Result Update: ABB Ltd - ACCUMULATE - TP Rs.1621 - Kotak

ABB reported mixed set of numbers While the revenue surpassed our estimates, the margins came lower than estimates partly due to impact of transition to IND AS from CY17. However, the highlight of the quarterly numbers was the strong upsurge in order intake at 28% y-o-y. The management sounded positive on the business outlook and sees emerging opportunities in Oil and Gas, Cement, Power T&D and F&B.
On account of the strong order book and emerging opportunities in industrial and renewables segment, the company is well-positioned to deliver high double-digit growth in the medium term. Given the positive outlook, the stock has rallied strongly in the past three months - up 25% vs 5.6% rise in Sensex. Thus, while we remain broadly positive on the stock from a business perspective, valuations remain a constraining factor. We value the stock at 37x CY18 earnings (earlier 35x CY18 earnings), which is in line with exit multiple of Siemens and arrive at a price objective of Rs 1621 (Rs 1434 earlier). In view of the minor upside to target price, we recommend "ACCUMULATE" from "BUY" earlier, advising investors to buy the stock on declines.

Shares of ABB India Limited was last trading in BSE at Rs.1529 as compared to the previous close of Rs. 1598.8. The total number of shares traded during the day was 39153 in over 2900 trades.

The stock hit an intraday high of Rs. 1601 and intraday low of 1518.9. The net turnover during the day was Rs. 60499228.

Source : Equity Bulls

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