Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
ABB Limited (India)
Q4CY10: Weak performance continues
„ CY10 results: Numbers below expectations
In full year CY10, operating income of Rs63.59bn has increased 1% YoY and
EBITDA margins declined 420bps YoY (higher raw material and staff costs).
Recurring PAT has declined 31% YoY to Rs2.78bn this is after adjusting for MTM
losses of Rs946m and Rs1.2bn provision for exit cost relating to rural
electrification business, reported PAT declined 82% YoY to Rs632m. The results
were below UBS estimates. In 4Q CY10, ABB India reported operating income of
Rs20.72bn, an increase of 9% YoY, recurring PAT declined 64% YoY to Rs443m.
„ Good execution in power business, margins remained under pressure
In 4Q CY10, power division sales increased 15% YoY (systems grew 49% and
products sales declined 9%). Automation division sales increased 5% y-o-y
(products grew 4% and process grew 5% YoY). The EBIT margins have declined
in all business segments except for power systems and low voltage product
segments where margins improved a bit but remained negative.
„ CY10 order inflow of Rs63.5bn (down 27% YoY)
ABB India received orders worth Rs63.5bn in CY10 (a decline of 27% YoY). The
order book is Rs84.36bn remained flat YoY. Key takeaways from call are: a)
company expects increased order booking in power segment from Q2CY11, and b)
also expects that EBIT margins will improve in power segment from next year.
„ Valuation: Maintain Sell
We base our PT of Rs650 on a three-stage DCF methodology. We assume 20%
medium-term growth (2014-18E), a WACC of 9.8%, and terminal growth of 5%.
Q ABB Limited (India)
ABB India (ABB) is a 52.11%-owned subsidiary of Switzerland-based ABB
Group, a global provider of power transmission and distribution (T&D) products
and automation technology. ABB is a leader in the medium- (MV) to highvoltage (HV) power T&D and process industry automation in India. ABB Group
also uses India as a resource base for its international operations.
Q Statement of Risk
The keys risks for ABB are: a slowdown in power sector investment, an
industrial slowdown, raw materials risk, competition, employees’ retention and
execution risks. The key risk for our rating is faster than expected recovery and
better than expected margins on current order book.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
ABB Limited (India)
Q4CY10: Weak performance continues
„ CY10 results: Numbers below expectations
In full year CY10, operating income of Rs63.59bn has increased 1% YoY and
EBITDA margins declined 420bps YoY (higher raw material and staff costs).
Recurring PAT has declined 31% YoY to Rs2.78bn this is after adjusting for MTM
losses of Rs946m and Rs1.2bn provision for exit cost relating to rural
electrification business, reported PAT declined 82% YoY to Rs632m. The results
were below UBS estimates. In 4Q CY10, ABB India reported operating income of
Rs20.72bn, an increase of 9% YoY, recurring PAT declined 64% YoY to Rs443m.
„ Good execution in power business, margins remained under pressure
In 4Q CY10, power division sales increased 15% YoY (systems grew 49% and
products sales declined 9%). Automation division sales increased 5% y-o-y
(products grew 4% and process grew 5% YoY). The EBIT margins have declined
in all business segments except for power systems and low voltage product
segments where margins improved a bit but remained negative.
„ CY10 order inflow of Rs63.5bn (down 27% YoY)
ABB India received orders worth Rs63.5bn in CY10 (a decline of 27% YoY). The
order book is Rs84.36bn remained flat YoY. Key takeaways from call are: a)
company expects increased order booking in power segment from Q2CY11, and b)
also expects that EBIT margins will improve in power segment from next year.
„ Valuation: Maintain Sell
We base our PT of Rs650 on a three-stage DCF methodology. We assume 20%
medium-term growth (2014-18E), a WACC of 9.8%, and terminal growth of 5%.
Q ABB Limited (India)
ABB India (ABB) is a 52.11%-owned subsidiary of Switzerland-based ABB
Group, a global provider of power transmission and distribution (T&D) products
and automation technology. ABB is a leader in the medium- (MV) to highvoltage (HV) power T&D and process industry automation in India. ABB Group
also uses India as a resource base for its international operations.
Q Statement of Risk
The keys risks for ABB are: a slowdown in power sector investment, an
industrial slowdown, raw materials risk, competition, employees’ retention and
execution risks. The key risk for our rating is faster than expected recovery and
better than expected margins on current order book.
No comments:
Post a Comment