T&D along with transportation sector to drive co's future growth: ABB India's CEO Sanjeev Sharma

In a chat with ET Now, Sanjeev Sharma, CEO & MD, ABB India says transmission and distribution along with transportation sector including railways, metros and electric vehicles will drive the company's future growth. He expects the industry's growth to stay slightly muted in the next fiscal as well.

Edited excerpts.

It has been a fairly decent quarter for you. What were your profit and revenue drivers for the quarter?


Yes, we had a very good 2016. Our orders and revenues grew very well. The segments that contributed most were utilities, transportation and infrastructure, and our industrial segments.

Margins have been commendable. What drove your margins and where do you see margins heading?

Our robust revenues contributed to our increasing profitability. Apart from that, our operational excellence programme, which we started in 2016, have also contributed positively to our profitability and also in execution of the projects business,

Order flows for the year have been strong. From where have you received maximum orders and how much do you see order book growing?

In term of orders, ABB India had a landmark year 2016. We grew at 54 per cent compared to 2015 and for the first time our country business grew about Rs 10,000 crore. As a matter of fact, we closed our order books at Rs 12,400 crores in 2016. So, it was a fantastic year for us. Growth in our base orders was the major contributor, plus we also received significant large orders including the RP 800, Raigarh-Pugalur order. It is a 800 KV high voltage transmission link between Raigarh and Pugalur, spanning across 1800 km. Linking southern India with central India, the transmission line will transfer about 6 GW of power.

How is the revival of capex across your infrastructure sector boosted the order growth. What are the orders in the pipeline that you have?

Our ongoing capital expenditure on the infrastructure segment as well as transportation segment have contributed to our growth, especially the railway segment, metros and also the emerging space in the electric vehicle charging. The expenditures on these segments were the significant drivers apart from the spend that is taking place on the renewables.

What is the outlook for the industrial, and transmission and distribution (T&D) sectors. What sectors will drive growth for the company?

We believe that India will continue to invest in T&D infrastructure to fulfil the dream of delivering 24x7 power to all and there is already a significant amount of investments in that area. A lot of smart technologies are being deployed to ensure that the traditional thermal generation, the transmission and also the intermittent renewables in different parts of the country can be integrated into the grid. A lot of smart technologies are being deployed and we are seeing a good uptick there.

The other area we expect to grow is transportation. We see a lot of demand, especially railways, metros and also the electric vehicles. On the industrial side, I believe there will be continuous investment on the increase in productivity and energy efficiency. These are the significant areas we expect that will contribute to our growth. Apart from that, emerging industrial segments like food and beverage is another segment that is expected to fuel our growth among others.

What is your take on infrastructure allocation in the Budget and did you expected more from Budget?

We really liked the Budget. It will set the future trends, the government is making their intentions very clear. The impact they are intending to bring in the significant areas will contribute to the future growth. We liked the allocations as well as the trends in allocation. So overall, we liked the Budget.

What is your guidance for FY18.

As a company policy, we do not give the guidance, but going forward we expect significant investment in T&D and we also feel the transportation infrastructure segment will continue to do well. At the moment, the industry is slightly muted and I think it will stay muted in the next fiscal as well. I feel, as the undergoing restructuring in the industrial segments gets completed, especially in the core sector, it will be just a matter of time that it will start adding to the India growth story.