ABB India surges 8% to record high on upgrades, target price hikes by brokerages

Shares of ABB India surged nearly 8 percent in morning deals on February 22 to a fresh all-time high of Rs 5,373.80 on the NSE. The stock has been rising ever since the large-cap technology firm announced its financial results earlier this week. The sharp rally can be attributed to the ‘buy’ ratings and raised target prices from several brokerages.

Nomura has double-upgraded ABB India to ‘buy’ from ‘neutral’, given the company’s order outlook, and raised the target to Rs 5,740 from Rs 3,575 earlier, on account of rising convergence between automation, electrification, and premiumisation.

According to analysts, ABB‘s margin trajectory of 14-14.5 percent appears sustainable.

At 11:30am, ABB India shares were trading at Rs 5,322.05 on NSE, up 6 percent from the previous close.

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Jefferies put a ‘buy’ rating on the stock with a raised target price of Rs 6,115 per share. Despite a lower-than-expected EBITDA in the quarter due to a 7 percent revenue miss, ABB saw a notable increase in order flow, up by 35 percent on-year, indicating robust revenue growth prospects, the brokerage noted.

The company’s CY23 margins recorded a significant 303-basis-point increase to 14.3 percent.

ABB’s renewables segment has been identified as a high-growth area, and Jefferies anticipates operating leverage to continue to benefit from double-digit execution growth. In its latest report, UBS has also issued a buy’ call on ABB with a target price of Rs 5,380 per share.

The ABB management has expressed confidence in the company’s performance, particularly citing strong orders in motion/electrification product segments.

Additionally, the management highlighted high-growth segments such as rail and Metro, electronics, and data centres, alongside moderate-growth areas like renewables, auto, warehouse and logistics, and building/water infrastructure.

Conversely, segments like cement, steel, and pharma were identified as low-growth areas.

Also Read | ABB India stock price gains 5% on highest-ever Q4 topline

Over the past six months, ABB India’s stock price has risen around 23 percent, outperforming the frontline index Nifty 50 which has risen around 12 percent during the same time period.

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