ABB - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 4.0

📊 Core Financials

• Revenue & Profitability: PAT rose from 352 Cr. to 409 Cr., though quarterly profit variation shows -7.17%.
• Margins: Strong ROE at 28.8% and ROCE at 38.6% reflect excellent efficiency and profitability.
• Debt: Debt-to-equity ratio of 0.01 indicates virtually debt-free operations.
• Cash Flow: Dividend yield of 0.87% provides modest but stable shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 62 vs Industry PE of 43.9 — trading at a premium.
• P/B Ratio: Current Price 5,170 ₹ vs Book Value 340 ₹ → ~15.2x, expensive.
• PEG Ratio: 0.98, suggesting valuation is somewhat aligned with earnings growth.
• Intrinsic Value: Current valuation is stretched but supported by strong fundamentals.

🏢 Business Model & Competitive Advantage

• ABB operates in electrification, automation, and robotics — key growth areas in industrial technology.
• Competitive advantage lies in global expertise, innovation, and strong presence in India’s infrastructure and industrial automation market.
• Healthy balance sheet and strong return metrics support long-term sustainability.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive near 4,600–4,900 ₹ range, closer to support levels and below DMA 200.
• Long-Term Holding: Strong fundamentals and industry positioning make ABB suitable for long-term holding, though valuations are slightly high.

✅ Positive

• High ROCE (38.6%) and ROE (28.8%) show strong efficiency.
• Virtually debt-free (Debt-to-equity 0.01).
• Consistent PAT growth with strong operational performance.

⚠️ Limitation

• High P/E (62) and P/B (~15.2x) make the stock expensive compared to peers.
• Dividend yield (0.87%) is modest, limiting income appeal.
• Quarterly profit variation (-7.17%) shows some volatility.

📉 Company Negative News

• FII holding reduced by -0.96%, showing slight decline in foreign investor confidence.
• Quarterly profit variation indicates short-term earnings pressure.

📈 Company Positive News

• DII holdings increased (+0.65%), showing domestic institutional support.
• Strong PAT growth from 352 Cr. to 409 Cr.
• Stock trading near DMA 50, showing technical stability.

🌐 Industry

• Industry PE at 43.9, lower than ABB’s valuation, indicating premium pricing.
• Industrial automation and electrification sector benefits from infrastructure growth and digital transformation trends.

🔎 Conclusion

• ABB is fundamentally strong with excellent efficiency, profitability, and negligible debt.
• Valuations are stretched compared to industry peers, making current entry less attractive.
• Best suited for accumulation near 4,600–4,900 ₹ levels.
• Long-term investors can hold for strong growth prospects in industrial automation and electrification.