Buy ABB India, target price Rs 1090: Motilal Oswal

Motilal Oswal has given buy rating to ABB India with a target price of Rs 1090. The share price moved down by 0.44 per cent from its previous close of Rs 890.30. The stock’s last traded price is Rs 886.40.

ABB India Ltd., incorporated in the year 1949, is a Large Cap company (having a market cap of Rs 18902.23 Crore) operating in Engineering sector.

Financials
For the quarter ended 30-09-2019, the company reported a Consolidated sales of Rs 1723.76 Crore, up .89 % from last quarter Sales of Rs 1708.58 Crore and unchanged .00 % from last year same quarter Sales of Rs Crore. The Company reported net profit after tax of Rs 135.28 Crore in latest quarter.

Investment Rationale
ABB remains a pure play on the long-term Industrial Automation and ‘Make-in-India’ theme. The brokerage maintains Buy rating with TP of INR1,090, based on unchanged Mar’22E target PE multiple of 45x (at par with our target multiple for pure automation businesses and as justified by DCF; as well as ~min 1-year forward PE multiple for ABB over past 10 years). CY19 marked strong growth in services/export revenue, which is the key investment thesis for the longer term.

Promoter/FII Holdings
Promoters held 75 per cent stake in the company as of June 30, 2020, while FIIs held 3.8 per cent, DIIs 11.1 per cent and public and others 10.2 per cent.