Buy ABB India Ltd For Target Rs. 6,700 by Motilal Oswal Financial Services Ltd
* We expect ABB’s revenue growth to be largely flat QoQ and grow by 9.5% YoY. Growth moderatation is due to lower order inflows during CY24 and the transient impact of slow government and private capex. Order inflows would be the key monitorable in light of the same.
* We expect revenue to grow 9.5% YoY, driven by the Robotics & Motion and Electrification segments. Key monitorables include momentum of inflows, sustainability of margins, outlook on exports, and localization levels.
* The high base effect of CY24 will start playing in margins; margin performance will be aided by product mix, share of services, and operating leverage. Sequentially, we expect margin moderation to bake in slower demand and higher costs.
* We would watch out for incremental inflows from transmission, railways, data centers, transportation, F&B, and private capex to support order inflow growth.
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