Well explained!! Coming to March 2025, what is your view on the growth here onwards. There was drop in the orders last qtr… well rewarded by Mr Market.
The decline was primarily due to the absence of large transportation sector orders, particularly from the railways and metro segment. In Q4 CY2023, ABB had received a one-time ₹600 crore transportation order, which was not repeated in Q4 CY2024. Without such large, lumpy orders, the total order inflow appeared lower YoY, despite steady demand in other areas.
The 14% decline in Q4 orders was primarily due to a one-off large order in Q4 CY2023, making the YoY comparison appear weak. However, ABB remains well-positioned with:
1)A strong ₹9,400 crore order backlog
2)Steady base order growth
3)Resilience in high-growth segments
4)Strong execution visibility for CY2025
Hence, despite the short-term dip, ABB expects to sustain its 17% revenue growth for the full year as per their concall. This is the managements explaination .
disc - not invested but tracking
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ABB india demerger is proposed can anyone pls provide insight about it.
I attended ABB Q2CY2025 Con call. ABB has been among my core holding since last 4 years. It has been great investment during last 4 years. The management of ABB India, based on my limited understading from various Con call I attended, is among the most honest, efficient and frank management. Over the years, in various con calls, they identify one key segment and provided better understanding for business.
The last con call, I found them being very frank about delay in large order adversely imacting business. Further, given the circumstances, the business would continue to face head wind, unless private sector capex revived. Given the circumstances and chellanges, I feel the recovery would take 15-18 months in my understnding.
While every business would go through to short to medium term chellange, the cyclical business along with headwind, trading at extremely optimist valuation and my personal requirement of fund (for rebalacing asset allocation), I found ABB was not fitting my risk return profile and hence exited from my holding.
Over my around 4 year holding, I realised actual XIRR of 26.7% (including dividend) and 25.9% (Excluding Dividend). Over my holding period, Sales of ABB increased at CAGR of 18.7%, p.a., Net profit increased by 59.4% p,a., Dividend increased at CAGR of 61.3% p.a. while price increased by 20.2% p.a. (The investment was 11 Feb 2021 as tracking position, which substantially increased during December 2021 and Feb 2022 to made to core position.)
Currently, exploring invesmtent the proceeds to Hybrid investment as may need funds to finance an investment in real estate. Overall, great journey for me to invest in ABB India and would be grateful to management for executing wonderfully during holding period. Wish ABB a great luck and would not hesistate to invest in case price materially decline and my risk return profile provide scope for equity allocation increase.
Disclosure: My view may be biased due to my recent exit from ABB India. I am not suggesting any investment action. I have been wrong mutiple time, specially when I ventured to forecast future. I am not SEBI registered advisor. Investor shall do his/her own due diligence before making any investment.
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