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India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/dmb/MorningInsight27022012.pdf
ABB LTD
RECOMMENDATION: REDUCE
TARGET PRICE: RS.670 CY12E P/E: 31.7X
q ABB reported a muted revenue growth of 6% yoy in the fourth quarter of
CY11 partly due to sluggish execution of long-cycle orders.
q The profitability has been bearing the brunt of exit-costs related to the
rural electrification business and execution of few strategic but low margin orders.
q The T&D equipment industry continues to reel under cost pressures, aggressively price imports, domestic oversupply in transformer capacity
and slackening investment in power generation and core sector. A silver
lining has been that PGCIL ordering remains robust.
q The company enjoys significant premium compared to its domestic
peers. We value the stock at 26x CY12 earnings to arrive at a target price
of Rs 670 (unchanged). In view of the downside to the target price, we
maintain REDUCE.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.kotaksecurities.com/pdf/dmb/MorningInsight27022012.pdf
ABB LTD
RECOMMENDATION: REDUCE
TARGET PRICE: RS.670 CY12E P/E: 31.7X
q ABB reported a muted revenue growth of 6% yoy in the fourth quarter of
CY11 partly due to sluggish execution of long-cycle orders.
q The profitability has been bearing the brunt of exit-costs related to the
rural electrification business and execution of few strategic but low margin orders.
q The T&D equipment industry continues to reel under cost pressures, aggressively price imports, domestic oversupply in transformer capacity
and slackening investment in power generation and core sector. A silver
lining has been that PGCIL ordering remains robust.
q The company enjoys significant premium compared to its domestic
peers. We value the stock at 26x CY12 earnings to arrive at a target price
of Rs 670 (unchanged). In view of the downside to the target price, we
maintain REDUCE.
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