A B B — Q3 FY26 earnings call

ABB India concluded CY2025 with strong financial results, reporting orders of INR 14,115 crores, an 8% year-on-year growth, and revenue of INR 13,203 crores, also up 8%. The order backlog reached INR 10,471 crores, growing 12% YoY and providing significant revenue visibility for future quarters. The fourth quarter of CY2025 demonstrated exceptional momentum with a 52% order growth and a 27% increase in base business orders, signaling a strong market rebound after a period of consolidation.

While the company achieved a PBT of INR 2,230 crores (16.9% margin) and PAT of INR 1,669 crores for FY25, Q4 CY25 profitability saw an EBITDA margin of 15.4% and PAT margin of 12.2%. This was primarily due to a strategic decision to use imported material for Quality Control Order (QCO) concerns, which increased material costs to 61% from 58% previously. Additionally, personnel expenses were impacted by INR 65 crores due to the Labour Code, contributing to the margin pressure. Management anticipates a PAT margin trajectory of 12-15% going forward^⏳.

Data centers have been identified as a significant growth engine for ABB India, contributing roughly 10-11% to the current INR 10,471 crores order backlog. Management noted very strong demand from both hyperscale and large Indian data center players, driven by the AI Summit and government tax holidays extended until 2047. ABB's comprehensive portfolio, including low-voltage switchgear and power infrastructure, positions it well to capitalize on the expanding megawatt to gigawatt capacity requirements in this sector.

ABB India's core expertise lies in electrification and automation, which are considered sweet spots for India's ongoing development. The Electrification division recorded a 43% YoY growth in Q4, while Motion orders increased by 25% and Automation orders by 34%. The company continues to expand its portfolio with new product introductions, such as energy-efficient drives and next-generation machinery drives, emphasizing localization and deeper market penetration to serve diverse segments.

The company showcased a strong commitment to sustainability, achieving AWS Gold certification for water stewardship at its Nelamangala facility, making it the fourth company in India to do so. ABB India has reduced GHG emissions by 87%, achieved zero waste to landfill at four locations, and boasts 44% water recyclability. Its ESG initiatives cover 51% of suppliers, and the company has received recognition as an ESG Leader by the National Stock Exchanges, underscoring its focus on responsible operations.

Management expressed a positive outlook for CY2026, anticipating market revival fueled by increasing private sector capex, the Indian Union Budget's focus on emerging industries, infrastructure, and core sectors. The signing of the India-Europe Free Trade Agreement, expected to be ratified within six months, is also viewed as a net positive for ABB India, potentially enhancing portfolio deployment and supply chain integration with the EU. While global uncertainties and commodity price volatility remain, the company is confident in its adaptive strategies.

ABB India primarily competes with established domestic players. While acknowledging potential future competition from Chinese manufacturers if industrial goods imports become more open, management noted no direct impact has been observed yet, though some large projects previously showed preference for Chinese equipment. The company reassured investors that any ABB technology demanded by customers is seamlessly available in India, ensuring access to global innovations for local market needs without specific technology transfer hurdles.