ABB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | ABB | Market Cap | 1,53,210 Cr. | Current Price | 7,230 ₹ | High / Low | 7,825 ₹ |
| Stock P/E | 91.8 | Book Value | 370 ₹ | Dividend Yield | 0.54 % | ROCE | 29.9 % |
| ROE | 22.4 % | Face Value | 2.00 ₹ | DMA 50 | 6,500 ₹ | DMA 200 | 5,845 ₹ |
| Chg in FII Hold | 0.55 % | Chg in DII Hold | 0.13 % | PAT Qtr | 434 Cr. | PAT Prev Qtr | 409 Cr. |
| RSI | 63.1 | MACD | 307 | Volume | 3,43,755 | Avg Vol 1Wk | 3,26,681 |
| Low price | 4,638 ₹ | High price | 7,825 ₹ | PEG Ratio | 3.08 | Debt to equity | 0.01 |
| 52w Index | 81.3 % | Qtr Profit Var | -18.4 % | EPS | 78.7 ₹ | Industry PE | 37.9 |
📈 Positive
- Large market capitalization of ₹1,53,210 Cr. ensures scale and stability.
- Strong ROCE (29.9%) and ROE (22.4%) highlight efficient capital utilization.
- Very low debt-to-equity ratio (0.01) indicates robust financial health.
- EPS of ₹78.7 reflects consistent earnings power.
- Dividend yield of 0.54% provides modest shareholder returns.
- FII holdings increased (+0.55%) and DII holdings rose (+0.13%), showing investor confidence.
⚠️ Limitation
- High P/E ratio of 91.8 vs industry average of 37.9, signaling overvaluation.
- PEG ratio of 3.08 suggests growth is priced expensively.
- Quarterly profit variation of -18.4% indicates earnings volatility.
- RSI at 63.1 shows moderately overbought conditions.
- Current price ₹7,230 is near upper valuation band, limiting upside potential.
🚨 Company Negative News
- Decline in quarterly profit variation (-18.4%) raises concerns about earnings consistency.
- Elevated valuations may deter fresh institutional inflows.
🌟 Company Positive News
- PAT improved to ₹434 Cr. from ₹409 Cr., showing steady growth.
- Increase in both FII and DII holdings reflects broad investor confidence.
- Strong operational efficiency supported by high ROE and ROCE.
🏭 Industry
- Industry P/E at 37.9 is far below ABB’s valuation, highlighting premium pricing.
- Sector growth remains steady, driven by infrastructure and automation demand.
- Competitive advantage lies in ABB’s global brand, diversified product portfolio, and technology leadership.
📝 Conclusion
ABB demonstrates strong fundamentals with excellent ROE/ROCE and minimal debt, but valuations remain stretched. Earnings growth must sustain to justify premium multiples.
🔑 **Entry Zone:** Attractive near ₹6,950–7,000 if valuations cool down.
📌 **Long-term Holding Guidance:** Existing holders can maintain positions with a 3–5 year horizon, but consider partial profit booking near ₹7,200–7,300 if valuations remain elevated.
This structured report balances ABB’s strong fundamentals with its valuation risks. Would you like me to extend this into a sector overlay comparison with peers like Siemens India and Honeywell Automation to highlight relative efficiency and valuation gaps?