April-June Q2 CY2024 HIGHLIGHTS
All values are Y-o-Y with April-June Q2 CY2023 comparison
- Robust order impetus with good mix of long and short cycle ones
- Steady revenue growth distributed across all segments
- Better margin orders, revenue mix, positive price development and optimizations drive profitability step up
- PAT up 50% for the quarter and 67% in H1 CY 2024 Y-o-Y
- Operational EBITA up 64% for the quarter and 74%for H1 CY2024 Y-o-Y
- Sustainability and green products training provided to more than 300 suppliers across 14 divisions
- Board approves an interim dividend of INR 10.66 per share
Commenting on the company’s performance, Sanjeev Sharma, Managing Director,
ABB India said,
“We are pleased to announce yet another quarter and half-year of solid profitable growth. Our track record of consistent double-digit revenue and margin growth, and a strong order backlog is testimony to the robust performance of all our division teams, the trust of our customers, and the steadfast support of our channel partners. We continue to focus on diversifying our offerings across the market segments and making strategic investments to capitalize on market opportunities. The positive market momentum and the national focus on energy transition and infrastructure bodes well with ABB India's energy efficiency portfolio, allowing us to leverage the momentum to make inroads and strengthen our offerings in this space. “Sustainability in practice” continues to be central to our business operations as we prioritize our actions in line with the ABB Group's Sustainability Strategy."
KEY FIGURES INR Crores (for continuing business)
Q2 2024 | Q2 2023 | Q1 2024 | H1 2024 | H1 2023 | CY 2023 | |
Orders | 3,435 | 3,044 | 3,607 | 7,042 | 6,169 | 12,319 |
Order backlog | 9,517 | 7,727 | 8,935 | 9,517 | 7,727 | 8,404 |
Revenues | 2,831 | 2,509 | 3,080 | 5,911 | 4,920 | 10,447 |
Profit before tax | 594 | 393 | 617 | 1,211 | 721 | 1,659 |
Profit before tax % | 21.0 | 15.7 | 20.0 | 20.5 | 14.7 | 15.9 |
Profit After Tax | 443 | 296 | 460 | 902 | 541 | 1,248 |
Profit after tax % | 15.7 | 11.8 | 15.0 | 15.3 | 11.0 | 11.9 |
Operational EBITA* | 558 | 341 | 514 | 1,072 | 615 | 1,384 |
Operational EBITA% | 19.7 | 13.6 | 16.7 | 18.1 | 12.5 | 13.3 |
Orders
Total orders for the quarter were at INR 3,435 crore and INR 7,042 crore for H1 CY2024. During the quarter, long cycle orders from emerging (e.g. data centers, renewables, electronics, metro & railways) as well as core industry segments contributed to the growth. Most business areas posted a significant double-digit growth in orders. Process Automation had good traction in service orders which partially offset the impact of one-time large metal segment order received in Q2 CY2023.
From the market side, along with power distribution solutions for a large data center, transportation, mobility and automotive segments were the key contributors. Transportation included traction technology orders from railways and metro and automotive primarily constituted robotics solutions for the EV vehicle segment. While minerals and mining seem to consolidate, metals provided traction to the order inflows. There was also solid demand for power distribution equipment from metros in two cities to metals company, and solar project in Gujarat. Export and service orders enhanced growth with precision equipment export order for a specialized chemical EPC and service order for gas insulated switchgears from energy majors for the quarter. Terminal automation system and blending solutions for energy majors also provided significant business opportunity during the quarter.
Order Backlog
As of end of this quarter, ABB India continues to have a strong order backlog of INR 9,517 crore distributed across segments, providing good revenue visibility, and is well aligned to support growth plans in the coming quarters.
Revenue
The Company reported INR 2,831 crore revenue for the quarter and INR 5,911 crore for H1 2024. Another quarter with strong growth across all Business Areas. Electrification continued seamless execution with a solid backlog across divisions, Motion had higher revenues for propulsion products and high dynamic performance motors. Process Automation had higher service revenues from energy sector. Robotics and Discrete Automation had greater automotive orders which were executed last year in the second quarter. The slight dip sequentially was primarily due to the efforts to align with the customer delivery schedule. The revenues from domestic demand continued to maintain its share as in the earlier periods. Focus to remain on optimizing value chain, timely deliveries with adequate capacities to fulfill market demand.
