increase over 2022. “Our broad-based growth is a result of deepening engagement across diverse market segments, portfolio expansion, and localization efforts tailored for the Indian market,” stated the company.

In terms of earnings per share (EPS), the company reported ₹16.29 for the fourth quarter, compared to ₹14.44 in the previous year’s corresponding quarter. For the full year of CY2023, the EPS stood at ₹58.90, up from ₹48.40 year-on-year, reflecting the growth in operational profitability.

Sanjeev Sharma, Managing Director of ABB India, expressed gratitude for the consistent confidence customers place in their value-adding electrification and automation products, solutions, and services. He highlighted the company’s focus on superior margins and a strategic mix, which continues to support robust cash generation.

The growth during the quarter was driven by sectors including railways, metals, data centers, cement, specialty chemicals, and construction machinery, as reported by the company.

The company’s board has proposed a final dividend of Rs. 23.80 per share (1,190%), amounting to 21,19,08,375 equity shares with a face value of Rs. 2 each, fully paid up for the financial year ended December 31, 2023, pending approval from shareholders at the upcoming annual general meeting.

This recommendation for a final dividend comes in addition to the special dividend of ₹5.5 per share declared in Q2 CY2023. If approved at the annual general meeting, the dividend will be disbursed after May 11, 2024.

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