ABB posted a set of not-too enthusing numbers for first quarter ended 31^st March 2013. The company, sequentially, posted a 4% decline in net sales at Rs.1963 crore but smart cost management helped, wherein operating profit was down 7%. Operating costs were a big drag in previous quarter and it is good that this has since then been capped. It ended the quarter with a net profit at Rs.42 crore, up almost 2.5 times on QoQ but YoY, it was down 12.5%.

What is also to be noted is that the company’s interest outgo has increased substantially; during the current Q1 it was at Rs.19.75 crore, up from Rs.5.40 crore (YoY) and tad higher than Rs.18.47 crore for Q4. Tax expense was also hefty at Rs.21 crore but seasonally, Q1 the tax outgo is high as in previous Q1 also, it was much higher at Rs.24 crore.  Its order intake was down 8% at Rs.1531 crore (YoY). The company has stated that orders from smaller, short cycle projects remained good but delay was mainly from larger projects, with most customers preferring to wait and watch before making large investments. Its order backlog as at 31^st March 2013 stood at Rs.8229 v/s Rs.9028 crore in Q1 of 2012.  Looking ahead, the company has leveraged new business streams such as solar, data centers and energy efficiency solutions. It has decided to reposition its power systems business for higher profitability by adopting a business model in line with the global strategy of having higher ABB content in projects with appropriate risk return profile. The company remains cautiously optimistic about the long term potential of the Indian market.