ABB India Ltd 2QCY26: Margin pressure continues

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ABB India Ltd

2QCY26: Margin pressure continues

Reiterate Rating: UNDERPERFORM | PO: 5,450 INR | Price: 7,285 INR

Earnings miss on weak margins

03 August 2026

ABB India reported 8% YoY growth in earnings (-5%/-8% miss on BofAe/street

estimates). While strong execution of their orderbook led to 21% YoY growth in revenue

(6% beat), EBITDA margin contraction of -108bps YoY (highlighted in our preview note )

due to material cost inflation, forex volatility & revenue mix led to the miss on earnings.

Margin pressures persist, headwinds to continue N-T

Commodity price inflation, rupee depreciation and supply chain disruptions due to the

West Asia crisis have impacted margins across all segments. Management believes

these headwinds are likely to continue and reversal of margins to mid-teen levels in the

near-term could be difficult as focus would be on execution and order development. On

price hikes, management highlighted the lag between material cost increase and product

price increase in the market along with certain challenges in customer acceptance of

these increased prices. While Quality Control Orders (QCO) impact has reduced due to

relaxation & extension by govt, the impact is not completely out of the picture yet.

Strong order inflow growth led by Electrification

Strong 50% YoY order inflow growth in Q2CY26 led by Electrification segment (+77%

YoY) with orders from Data centers (15-17% of base orders), Metals & Mining (15%),

Building and Infra (8%), Oil & gas (9%) and Renewables (6%). ABB India’s execution

speed due to presence of strong local partnerships & facilities has helped them win data

centers orders. On the buildings & infra front, company is seeing strong demand on the

commercial front while some sluggishness was seen on the residential side.

Increase order inflow estimates, cut margins, reit U/P

ABB has reported 36% order inflow growth in 1HCY26, given the strong visibility in

electrification segment (55% share), we increase order inflow estimates for ABB over

CY26-28E by 14-17%. That said, we cut margins for CY26-27E by 90-180bps on

guidance of N-T headwinds & believe valuation at 68x is close to peak valuation level

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