Mumbai: India’s ABB Ltd, a unit of Swiss engineering group ABB, said on Wednesday its Oct-Dec net profit plunged 94% hurt by provisioning for additional exit costs for some projects in non-core business.
However, shares of ABB, which the market values at $3.13 billion, closed up about 5% in a choppy session on market talk the company might be delisted, two dealers said.
However, a company spokesman said it does not have any such plans to delist as of now.
Last July, the firm’s Swiss parent had raised its stake in the Indian unit to 75%.
Earlier in the day, ABB, which makes power equipment and offers automation technology services, posted a net profit of Rs6.77 crore compared with Rs109.6 crore a year ago.
ABB incurred a loss of Rs21.72 crore in forex losses compared against a gain of Rs1.04 crore a year ago.
ABB’s net profit has been consistently falling over the past few quarters due to pressure on pricing and exit costs on projects in its non-core business.
“The sales growth was okay and margins have improved marginally but the overall results were not good. They were much below expectations,” Chinmay Gandre, an analyst with Asit C. Mehta Investment, who rates the stock “reduce,” said.
According to Thomson Reuters Data, 14 analysts rate the stock sell, 11 underperform, four have a hold, while one recommends a buy.
Total operating income rose 9% to Rs2,072 crore and it had order backlog of Rs8,436 crore as of 31 December.
ABB said in a statement it received fewer orders during the Oct-Dec quarter against a year ago impacted by price erosion and increased competition.
The parent company posted a Oct-Dec net income of $700 million, above analysts’ expectations of $695 million.