Mehabe score: 5 G Factor: 2 Piotski Score: 6 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 6.
Description
ABB India is engaged in served utility and industry customers for over six decades with the complete range of engineering, products, solutions and services in areas of Automation and Power technology.Site:ABBMain Symbol:ABB
Stock trades at 1846.0, above its 50dma 1803.32. It also trades above its 200dma 1564.19. The stock remains bullish on techicals
The 52 week high is at 1943.90 and the 52week low is at 848.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 33.92%
Weakness
– Stock is trading at 10.50 times its book value
-The company has delivered a poor sales growth of -6.48% over past five years.
– has a low return on equity of 9.18% for last 3 years.
-Earnings include an other income of Rs.161.41 Cr.
Competition
– The industry trades at a mean P/E of 26.2x. A B B trades at the industry’s max P/E of 132.69x. ABB trades at a P/E of 133.0x
– Industry’s mean G-Factor is 3.3 while the mean Piotski score is 7.0. ABB has a G-Factor of 2 and Piotski scoreof 6.
– Average 1 month return for industry is 6.7%. The max 1- month return was given by CG Power & Indu.: a return of 35.25 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 1778.0 cr compared to Rs 1612.0 cr for period ended Sep 2020, a rise of 10.3%
Operating Profits reported at Rs 169.0 cr for period ended Sep 2021 vis-vis 117.0 for period ended Sep 2020 .
Operating Margins expanded 224.7 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 5.66 compared to Rs 3.32 for previous quarter ended Jun 2021 and Rs 3.81 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 6533.0 cr for period ended TTM vis-vis sales of Rs 5821.0 cr for the period ended Dec 2020, a healthy growth of 10.9%. The 3 year sales cagr stood at -0.8%.
Operating margins expanded to 7.0% for period ended TTM vis-vis 5.0% for period ended Dec 2020, expansion of 200.0 bps.
Net Profit reported at Rs 389.0 cr for period ended TTM vis-vis sales of Rs 219.0 cr for the period ended Dec 2020, rising 43.7%.
Company reported a poor Net Profit CAGR of -8.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 108% on a 1 Year basis vis-vis a return of 19% over the last 3 Years. – The compounded sales growth on a TTM bassis is 3% vis-vis a compounded sales growth of -2% over the last 3 Years. – The compounded profit growth on a TTM basis is 54% vis-vis a compounded profit growth of -26% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 3.49% vis-vis 3.73% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 14.55% vis-vis 14.21% for Jun 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 33.92% – Stock is trading at 10.50 times its book value
-The company has delivered a poor sales growth of -6.48% over past five years.
– has a low return on equity of 9.18% for last 3 years.
-Earnings include an other income of Rs.161.41 Cr.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 1803.32 and is trading at 1846.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
