ABB - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.6

📊 Fundamental & Valuation Analysis

ABB India is a well-established player in industrial automation and electrification, but its current valuation and return metrics raise caution for long-term investors.

🔍 Key Metrics

Metric Value Interpretation

ROE 5.45% Weak return on equity

ROCE 9.77% Below industry average

PEG Ratio — Not available; hard to assess growth-adjusted valuation

Dividend Yield 0.79% Low income generation

Debt-to-Equity 0.01 Virtually debt-free

P/E Ratio 844 Extremely overvalued vs industry PE of 57.2

Price-to-Book ~28.3 Very expensive on book basis

📈 Growth & Profitability

EPS: ₹6.65 — low earnings base for current price

PAT Growth: ₹146 Cr vs ₹79.7 Cr — strong QoQ growth

Revenue: ₹3,159 Cr — stable but not explosive

Dividend Payout: ₹33.50 final + ₹10.66 interim

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📉 Technical & Trend Analysis

Current Price: ₹5,579

RSI: 38.4 — nearing oversold zone

MACD: -77.8 — bearish momentum

DMA 50/200: ₹5,787 / ₹6,073 — trading below both

Volume: Slightly below average — weak buying interest

📌 Ideal Entry Price Zone

Support Levels: ₹4,900 and ₹4,600

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Fair Entry Range: ₹4,800–₹5,200

Avoid entry above ₹6,000 unless fundamentals improve

Current price is still expensive relative to earnings

🧭 Exit Strategy & Holding Period

If you already hold the stock

✅ Hold If

You believe in ABB’s long-term automation and electrification story

You expect spin-off of ABB Robotics in 2026 to unlock shareholder value

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You’re comfortable with low ROE and high valuation

🚪 Exit Strategy

Short-Term Exit: If price rallies near ₹7,000–₹8,000 without earnings support

Hold Period: 2–3 years until spin-off materializes and valuation normalizes

Re-evaluate: If ROE stays below 10% or P/E remains above 100

🧠 Final Verdict

ABB India is a strategic industrial player with global backing and zero debt, but its valuation is unjustifiably high and return metrics are weak. The upcoming robotics spin-off in 2026 could be a catalyst for value unlocking, but until then, the stock remains overpriced for its current fundamentals.

Ideal for existing holders with patience, but not a fresh long-term buy at current levels.

Would you like a side-by-side comparison with Siemens or CG Power to evaluate better industrial alternatives?

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moneycontrol.com

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NewsBytes

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in.tradingview.com

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new.abb.com

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business-news-today.com

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