ABB India, which clocked record orders of more than ₹10,000 crore in 2022, expects to maintain the momentum in the current calendar year backed by growing industrial activity and automation in one of the world’s fastest-growing emerging markets.
Furthermore, the company—part of the Zurich-based electrification and automation major—also has set aside more than ₹1,800 crore, which can be utilised to fund inorganic growth.
Speaking to businessline, ABB India Country Head and MD Sanjeev Sharma said, “Last year’s growth was quite good. Revenue grew 24 per cent Y-o-Y, while fresh orders rose 31 per cent. What is playing well for us, I think, is the portfolio we created in the last 3-4 years.”
An order book of ₹10,028 crore last year is a significant achievement for ABB India as it clocked this volume for the first time after selling 80.1 per cent stake in the power grid business to Hitachi in July 2020. This allowed it to focus on electrification of transport and industry, automated manufacturing, and digital solutions in India.
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Fulcrum of stability
Asked about the order book momentum in 2023, Sharma emphasised “Our order book will sustain the momentum from last year, which is backed by India’s growing industrial activity.”
In its outlook as well, the company pointed out that India continues to be a fulcrum of stability with relatively lower inflation rates, stable commodity prices, rising private consumption, and the much-awaited gradual revival of private capex.
“The impact of Government’s capital expenditure-led recovery schemes and infrastructure focus is likely to continue the momentum in the firm’s identified growth segments, including transportation, data centres, electronics, warehousing and logistics, water, renewable, food and beverage, pharma and healthcare, automotive, etc,” it added.
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ABB India CFO T K Sridhar said, “We expect to maintain the order momentum in 2023 backed by food and beverages, electronics (mobile phones), data centres, and medical equipment.”
Sridhar noted that businesses are eyeing modernisation to optimise operations. “For instance, we were in Hyderabad about 3-4 months before and were having a meeting with rice mill owners. They are trying to modernise to find out how energy efficient they could become by deploying the technology that we have. So, immediately after the meeting, our branch there got so many enquiries from these customers. The dairy industry in the south (India) also is looking for the same,” he added.
ABB’s order backlog as of December 2022 stood at ₹6,468 crore.
Inorganic expansion
The engineering solutions provider also has a corpus of more than ₹1,800 crore that can be utilised for acquisitions.
“We have a robust cash balance of ₹3616 crore, which can support (it) to take part in the bolt-on acquisition strategies to the extent of 50 per cent of cash available, apart from organic expansion plans,” Sharma told reporters. The company, however, did not offer any details on the nature and timelines for acquisitions.
“The company’s cash position continues to remain robust at ₹3,616 crore at the end of 2022 vis-a-vis ₹2,688 crore in 2021,” it said in its Q4 2022 results, which were announced on Friday. It follows the January-December period as financial year.