Sell ABB Ltd - Quarterly Results - Kotak

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

- Reduced order backlog and lower 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, domestic oversupply in transformer capacity and slackening investment in power generation and core sector. We maintain negative stance on the T&D equipment makers like ABB and CGL.

- We value the stock at 30x one year forward earnings, thus arriving at a price target of Rs 386 (Rs 402 earlier). In view of the steep downside to target price, we maintain Sell on the stock.

Source : Equity Bulls

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