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Axis Capital Upgrades ABB India To ‘Buy’ On Improved Outlook

Axis Capital hiked ABB India’s target price to Rs 1,750.

A motorcyclist rides near an electricity transmission pylon  in Nandurbar district, Maharashtra, India. (Photographer: Dhiraj Singh/Bloomberg)
A motorcyclist rides near an electricity transmission pylon in Nandurbar district, Maharashtra, India. (Photographer: Dhiraj Singh/Bloomberg)

Brokerage house Axis Capital upgraded its stock rating on ABB India Ltd, citing improving growth outlook. It expects railways to be the next key drivers for the industrial equipment manufacturer.

Besides that, the direct exports to the Middle East, Africa (MEA) and SAARC (South Asian Association for Regional Cooperation) nations will also aid ABB’s growth, the broking firm said in a note.

It upped the stock’s target price to Rs 1,750 from Rs 1,400 earlier— a potential upside of 23 percent from Tuesday’s close.

Exports likely to grow in higher teens with robust margins.
Axis Capital Research Report

New technologies such as smart and microgrids, remote monitoring, electric vehicle (EV) charging, renewable energy storage, robotics, and digitisation are key areas of future growth for the company, Axis Capital said.

ABB has introduced fast chargers for electric buses and cars globally, and these technologies are available with ABB India but size of market is currently negligible, it said.

The broking company said that the renewables, which at present constitute 17 percent of sales, have driven the company’s growth over last 2-3 years. “Focus on renewables helps in pushing transmission and distribution segment”, Axis Capital said.

Shares of ABB India gained as much as 3.5 percent to Rs 1,493. The stock has returned 42 percent so far this year and a gain of 28 percent in the past 52 weeks.