Healthy OI; EBITDA margin remains lackluster: Demand improves, margin recovery deferred; we estimate 12% PAT CAGR over CY25-28F; maintain Reduce due to rich valuations

研报英文原文证据摘录

Healthy OI; EBITDA margin remains lackluster: Demand improves, margin recovery deferred; we estimate 12% PAT CAGR over CY25-28F; maintain Reduce due to rich valuations

mpact of its price hikes

likely to be witnessed only after a lag. Given the margin headwinds, ABB is prioritising execution

and order booking. Thus, ABB’s EBITDA margin trajectory will be a key monitorable, in our view.

Relying on capacity expansion and product development to meet robust DC demand Source: LSEG, Nomura

According to management, ABB has consistently booked DC OIs in the past few quarters and a

substantial rise in demand from both hyperscale and colo DCs is likely given the strong pipeline of Research Analysts

DC projects. ABB aims to meet this robust demand through capacity expansion, localisation and India Capital Goods

product development. Given the high current capacity utilisation (80-85%), ABB is expanding Umesh Raut - NFASL

capacities and developing new products to meet the robust DC demand without constraints. umesh.raut@nomura.com

Trades at 77x CY27F EPS; maintain Reduce with a higher TP of INR6,500 +91 22 403 74035

Expecting an execution pickup due to the healthy 1QFY27 OI, we raise our CY26F/CY27F/CY28F Aritra Banerjee - NFASL

revenue estimates by 1%/9%/12%, which is offset by 180bp/115bp/55bp cut in EBITDA margin due aritra.banerjee@nomura.com

+91 22 672 34609to the headwinds. Thus, our CY26F/CY27F/CY28F PAT are -11%/-1%/+7%. We roll forward our

valuation to Jun-28F and maintain Reduce with an SOTP-based TP of INR6,500 (Fig.7). We

maintain Reduce as the stock currently trades at an expensive valuation of 77x CY27F EPS.

Year-end 31 Dec FY25 FY26F FY27F FY28F

Currency (INR) Actual Old New Old New Old New

Revenue (mn) 132,422 143,163 144,559 162,135 176,932 180,101 201,408