ABB stock surges 8%, brokerages increase target price

ABB India stock has surged 8.25 per cent on the NSE, trading at ₹5,395.75 as of 1.28 pm on Thursday. The stock has hit a 52-week high today at ₹5,410.

On the BSE, the stock traded at ₹5,396.40, higher by 8.16 per cent as of 1.28 pm.  

The stock has continued to rise since the company announced its financial results for the quarter and year ended December 2023 on Tuesday. The company’s board has recommended a final dividend of ₹23.80 per share of face value of ₹2 each for the financial year ended December 31, 2023, subject to shareholders’ approval at the ensuing AGM.

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It posted a 13 per cent rise in Profit After Tax (PAT) to ₹345 crore in the December quarter. Its total revenue rose to ₹2,757 crore (₹2,427 crore) in the year-ago period.

Brokerages recommend ‘buy’

Following the strong financial performance, brokerages have reiterated their ‘buy’ stance with a higher target price for the stock.

Jefferies has recommended ‘buy’ rating and has increased the target price to ₹6,115, given that the order flow was up 35 per cent y-o-y, indicating robust revenue growth prospects. It said that the margins were flattish at 10 bps y-o-y improvement, but CY23 margins were up 303 bps y-o-y at 14.3 per cent.

Noting the upbeat in ordering outlook, Nomura has given a ‘buy’ rating for the stock and has increased the target price to ₹5,740. The analysts have stated that the margin trajectory of 14.0-14.5 per cent appears sustainable.

UBS has also given a ‘buy’ rating with a target price of ₹5,380.

However, analysts of Yes Securities Institutional Equities have downgraded the stock to ‘add’ from ‘buy’ rating, given the target price at ₹5,250. “We expect the company to report revenue CAGR of 21% over CY23-25 while EBITDA margin is expected to remain at similar levels with operating leverage benefit being a lever to compensate the risk of higher commodity prices,” the report said.

Analysts of Nuvama Institutional Equities quoted in a report that the company has missed street’s sales/EBITDA estimates by 8 per cent /2 per cent as sales growth/OPMs slowed across segments. “Base orders (higher revenue mix) are slowing while high growth new-age areas have low mix,” it added. The analysts have retained a ‘hold’ call on the stock and said, “We revise CY24/25E EPS by 6/3 per cent (~12.8-13% OPMs), roll forward to Mar-26 EPS at 70x to a revised TP of ₹4,860 from the earlier ₹4,585).