Industrial products maker ABB India Ltd reported order inflows of ₹4,280 crore for the three months ended March (Q1CY26), up 25% year-on-year and its highest-ever quarterly figure.
But the Street’s focus is elsewhere: margins.
Ebitda margin eroded sharply by 576 basis points (bps) to 12.8%, hurt by stiff competition and input cost pressures. The situation was worsened by rupee depreciation given the company’s high import mix.
The stock has fallen 11% in the past two trading sessions since Q1CY26 results were announced. ABB follows a January–December financial year.
In fact, the stock is down about 20% from its 52-week high of ₹7,822.50 touched on 22 April, when parent ABB Ltd announced Q1CY26 results, reporting strong order inflow growth in the India business.
Margin monitor
ABB India has undertaken two price increases, but management said their impact will be visible only with a lag.
At the same time, entry of global players in certain market segments has heightened competitive intensity, further weighing on margins.
Brokerages have reacted swiftly.
Nomura Global Market Research cut its CY26 earnings per share (EPS) estimate by 6%, while ICICI Securities trimmed it by 11%.
“While the price hikes being taken by ABB and tapering QCO (quality control orders) impact are expected to aid margins, we believe full margin recovery could take couple of quarters and remain a key monitorable,” noted ICICI Securities.
Order revival
On the positive side, Q1CY26 marked the second consecutive quarter of 25%+ order inflow growth. This is significant given that order inflows had declined by 3–12% in the preceding four quarters.
However, revenue recognition and the full impact of rising costs on margins—especially in the backdrop of the West Asia war—remain key variables.
Base order inflow growth was relatively muted at 9% to ₹3,519 crore, reflecting slower decision-making in certain segments.
In contrast, large orders surged to ₹760 crore versus ₹210 crore last year. These were driven by data centres—a rapidly growing sub-segment led by artificial intelligence-related infrastructure build-up—and railways.
At the end of March, ABB India’s order book stood at ₹11,100 crore, equivalent to 0.9 times its trailing twelve-month revenue.
Q1CY26 consolidated revenue grew 6% year-on-year to ₹3,200 crore, impacted by delivery deferrals due to uncertainty arising from the ongoing war. Ebitda fell 27%.
The company’s financials are adjusted for the divested robotics division.
Segment-wise, electrification and motion posted revenue growth of 15% and 6%, respectively. However, automation revenue declined 15%.
In March, ABB India announced a significant capex of $75 million (about ₹7,100 crore) toward capacity expansion for renewable energy, metro rail, data centres and research & development. Beyond product expansion, the capex is expected to strengthen the company’s services portfolio, which currently contributes about 12% of revenue.
Valuation hurdle
Despite recent corrections, ABB shares are still up about 20% so far in 2026.
“A sustained pickup in quarterly order inflow run rate beyond Rs3,800–4,000 crore (from current Rs3,500-4,000 crore) and margin recovery are crucial for driving earnings growth on an already elevated base and achieving ABB’s 12–15% PAT margin guidance,” said Nuvama Research. A rebound in private capex and timely execution of large orders would be key enablers, it added.
The stock trades at around 72 times one year forward price to earnings ratio, according to Bloomberg consensus—well above its long-term average multiple of 62 times.