ABB Ltd - Result Update - Kotak sec

- Earnings lower than expected on account of continued pressure on profitability.

- Reduced order backlog and revenue visibility does not auger well for the stock as we see risk of weak profit numbers continuing in the near term.

- The T&D equipment industry continues to reel under cost pressures, aggressively bids quoted by players, domestic oversupply in transformer capacity and slackening investment in power generation and core sector. We remain negative on the T&D equipment makers like ABB and CGL.

- We value the stock at 26x one year forward earnings, thus arriving at a price target of Rs 402 (Rs 405 earlier). In view of the steep downside to target price, we maintain Sell on the stock.

Source : Equity Bulls

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