ABB India, Siemens surge 5% on hopes of healthy September quarter earnings

Analysts expect the capital goods sector to report healthy performance in the second quarter of financial year 2024-25, owing to the execution of robust opening order books, continued capex-led demand in the domestic market, and a strong traction in key export segments, such as energy transition, turbines and transmission and distribution (T&D).

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The brokerage firm believes ABB India’s prospects will continue to remain strong, driven by increasing demand for its energy efficient and premium products, its focus on high-growth industries and a robust domestic order pipeline.

“We expect the company to report revenue/adjusted profit after tax compound annual growth rate (CAGR) of 22.6 per cent/29.0 per cent over CY23-26E,” the brokerage firm said.

It has an ‘Accumulate’ rating on the stock, with a target price of Rs 8,833, valuing the company at a PE of 76x, June 26E. The market price of ABB India had hit a record high of Rs 9,200 on June 18, 2024.

Siemens is an integrated technology service provider and a leading powerhouse in electronics and electrical engineering. The company is strongly placed in energy and infrastructure, including transmission and distribution, automation, urban infrastructure and other business.

The stock price of Siemens had hit an all-time high of Rs 7,974.25 on July 11, 2024.

It is in that backdrop that Siemens is well positioned to capitalise on emerging opportunities, which will likely lead to an anticipated growth in demand for its products and solutions.

“The company’s focus on cost optimisation measures is also expected to enhance margins. Moreover, with investments in expanding the business and a healthy order backlog in place, we anticipate a strong revenue outlook,” Geojit said in the company’s June quarter results update.