Operations
During the quarter, ABB India has introduced its latest IEC Low Voltage IE4 cast iron super premium efficiency motors and IE3 Aluminum Motors for reliable and energy efficient solutions. Launched on global platform and manufactured in India, these motors are tailored for a range of industries including water & wastewater, packaging, food & beverage, metals, cement & mining, plastics & rubber, and HVAC applications. During this time, to enhance safety and operational efficiency in key infrastructure projects, ABB India has partnered with Witt India to deliver state-of-the-art tunnel ventilation solutions, setting new benchmarks in tunnel ventilation system. The quarter also marked 20 years of ABB’s AquaMaster electromagnetic flowmeters supporting the water industry in India. The flowmeter model is currently installed in water networks in more than 15 cities across eight states in India. The ABB miniature circuit breaker (MCB) also celebrated a century from its first development and programs were organized around the world to celebrate this milestone including India.
Profit and cash flow from operating activities
The company reported a Profit before tax (before exceptional items and one-offs) of INR 594 crore (up 51 percent) for the quarter and INR 1211 crore (up 68 percent) for H1 2024 Y-o-Y. The operational EBITA margin for the quarter was INR 558 crore (up 64 percent) and H1 CY 2024 was INR 1072 crore (up 74 percent) Y-o-Y. This was mainly driven by good revenue mix dimensioned over service, exports & customer segments and better margin orders. Positive price movement, cost optimization, steady material and commodity prices & a favorable exchange gain impact were some other catalysts for growth.
Tax charges for the quarter was INR 151.13 crore with an Effective Tax Rate (ETR) of 25.4 percent and for the half year it was INR 308.62 crore with an ETR of 25.5 percent.
Profit after tax reported at INR 443 crores for the quarter, up 50 percent Y-o-Y, and INR 902 crore for H1 2024, up 67 percent Y-o-Y.
The company’s cash position continues to remain healthy at INR 4,872 crore at the end of Q2 and H1 CY2024. The sequential lower cash balance was due to final dividend payout for CY2023. The Net Working Capital increase is mainly seen in inventories stocked to cater to the delivery of the backlog as per the agreed schedule.
EPS
The Company reported an EPS of INR 20.89 for the quarter and INR 42.58 for H1 CY 2024 (up from INR 25.53 in H1 CY2023) reflecting the growth in profitability of the operations.
Interim dividend
Considering the strong performance and cash position, the Board approved an interim dividend of INR 10.66 per share.
Sustainability in practice
The activities around sustainable operations continued with three out of five manufacturing locations having become water positive. Work is ongoing on water recyclability, zero waste to landfill and various parameters. Extensive online and in-person training was conducted on sustainability and green products with more than 300 suppliers across 14 divisions. ABB India's IEC low voltage (LV) motors business has achieved a significant milestone in energy conservation. Its installed base over the last five years has contributed to annual energy savings of over 500 gigawatt hours (GWh) for Indian industries which is equivalent to the annual energy consumption of the state of Sikkim.
Outlook
ABB India is well poised to leverage the projected strong domestic growth in the market with relatively stabilizing commodity prices, robust public investment and resilient private consumption. This is likely to be supported by mildly easing fiscal and monetary policies. The emerging and high growth segments like data centers, railways and metros are likely to provide the required momentum. While energy and metals segment remain growth drivers, some like mining and buildings are experiencing consolidation. Renewables, water and power distribution shall remain as other catalysts of business growth. The government’s continued focus on low carbon technology and energy transition across infrastructure, localization and transportation also augur well for the Company’s divisions.
ABB is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company’s solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered and operated. Building on over 140 years of excellence, ABB’s more than 105,000 employees are committed to driving innovations that accelerate industrial transformation. www.abb.com
