Mehabe score: 6 G Factor: 3 Piotski Score: 9 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 3 and Piotski score of 9.
Description
ABB India Limited is an integrated power equipment manufacturer supplying the complete range of engineering, products, solutions and services in areas of Automation and Power technology. [1] Site:ABB Main Symbol:ABB
Stock trades at 2209.0, above its 50dma 2131.21. It also trades above its 200dma 1977.75. The stock remains bullish on techicals
The 52 week high is at 2469.60 and the 52week low is at 1298.55
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
Weakness
– Stock is trading at 11.57 times its book value
-The company has delivered a poor sales growth of -4.31% over past five years.
– has a low return on equity of 8.53% for last 3 years.
-Earnings include an other income of Rs.280.96 Cr.
Competition
– The industry trades at a mean P/E of 31.6x. Hitachi Energy trades at the industry’s max P/E of 115.8x. ABB trades at a P/E of 109.0x
– Industry’s mean G-Factor is 2.4 while the mean Piotski score is 9.0. ABB has a G-Factor of 3 and Piotski scoreof 9.
– Average 1 month return for industry is 9.5%. The max 1- month return was given by CG Power & Indu.: a return of 23.57 %
Quarterly Results
Sales for period ended Dec 2021 is Rs 2102.0 cr compared to Rs 1701.0 cr for period ended Dec 2020, a rise of 23.6% .
vis-vis 81.0 for period ended Dec 2020 .
Operating Margins expanded 380.1 bps for period ended Dec 2021 vis-vis Dec 2020.
Company reported operating profit of Rs 180.0 cr for period ended Dec 2021 and operating profit margin at 8.6 % for same period.
The EPS for quarter ended Dec 2021 is Rs 8.88 compared to Rs 5.66 for previous quarter ended Sep 2021 and Rs 2.72 for Dec 2020.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 6934.0 cr for period ended Dec 2021 vis-vis sales of Rs 5821.0 cr for the period ended Dec 2020, a healthy growth of 16.1%. The 3 year sales cagr stood at 1.2%.
Operating margins expanded to 8.0% for period ended Dec 2021 vis-vis 5.0% for period ended Dec 2020, expansion of 300.0 bps.
Net Profit reported at Rs 520.0 cr for period ended Dec 2021 vis-vis sales of Rs 219.0 cr for the period ended Dec 2020, rising 57.9%.
Company recorded a Net Profit CAGR of 0.6% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 649.0 cr for period ended Dec 2021 vis-vis Rs 318.0 cr for period ended Dec 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 11.0% compared to 9.0% over the last 3 Years. – The stock has given a return of 61% on a 1 Year basis vis-vis a return of 21% over the last 3 Years. – The compounded sales growth on a TTM bassis is 19% vis-vis a compounded sales growth of 1% over the last 3 Years. – The compounded profit growth on a TTM basis is 146% vis-vis a compounded profit growth of -5% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Dec 2021 fii holding stood at 3.76% vis-vis 3.49% for Sep 2021 – Public shareholding has remained largely constant. The Dec 2021 public holding stood at 13.21% vis-vis 14.55% for Sep 2021
Conclusion
– is almost debt free. – Stock is trading at 11.57 times its book value
-The company has delivered a poor sales growth of -4.31% over past five years.
– has a low return on equity of 8.53% for last 3 years.
-Earnings include an other income of Rs.280.96 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 2131.21 and is trading at 2209.0 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
