Motilal Oswal: ABB Beats Expectation With Strong Operating Performance In Q2
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Motilal Oswal Report
Despite strong impact of the Covid-19 disruption on short duration businesses, ABB India Ltd.’s Q2 CY20 revenue growth decline was limited to 43% (versus estimate 57% decline). The company demonstrated strong cost control measures, which led to positive Ebitda/adjusted profit after tax (versus estimate loss). This suggests that ABB has a highly resilient business model.
Importantly, the company has suggested that June-July 2020 marked double-digit YoY growth in order inflows/revenue. ABB’s results indicate trends that boost our structural industrial automation theme – not only have clients experienced the benefits from close quarters, but the company has also used automation (remote monitoring, etc.) to service clients at lower costs.
While we are impressed with green-shoots in the automation business, we await more data points to emerge – expect confirmation of the same through Siemens’ results.
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