ABB India Shares Rally To An All-Time High; Should You Buy, Sell Or Hold?

ABB India share price: ABB India shares surged to an all-time high on Thursday, February 22, for the second consecutive session after the large-cap technology firm announced its financial results and declared a dividend of Rs 23.8 per share on Tuesday.

The scrip surged nearly 8 per cent in morning deals 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.

Being upbeat on the order outlook, Nomura has double-upgraded ABB India to buy from neutral. The brokerage has raised the target to Rs 5,740 from Rs 3,575 earlier, given the rising convergence between automation, electrification, and premiumisation.

According to analysts, ABB’s margin trajectory of 14-14.5 per cent appears sustainable.

Jefferies has also maintained a buy call on ABB with a revised target price of Rs 6,115 from Rs 6,085 earlier, translating to an upside potential of 22.5 per cent on the stock.

According to Jefferies, 4QCY23 EBITDA is lower than expectations given a 7 per cent revenue miss. However, order flow is up 35 per cent year-on-year (YoY) and provides strong revenue growth visibility.

Margins were flattish at 10 bps; however, it saw an improvement, but CY23 margins were up 303 bps YoY at 14.3 per cent, the brokerage added.

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.

ABB India announced the final dividend of Rs 23.8 per share for the year ended December 31, 2023, subject to the approval of shareholders at the company’s 74th annual general meeting (AGM), scheduled to be held on May 11.

ABB India shares gave a return of over 50 per cent in the past year, sharply outperforming a 24 per cent rise in the headline Nifty50 index.