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ABB India reported a 14% year-on-year revenue growth for Q3 CY2025, driven by healthy base order growth of 13%. However, the overall order growth for the quarter was -3% due to a high base from large contracts in the previous year. The company's PBT margin stood at 16.4%, a decline from 20.5% in the prior year, and PAT saw a 7% year-on-year decrease, despite a 16% quarter-on-quarter increase in profitability.

The decline in profitability was attributed to several factors, including material cost impacts, an unfavorable revenue mix, and intensified competition in certain segments. The introduction of new technologies and the impact of Quality Control Orders (QCO) and FOREX volatility also contributed to margin pressures. Management noted a 3% gap in profitability compared to previous quarters in Electrification, primarily due to these factors.

The company maintains a robust order backlog of ₹9,895 crores, providing good revenue visibility for the coming quarters. Approximately 30% of this backlog comprises large orders, while 70% consists of smaller orders with a faster execution cycle. Despite a 2% reduction in Electrification backlogs due to faster execution than intake, the overall backlog is considered clean with no slow-moving orders.

The recently mandated QCOs, requiring BIS certification for locally manufactured products, have led to operational challenges. Due to limited testing capacity and certification delays, ABB India is compelled to use imported components, resulting in higher costs and exposure to FOREX volatility. This impact is expected to persist for the next 3-4 quarters, and the company is working to navigate these challenges while ensuring customer serviceability.

The Electrification and Motion divisions saw good base order growth, with Motion's backlog at ₹4,100 crores, executable over 12-18 months. Process Automation experienced stagnant order intakes and revenues at ₹600 crores, with falling backlogs due to delayed decisions on large expansions. Robotics recorded a good order intake of ₹203 crores, driven by automotive, electronics, and general industry segments. The company is seeing strong opportunities in renewables, rail, and colocation data centers, while hyperscale data centers showed some sluggishness.

ABB India is on track with its sustainability targets, having achieved 87.05% GHG emission reduction against an 87% target and four zero-waste-to-landfill units. The company has achieved three out of four target water-positive units, with the last one under certification, and aims for 50% water recyclability by year-end 2025 (currently 44%). The company consistently spends 100% of its CSR allocation, focusing on education, skilling, diversity, and environmental initiatives.

Management acknowledges current market sluggishness in CAPEX formation as a cyclical correction but expects a rebound. The company maintains a strong cash position of ₹4,500 crores, partly used for strategic inventory build-up. Globally, ABB is exploring large inorganic options, and similar bolt-on opportunities are being pursued in India to complement existing portfolios and enter new market segments. The divestment of the robotics business in India is subject to Board evaluation and a separate valuation process.