ABB India saw record order inflows of ₹4,363 crore in the June quarter, a 50% year-on-year rise. While revenue growth was strong, operational profit margins faced pressure due to rising material costs and currency volatility. To reward shareholders, the company announced a special dividend of ₹90 per share, backed by a cash balance of ₹7,243 crore.
ABB India released its second-quarter results for the calendar year 2026, showing a mix of strong business growth and persistent operational challenges. The company achieved record order inflows of ₹4,363 crore, marking a 50% increase compared to the same period last year. Revenue also saw a healthy rise of 21%, reaching ₹3,559 crore. Despite this top-line performance, the company’s net profit grew by a modest 3% to ₹362 crore.
Margin Pressures and Financial Context
While the company continues to win new business, its operational profit margins have been under pressure, contracting to approximately 12.6%. CFO TK Sridhar explained that recovery in margins will take time. This is primarily due to rising costs for essential raw materials like copper and silver, along with challenges from currency fluctuations and global geopolitical uncertainty. For investors, this means that while the business is expanding in volume, the costs associated with that growth are currently impacting the company’s ability to improve its bottom-line profitability quickly.
Cash Position and Special Dividend
One significant highlight for shareholders is the company’s decision to announce a special dividend of ₹90 per share. This payout is supported by the company’s robust balance sheet, which holds cash and cash equivalents of ₹7,243 crore. A portion of this strong cash position stems from the earlier divestment of the company's Robotics business. This move provides immediate value to shareholders despite the ongoing margin challenges.
Growth Drivers and Future Outlook
Data centers have emerged as a vital growth area for ABB India, accounting for 15-17% of the total order book. Managing Director Sanjeev Sharma noted that demand in this segment is high, and the company is actively investing in capacity to meet these needs. These projects are attractive because they often move quickly from order to revenue, sometimes within five to six months.
To support this growth, the company plans to maintain its annual capital spending of ₹300-350 crore. The focus is on operating facilities at 85-90% utilization to ensure that there is enough room for future demand. The company is actively working to narrow the gap between its local order inflows and the global parent's performance, although some global contracts are still booked directly by the parent entity.
Investors will likely track whether the company can successfully pass on raw material costs or if commodity price volatility continues to limit margin expansion in the coming quarters. The next important update will be management's commentary on how global price stabilization impacts their operating margins in the second half of the year.