ABB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | ABB | Market Cap | 1,41,767 Cr. | Current Price | 6,690 ₹ | High / Low | 7,825 ₹ |
| Stock P/E | 93.1 | Book Value | 370 ₹ | Dividend Yield | 0.60 % | ROCE | 29.9 % |
| ROE | 22.4 % | Face Value | 2.00 ₹ | DMA 50 | 6,565 ₹ | DMA 200 | 5,955 ₹ |
| Chg in FII Hold | 0.55 % | Chg in DII Hold | 0.13 % | PAT Qtr | 342 Cr. | PAT Prev Qtr | 420 Cr. |
| RSI | 46.6 | MACD | -88.6 | Volume | 5,23,069 | Avg Vol 1Wk | 4,59,797 |
| Low price | 4,638 ₹ | High price | 7,825 ₹ | PEG Ratio | 3.13 | Debt to equity | 0.01 |
| 52w Index | 64.4 % | Qtr Profit Var | -25.2 % | EPS | 140 ₹ | Industry PE | 34.7 |
📊 Financials: ABB India shows strong fundamentals with ROE at 22.4% and ROCE at 29.9%, reflecting efficient capital usage. Debt-to-equity is extremely low at 0.01, indicating a virtually debt-free balance sheet. Quarterly PAT fell to ₹342 Cr. from ₹420 Cr., showing a -25.2% variance. EPS stands at ₹140, supported by consistent profitability.
💰 Valuation: The stock trades at a high P/E of 93.1 compared to the industry average of 34.7, suggesting overvaluation. P/B ratio is ~18.1 (Price ₹6,690 / Book Value ₹370). PEG ratio of 3.13 indicates expensive growth expectations. Intrinsic value appears lower than current price, making entry less attractive at present levels.
🏢 Business Model: ABB India operates in power, automation, and industrial solutions, benefiting from infrastructure growth and electrification trends. Its competitive advantage lies in global brand strength, advanced technology, and diversified industrial offerings. Overall health is solid, supported by strong returns and minimal leverage.
📈 Entry Zone: A more attractive entry would be near ₹5,000–5,500, closer to its 52-week low. Current valuation is stretched. Long-term holding is favorable given strong fundamentals, but investors should wait for better valuation levels before fresh entry.
Positive
- 📌 Strong ROE (22.4%) and ROCE (29.9%)
- 📌 Virtually debt-free (Debt-to-equity 0.01)
- 📌 EPS of ₹140 reflects consistent earnings
- 📌 FII holdings increased (+0.55%)
Limitation
- ⚠️ High P/E ratio (93.1) vs industry average (34.7)
- ⚠️ Expensive P/B ratio (~18.1)
- ⚠️ PEG ratio of 3.13 signals costly growth
- ⚠️ Dividend yield of 0.60% is modest
Company Negative News
- 📉 Quarterly PAT declined (-25.2% variance)
Company Positive News
- 📈 Increase in FII holdings (+0.55%)
- 📈 Stable DII holdings (+0.13%)
Industry
- 🏦 Industry PE at 34.7, far below ABB India’s valuation
- 📊 Industrial automation and electrification sectors benefit from infrastructure expansion in India
Conclusion
🔎 ABB India is a fundamentally strong company with excellent return ratios and negligible debt. However, current valuations are stretched. Entry is advisable near ₹5,000–5,500. Long-term holding is favorable given the company’s diversified business model and strong fundamentals, but investors should be cautious about valuation risks.
Would you like me to also prepare a valuation comparison chart between ABB India and industry peers to visualize the premium it trades at?