Earnings Call Transcript Analysis Report #
Financial Performance #
Key Metrics #
- Orders (FY24): +6% YoY (Base Orders +4% YoY in Q4). Total orders were down 14% YoY in Q4 primarily due to a high base from a large transportation order in Q4'23.
- Revenue (FY24): +17% YoY. Q4 revenue grew strongly at +22% YoY.
- Profitability (FY24): PBT margin expanded significantly, up 51% YoY. PAT reached 15.4% for the full year (15.8% in Q4), an absolute increase of 50% YoY. Operational EBITDA was 20% for the year (expanding 56% in Q4).
- EPS (FY24): Expanded by 50% YoY.
- Cash: Grew 14% YoY to ₹5,390 crores.
- Order Backlog: ₹9,400 crores, +12% YoY.
- Dividend: Final dividend increased by 51% YoY.
- RoCE: Reached 26.5%, more than doubled since 2020.
Comparison #
The company highlighted strong growth on top of already robust growth in the previous year (FY23 saw 23% order growth and 22% revenue growth). While Q4 total order intake showed a YoY decline due to base effects, underlying base orders grew. Profitability metrics showed exceptional improvement both YoY and sequentially in Q4.
Guidance/Forecasts #
No explicit numerical guidance was provided for FY25. However, management guided for a PAT margin “corridor of 12 to 15 percentage” going forward, suggesting the record highs of ~15.5-15.8% PAT might moderate slightly as pricing advantages normalize. They expect 65-70% of the current backlog to be executed in CY25.
Growth/Decline Areas #
Strong revenue growth across the board driven by backlog execution. Significant profitability improvement attributed to operational efficiencies, favorable mix (services, premium products), capacity utilization, localization, and past price increases booked when commodity prices were lower. Material costs as a percentage of revenue hit a record low of 58%. Order growth moderated compared to the previous year’s high base.
Strategic Initiatives & Business Updates #
Portfolio Expansion & Localization #
Continued focus on expanding the portfolio and localizing ABB’s global technologies. Mentioned expansion of the Faridabad IEC Low Voltage Motor Manufacturing Unit. Quote: “every year we continue to expand our portfolio, continue to localize it so that we are competitive…”
New Products/Markets #
Launched new analyzers, secured projects for monitoring PV and hybrid wind projects. Reached 6 Gigawatt of solar supported through Nashik-made vacuum circuit breakers. Focus on emerging segments like Data Centers, Renewables, E-mobility charging infrastructure, Electronics manufacturing, Railways modernization (Vande Bharat), Hydrogen, Bioethanol. Continued expansion into Tier-2