ABB India Limited reported its financial results for the first quarter ended March 31, 2026, highlighting a 25% growth in orders. The company’s order book reached INR11,000 crores, driven by robust demand across core and emerging sectors such as transport, data centers, and renewables. This backlog provides strong visibility for revenue execution in the coming quarters.

Revenue from operations for the quarter was INR3,184 crores, a 6% increase compared to the previous year. However, the company noted that revenue was slightly subdued due to last-minute supply chain disruptions caused by geopolitical issues in West Asia. Despite these challenges, the company dispatched its first locally manufactured wind power converter from the Nelamangala facility, marking a significant milestone.

Financial Performance

Profitability for the quarter was impacted by several factors, including higher material costs—specifically copper, silver, and aluminum—and a sharp depreciation of the Indian rupee against the US dollar and Euro. The company reported an exchange and commodity loss impact of INR27.5 crores. Additionally, competitive intensity and changes in revenue mix contributed to a contraction in margins.

The company’s cash position remains strong, standing at INR6,042 crores. Excluding the proceeds from the sale of its Robotics division, the total cash position is approximately INR7,600 crores. Management indicated that while profitability faced headwinds, the strong order backlog and ongoing investments are expected to support future performance.

Business Segment Highlights

Performance across the company’s business divisions varied during the quarter:

• Electrification: Orders grew by 36% year-on-year, driven by data centers and the building segment. Revenues were supported by backlog execution, though profitability was affected by high material costs and the absence of a large data center order executed in the previous year. The segment holds a backlog of INR4,000 crores.
• Motion: The division recorded a 22% growth in orders, fueled by the rail segment and renewables. Revenue stood at INR1,200 crores with a profitability of 12.8%. Exports experienced a slight decline due to the geopolitical crisis.
• Automation: Order intake was subdued as decision-making in private capex and public expenditure slowed. However, the company reported a strong opportunity pipeline and higher profitability due to a favorable mix of services and projects.

Strategic Initiatives and Outlook

Management announced an investment of approximately $75 million to expand manufacturing and R&D capabilities in the country. This includes expanding service offerings for Motion and increasing smart product manufacturing in Electrification. The company is also focusing on sustainability, having reduced Scope 1 and 2 greenhouse gas emissions by 82%.

Looking ahead, the company remains cautious about global uncertainties but is optimistic about the domestic demand environment. Factors such as urbanization, smart infrastructure, and green energy are expected to drive growth. The management emphasized that while short-term headwinds exist, the strong order backlog and strategic investments position the company well for the future.

ABB has come under significant pressure from the analyst community following a disappointing set of Q1 results, with four major brokerages — Macquarie, Jefferies, BoFA Securities, and Citi — issuing bearish ratings on the stock. The results revealed sharp margin contraction across key profitability metrics, even as sales and order growth offered some support. Analysts have broadly flagged concerns around execution pace, rising input costs, adverse revenue mix, and forex headwinds as factors weighing on near-term earnings visibility.

Brokerage Ratings and Target Prices

The following table summarises the ratings and target prices assigned by each brokerage:

Macquarie: Downgrade on Weak Execution and Margin Pressure

Macquarie downgraded ABB to Underperform from Neutral, setting a target price of ₹5,470. The downgrade follows Q1 results in which EBITDA fell 27% and PAT declined 25%, even as sales registered a 6% growth. The brokerage attributed the sharp margin contraction to slow execution, higher input costs, adverse revenue mix, and forex impact. Macquarie also noted slower base order growth and lowered its earnings estimates, indicating that margin recovery may take time.

Jefferies: EBIT Miss and Structural Margin Concerns

Jefferies downgraded ABB to Underperform with a target price of ₹5,915, citing a significant miss on profitability metrics. EBIT excluding the robotics business missed estimates by 29%, while EBITDA margins fell 576bps YoY due to weak gross margins and the company's inability to fully pass on rising commodity costs. The brokerage flagged subdued industrial capex growth outside the power transmission and distribution segment as a structural headwind, expecting the recovery of margins to historical highs to be delayed.

BoFA Securities: Revenue Miss and Valuation Concerns

BoFA Securities maintained its Underperform rating on ABB with a target price of ₹4,764. The brokerage noted that revenue growth, excluding the robotics business, slowed to 6% YoY and missed estimates. Margins contracted sharply due to raw material inflation and an adverse revenue mix, despite strong 25% order growth. BoFA Securities cut its earnings estimates in response and continued to flag valuation concerns at current levels.

Citi: Strong Orders Seen as Already Priced In

Citi maintained a Sell rating on ABB with a target price of ₹5,200. The brokerage reported that EBITDA fell 19% YoY and missed estimates, driven by margin pressure stemming from commodity inflation, INR depreciation, competitive intensity, price cuts, and execution delays linked to Middle East conflict impacts. While acknowledging 25% YoY order growth, Citi viewed this as already priced into current valuations, limiting upside potential.

Key Concerns Across Brokerages

Across all four assessments, the following themes emerged as common concerns:

• Margin contraction driven by raw material inflation and adverse revenue mix
• Forex headwinds from INR depreciation impacting profitability
• Execution delays affecting revenue recognition and earnings
• Inability to fully pass on commodity cost increases to customers
• Stretched valuations despite strong order inflows
• Delayed margin recovery to historical levels

The convergence of bearish views from multiple brokerages underscores the near-term challenges facing ABB, with margin recovery timelines and execution pace remaining the central focus for analysts monitoring the stock.