Macquarie Research initiates 'underperformer' rating on ABB
Macquarie Research has initiated coverage on ABB India with an ‘underperformer’ rating saying ABB has traded at a significant premium to peers in the power sector equipment space.
By ET Bureau |
ABB India
cmp: Rs 893.40
target price: Rs 728
Macquarie Research has initiated coverage on ABB India with an ���underperformer��� rating saying ABB has traded at a significant premium to peers in the power sector equipment space.
���We expect growth to moderate and multiples to come off,��� said Macquarie in a note to its clients. Macquarie expects the company���s growth to mod-erate to 26% CAGR over CY08-10.
���We expect ABB���s growth to come in line with BHEL���s (proxy to generation sector investment) projected growth. Our projected topline growth over CY08-10 is 26%, against 42% over CY05-07,��� the note said. According to Macquarie, ABB has built-in price escalation clauses in its contracts and has also hedged key raw materials such as copper.
���We expect margins to remain stable on pass through clauses, earnings growth around 27%,��� the note added.
cmp: Rs 893.40
target price: Rs 728
Macquarie Research has initiated coverage on ABB India with an ���underperformer��� rating saying ABB has traded at a significant premium to peers in the power sector equipment space.
���We expect growth to moderate and multiples to come off,��� said Macquarie in a note to its clients. Macquarie expects the company���s growth to mod-erate to 26% CAGR over CY08-10.
���We expect ABB���s growth to come in line with BHEL���s (proxy to generation sector investment) projected growth. Our projected topline growth over CY08-10 is 26%, against 42% over CY05-07,��� the note said. According to Macquarie, ABB has built-in price escalation clauses in its contracts and has also hedged key raw materials such as copper.
���We expect margins to remain stable on pass through clauses, earnings growth around 27%,��� the note added.
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