ABB India Limited , a leading technology company, reported mixed results for the second quarter, with revenue growth offset by margin pressures. The company's performance reflects both market challenges and operational adjustments in a changing business environment.

Revenue Growth and Order Book

ABB India achieved an all-time high second-quarter revenue of INR 3,175.00 crores, marking a 12% growth compared to the same period last year. This growth demonstrates the company's strong execution capabilities and market presence. Additionally, the order backlog reached a record high of over INR 10,000.00 crores, providing a solid foundation for future revenue generation.

Base Orders and Market Dynamics

While large orders saw a decline compared to the previous year, base orders grew by 5%, indicating resilience in the company's core business segments. This growth in base orders was particularly notable in the Electrification and Motion business areas, reflecting continued demand for ABB's products and solutions in various industries.

Profitability Challenges

Despite revenue growth, ABB India faced profitability pressures during the quarter. The EBITDA margin declined to 13%, impacted by several factors:

1. Quality Control Order (QCO) compliance requirements led to higher import content, affecting margins.
2. Foreign exchange volatility impacted costs by INR 56.00 crores.
3. One-off costs of INR 39.50 crores in the Electrification segment.
4. Competitive pricing pressures in certain segments, particularly in the Motion business.

Segment Performance

Market Outlook and Strategy

ABB India's management noted some softening in the market, with delayed decision-making on large projects. However, they remain cautiously optimistic about future prospects. The company is focusing on:

1. Expanding its presence in Tier-II and Tier-III markets.
2. Introducing new products and technologies to strengthen its market position.
3. Managing the transition to comply with QCO requirements while maintaining customer commitments.
4. Balancing the mix between imported components and locally manufactured content to optimize profitability.

Financial Position and Shareholder Returns

ABB India maintains a strong financial position with a cash balance of INR 5,054.00 crores, even after distributing INR 700.00 crores in dividends. The Board of Directors has declared an interim dividend of INR 9.77 per equity share, continuing its commitment to shareholder returns.

Conclusion

While facing short-term challenges, ABB India remains well-positioned in the market with its diverse portfolio and strong order backlog. The company's focus on operational efficiency, market expansion, and technological innovation is expected to drive performance in the coming quarters as it navigates the current market dynamics.

ABB India , a leading player in electrification and automation, has announced plans to intensify its efforts in localizing more products for the Indian market. This strategic move is aimed at strengthening the company's channel partnerships, as revealed during a recent conference call.

Record Backlog and Financial Outlook

ABB India has achieved its highest ever backlog, exceeding Rs 10,000.00 crores, with deliveries scheduled over the next 18-24 months. The company maintains its policy of not providing specific quantitative guidance while working to sustain its historical margin band of 12-15% amid current challenges. ABB India is experiencing delayed decision-making on large projects but continues advancing software development for robotics, including digital twin technology and AI capabilities.

Enhancing Local Manufacturing

The company's 'Local for Local' strategy has been a cornerstone of its operations in India. Currently, over 90% of ABB India's locally manufactured products are consumed within the country. This approach has not only helped in meeting local demand but has also contributed to the company's robust growth in the Indian market.

Expanding Product Portfolio

ABB India has significantly expanded its operations over the years, evolving from a traditional electrical equipment and engineering firm to a future-ready electrification and automation technology leader. The company now serves 23 industry segments, a substantial increase from just six in its early years.

Strengthening Channel Partnerships

By focusing on product localization, ABB India aims to:

• Improve product availability and reduce lead times
• Enhance customization capabilities to meet specific local requirements
• Strengthen relationships with channel partners by providing them with more locally relevant products

Commitment to India's Growth

Sanjeev Sharma, Country Head and Managing Director of ABB India, emphasized the company's commitment to India's progress. He stated, "As India enters a new era of modern infrastructure, digitalization, and energy transition, ABB is proud to play a role that shapes the future of the country."

Impressive Growth Trajectory

ABB India's growth story in the country has been remarkable:

• Revenue has increased 20 times since 1994
• Profit After Tax (PAT) has grown 37 times in the same period
• The company's manufacturing footprint has expanded three-fold, with green-certified facilities

Conclusion

As ABB India continues to align its product offerings with local market needs, the company is well-positioned to capitalize on India's growing demand for electrification and automation solutions. This localization strategy is expected to not only boost ABB's market presence but also contribute significantly to the country's 'Make in India' initiative and overall industrial growth.

The company's focus on strengthening channel partnerships through increased product localization, coupled with its record backlog and ongoing technological advancements, demonstrates its long-term commitment to the Indian market and its adaptability to evolving market dynamics.