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Results above expectations

* ABB India reported a good set of numbers in 4QCY24, with a beat across all parameters.

* Revenue at INR33.65b grew 22% YoY, beating our expectation of INR31.4b by 7%, led by Electrification (up 33% YoY) with seamless execution of data center orders, from EPC customers, and export markets from Distribution Solution division. Robotics vertical, on the other hand, was able to convert opportunities from electronics and automotive segments. Motion segment revenue growth was driven by traction drives and converters. Process Automation was stable for the quarter.

* Gross margin expanded ~190bp YoY to 40.5%, aided by robust demand, stable commodity prices, price hikes, and a better product mix.

* As a result, EBITDA jumped 58% YoY to INR6.6b vs. our estimate of INR5.8b (14% beat). Accordingly, EBITDA margin expanded 440bp YoY to 19.5% vs. our estimate of 18.3%.

* All business areas posted healthy double-digit growth, driven by better price realization, leverage of higher volumes, and operational efficiencies supported by a favorable mix of revenue and market segments.

* PAT grew 54% YoY to INR5.3b vs. our estimate of INR4.7b, aided by a lower tax rate of 24.6% vs. our estimate of 26.3%.

* Order inflows for 4QCY24 stood at INR27b, down 14% YoY, due to a high base of last year, which had one-time large orders from Motion and Process Automation.

* Overall order inflows for CY24 were up 6% YoY at INR131b; within this, large orders were up 20% YoY, which shows the changing order book mix of the company.

* Cash balance stood at INR53.9b at the end of 4QCY24.

* NWC increase was mainly witnessed in inventory, which is consciously built to cater to the delivery of the backlog as per the agreed schedule.

* For CY24, the company reported revenue/orders/EBITDA/PAT growth of 17%/6%/55%/50% YoY.

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