ABB India share at 52-week high; Are there more legs to this rally?

A key highlight was the 36.4% year-over-year increase in order inflow 3,125 crore across verticals after two consecutive quarters of subdued order inflows. Analysts say ABB’s Q1CY23 order book is worth approx 7,170 crore, providing revenue visibility for the next few quarters.

Management is optimistic about capital spending prospects and anticipates continued order momentum, particularly for short-cycle orders. Additionally, ABB is expected to benefit from global supply chain diversification.

These factors have prompted some analysts to revise their earnings estimates upward. “We believe ABB’s strong business model, healthy global distribution network, diversified business portfolio and strong cash position will benefit the company as economic activity begins to pick up,” said analysts at Yes Securities Ltd. “Considering the strong margin profile and strong business outlook, we raise our CY23E/CY24E earnings per share estimates by 27% / 14%, respectively,” they said in a report.

However, the key question is whether the stock has more upside potential after the recent rally, given that it has gained nearly 40% so far this calendar year.

“While we appreciate ABB’s short-cycle business model, allowing faster conversion of order book into earnings, we look at CMP factors in a bull case of 14-15% order inflow with 11-12% margin. Believe. “Limited triggers are expected despite factoring in the above best-case scenario,” Nuwama Research said in a May 5 report. Operating margin growth.