ABB
This MNC capital goods company did not have an enthusing second quarter ended 30th June 2013 ( year ending is 31st Dec) but its performance for Q3CY13 was stellar. It posted a 78% (YoY) rise in net profit at Rs.38 crore and this, rise was despite the whopping 131% surge in interest outgo and 76% jump in tax outgo. Sequentially, OPM was up 220 bps at 5.9%. Its total income was almost flat, actually down 1% at Rs.1786 crore. Its revenue from power systems was down 10% and that from power automation was down 4%. The other two segments – power products showed a growth of 1% and the discrete automation and motions segment rose 9%. EBIDTA was up 59%.
Order inflow for the quarter was at Rs.1762 crore, up 5% (YoY) and up 2% (QoQ). The company has stated that more than the conventional segments, orders are coming in from renewables, rail and exports. Order backlog as at 30th Sept 2013 stood at Rs.8252 crore. The huge interest outgo is a big concern and this is on account of increased short term borrowing for meeting higher working capital needs. Though the outlook as of now does not look too optimistic, the stock enjoys high investor fancy due to its Swiss parentage; as such MNCs quote at a much higher PE. The company, like the others in the sector is a victim of circumstances but fundamentally, remains solid. Number will improve once the economic macro environment improves.