ABB India recorded a 50% surge in order inflows, pushing its backlog to a record ₹119 billion. While strong demand in data centers and infrastructure drives growth, margin pressure remains a factor as raw material costs weigh on profitability.
ABB India has reported a significant increase in its order book, which now stands at a record ₹119 billion. This surge is primarily supported by a 50% year-on-year rise in order inflows, highlighting strong demand across the company's key business segments. The Electrification division, in particular, saw a 77% jump in orders, with notable contributions from data centers, infrastructure, and the metals and mining sectors.
Revenue Growth vs. Margin Challenges
In its recent financial performance, the company reported a 21% year-on-year increase in revenue, reaching ₹35.6 billion. Despite this growth, profitability metrics faced some pressure. The EBITDA margin, which measures operating profit as a percentage of revenue, contracted by 108 basis points to 12.6%. This decline is linked to external pressures, including volatility in foreign exchange rates and rising raw material costs, such as copper. Analysts have noted that while these cost pressures are present, the company is attempting to offset them through price adjustments and by resolving past disruptions related to Quality Control Orders.
Order Execution and Growth Drivers
With a record backlog in place, the company expects to execute approximately 40% of these orders within the next two quarters. The Motion segment remains a steady contributor, supported by demand from railway and industrial applications, while Process Automation continues to benefit from orders in the marine and power sectors. A major factor driving long-term confidence is the rise of data centers, where ABB India is seeing sustained inquiries from both hyperscalers and colocation providers. The company’s focus on localization and capacity expansion at its newly commissioned facility in Nelamangala is aimed at supporting this increased demand.
Valuation and Market Context
Brokerage firm Prabhudas Lilladher recently maintained a 'Hold' rating on the stock, while revising its target price to ₹6,944. The valuation is based on projected earnings for June 2028, reflecting a balance between strong order momentum and the risks posed by commodity inflation. The stock is currently trading at a price-to-earnings (P/E) multiple of 67.3x for FY27E and 55.5x for FY28E.
For investors, the key areas to watch will be the pace at which the company converts its record order backlog into revenue and whether it can successfully improve its profit margins despite ongoing cost pressures in the global commodity market. The company's ability to maintain its competitive edge in the high-growth data center space will remain a critical monitorable for future performance.