ABB - March 2013 Results Preview - Motilal Oswal

- We expect profitability would remain under pressure, particularly in project businesses impacted by higher competitive intensity, slower execution and execution of low margin fixed price contracts.

- Order book stands at INR81.8b, down 10% YoY, as the company has not received any meaningful large orders in the current year. We expect the order intake to grow by 16% YoY in CY13, over a low base.

- ABB is ramping up its manufacturing capacity in MCB and high voltage products.In process automation, company is making efforts to build a service portfolio that will provide stability to margins. We believe that correcting the manufacturing footprint will be the key driver for structural improvement in margins.

- 'Perform Achieve Trade' is likely to increase traction in drives (~10% of ABB's revenue). Exports (~15% of revenue) continue to grow at a healthy 20%+ growth rates. Maintain Neutral.

Source : Equity Bulls

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