Business executives face significant pressure to achieve results despite market challenges. Implementing automation offers a swift solution to enhance efficiency and productivity across all organizational departments.

Automation has emerged as a transformative force reshaping industries and societies worldwide. Businesses all around the world are embracing automation because it helps them save time, money, and resources while improving the quality of their products and services.

By integrating smart technology into everyday tasks, automation is transforming how things get done in industries like manufacturing, healthcare, and transportation.

In the exciting world of automation, ABB India stands out as a leader. They’re a global technology company dedicated to making society and industry better, using innovative solutions that blend software with electricity, robotics, and more. 

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ABB India’s goal is to push technology to its limits, driving performance to new heights. They’re at the forefront of creating smart factories, efficient energy systems, and cutting-edge infrastructure that makes life easier for everyone.

The stock of the company has performed exceptionally well over the last year giving a return of almost 100 percent. When looked at the longer time frame of three years, the stock has delivered a multibagger return of almost 360 percent.

Let’s delve deep into ABB India’s world and explore its business segments, financial performance, and future outlook. We’ll take a closer look at how ABB India’s innovative solutions are transforming industries, empowering businesses, and shaping the future of automation.

Join us as we uncover the intricacies of ABB India’s operations, analyze its financial health, and examine its vision for the future.

Corporate Overview Of ABB India

ABB India is a prominent worldwide technology firm that drives the evolution of society and industry towards a more productive, sustainable tomorrow. By integrating software with its offerings in electrification, robotics, automation, and motion, ABB continuously advances technological frontiers to elevate performance. 

Backed by a remarkable legacy spanning over 130 years, ABB’s achievements are propelled by approximately 105,000 skilled employees across more than 100 nations.

Business Segments Of ABB India

ABB India functions through a decentralized operating model. Its 19 divisions are segmented into four business areas: Electrification, Motion, Process Automation and Robotics & Discrete Automation.

Electrification

In the realm of electrification, ABB offers a comprehensive range of products, digital solutions, and services aimed at powering the world in a secure, intelligent, and sustainable manner.

These offerings encompass a diverse array of solutions, including electric vehicle (EV) infrastructure, modular substations, distribution automation, power protection, wiring accessories, switchgear, enclosures, cabling, sensing, and control systems.

The notable growth in this sector can be attributed to a favorable business landscape and a strategic approach tailored to effectively serve the market with the right channels and product offerings. As a result of these efforts, ABB’s electrification business witnessed significant expansion and gained market share in 2023.

During the fiscal year 2023, this segment contributed 39 percent of the total revenue, underlining its substantial impact on ABB’s overall performance and reaffirming its position as a key driver of growth within the company.

Motion

ABB’s Motion division plays a pivotal role in driving the movement of the world forward. As the leading provider of drives and motors worldwide, the company offers customers a comprehensive suite of electrical motors, generators, drives, and associated services. 

Additionally, ABB delivers integrated digital powertrain solutions, empowering customers to conserve energy daily and contribute to a low-carbon future. Serving an extensive array of automation needs across transportation, infrastructure, and both discrete and process industries, ABB leverages its domain expertise and cutting-edge technology to enhance performance, safety, and reliability.

In the fiscal year 2023, the Motion business showcased strong performance, buoyed by the expanding urbanization and industrialization trends, which drove up energy consumption levels.

In the fiscal year 2023, this segment accounted for approximately 36 percent of total sales, underscoring its significant contribution to ABB’s overall revenue.

Process Automation

ABB’s Process Automation sector empowers clients to manage some of the globe’s largest and most intricate industrial infrastructures, shaping the future of secure, intelligent, and sustainable operations. Through a wide array of automation, electrification, and digital solutions tailored for process and hybrid industries, ABB delivers industry-specific integrated control systems, software, as well as measurement and analytics solutions and services.

The Process Automation segment demonstrated robust performance throughout the year, propelled by emerging opportunities across various sectors. These sectors encompassed city gas distribution, terminal automation, life sciences, metals & mining, and cement industries. In the fiscal year 2023, this division accounted for 21 percent of the total revenue.

Robotics & Discrete Automation

ABB’s Robotics & Discrete Automation division empowers companies to enhance their resilience, flexibility, and efficiency through a suite of value-added solutions in robotics, machine, and factory automation.

Driven by a commitment to innovation, ABB focuses on pioneering advancements in artificial intelligence, fostering a dynamic ecosystem of digital partnerships, and expanding production and research capabilities.

In the fiscal year 2023, this segment accounted for approximately 4 percent of total sales.

Financials Of ABB India

Dec 23Dec 22Dec 21Dec 20
Revenue (in ₹crore)10,4468,567.536,9345,820.95
Net Profit (in ₹crore)1,248.181,025.61532.49230.44
ROE22.82%17.01%11.30%4.89%
ROCE30.39%22.87%15.97%7.11%

In the calendar year 2023, ABB India saw a substantial increase in revenue, surging by 22% to reach ₹10,446 crore as opposed to ₹8,567.53 crore in CY2022. Analyzing a span of four years, encompassing CY2020 to CY2023, the company displayed a  Compound Annual Growth Rate (CAGR) of 21.52% in revenue.

Simultaneously, there was a noteworthy upturn in net profit, experiencing a 22% increase from ₹1,025.61 crore in CY2022 to ₹1,248.18 crore in CY2023. Over the cumulative four-year period from CY2020 to CY2023, the net profit showcased 75.62% CAGR.

In CY23, ABB India maintained favourable financial metrics with a Return on Equity (ROE) of 22.82% and Return on Capital Employed (ROCE) of 30.39%.

Future Plans Of ABB India

Increasing Share of High Growth segment to Improve Margins

ABB’s business distribution is divided between domestic operations, which make up 85%, and exports, contributing 15%. Within the domestic sector, about 50-55% originates from core industries like cement and steel, while the remaining 40-45% comes from emerging high-growth sectors.

Significantly, ABB enjoys a commanding position in electrification and motion, allowing the company to impose premium pricing. There’s an expected transition in ABB’s business mix, prioritizing high-growth and high-margin sectors to maintain a double-digit Profit After Tax (PAT) margin trajectory.

Expansion in High Growth Areas

ABB India is venturing into high-growth sectors such as electrification and motion, targeting both domestic and export markets. The company is actively investing in the automation of existing shop floors to enhance productivity. 

Moreover, ABB has recently established a substantial Gas-Insulated Switchgear (GIS) factory, aligning with the market trend favoring GIS switchgear in the medium voltage segment. These strategic moves underscore ABB’s dedication to technological innovation and adaptability to market dynamics.

Positioned Advantageously to Capitalize on Energy Efficiency Efforts.

ABB India is poised to reap the rewards of the increasing emphasis on energy efficiency within government infrastructure projects, which are slated to incentivize the uptake of cutting-edge technologies. Building upon its ten-point action plan unveiled last year, ABB is actively supporting companies in bolstering their energy efficiency measures.

Strategically, ABB is channeling investments to align with its objectives, with a keen focus on energy-saving endeavors across key industries such as chemicals, oil and gas, steel, aluminum, and cement. 

Notably, a major player in the oil and gas sector has committed 40% of its cash flows to an ambitious energy transition initiative, with the goal of slashing fossil fuel production by 40% and integrating renewable energy sources.

Conclusion

ABB India’s innovative solutions and strategic initiatives position it strongly for future growth. By focusing on high-growth segments, energy efficiency, and automation, the company is well-aligned with market trends. With robust financials and a proven track record, ABB India seems poised for continued success.

What are your thoughts on ABB India’s future prospects and its role in driving automation and sustainability across industries?

Written by Nalin Suriya

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