ABB Power Products has an exciting portfolio of products and services, which has got further contemporaneity with Hitachi’s focus on mobility, smart cities, industry, energy storage, and data centers… As the overall power sector grows and moves up on the value chain, this company should emerge to be a significant beneficiary.
But the proof of the pudding is in eating it and in that respect, company sales growth numbers and that too in the right segments will need to be carefully watched. How the margins improve will clearly determine what kind of returns this stock provides
Its balance sheet also needs to cleanse and strengthen, the process that it has already begun, the with the provision of Rs 60.48 Crs taken in Q3. Can the issue of high working capital intensity be addressed – it has both high debtors and inventory on the asset side and high payables on the liability side
We as capital allocators have a choice between Honeywell and ABB Power
The company has a strong investor engagement programme, which can become even more productive if granular data can be shared