MARKETS

ABB tumbles as it sees margins under pressure

MoM Team / Mumbai, Feb 24, 02:54 PM

ABB tumbled 4.9% to Rs 833 at 14:53 IST on BSE after the company warned of margin pressure at the time of announcement of Q4 December 2011 results during trading hours on Thursday, 23 February 2012.

Meanwhile, the BSE Sensex was down 179.56 points, or 0.99% to 17,898.94.

On BSE, 82,000 shares were traded in the counter as against average daily volume of 18,204 shares in the past one quarter.

The stock hit a high of Rs 872.95 and a low of Rs 824 during the day. The stock had hit a 52-week low of Rs 541.10 on 20 December 2011. The stock had hit a 52-week high of Rs 915 on 17 February 2012.

The stock had outperformed the market over the past one month till 23 February 2012, rising 15.8% compared with the Sensex's 7.92% gain. The scrip had also outperformed the market in past one quarter, surging 49.32% as against Sensex's 15.15% gain.

The large-cap power and automation company has an equity capital of Rs 42.38 crore. Face value per share is Rs 2.

Today's decline in the stock comes after the scrip rose 1.21% to settle at Rs 875.90 on Thursday, 23 February 2012, on the back of strong Q4 results.

ABB said that rising input costs, tight liquidity situation, forex volatility and low price realization as witnessed in some sectors may continue to put pressure on the margins. ABB said that the company is continuing to take measures such as lowering its cost base and increasing operational performance and productivity to address any market developments and challenges.

ABB's profit after tax surged 842.6% to Rs 64.10 crore on 5.8% growth in revenue to Rs 2169.60 crore in Q4 December 2011 over Q4 December 2010. ABB's order inflow surged 58.46% to Rs 2209.30 crore in Q4 December 2011 over Q4 December 2010. The order inflow rose 28.96% to Rs 8188.80 crore in the year ended 31 December 2011 over the year ended 31 December 2010.

Success in some, large and medium power projects coupled with consistent double-digit growth in base orders contributed to the growth in the company's order intake during the year, the company said. A healthy mix of both short and long cycle orders and multi-pronged initiative to enhance overall competitiveness partly offset the impact of tough market conditions including challenging price realization, higher material and interest costs, the company said in a statement. Higher exports to Bangladesh, Middle East and Africa also contributed to the growth, the company further said.

In addition to the existing strong presence in traditional power and industry segments, the company also focused on the renewables and energy-efficiency space during the year, ABB said in a statement.

ABB said that the company is well positioned with a strong order backlog of Rs 9128.80 crore as on 31 December 2011, providing necessary visibility to future revenues.

ABB is a leader in power and automation technologies. Worldwide, the ABB Group of companies operate in around 100 countries and employs about 1.35 lakh people.