The company said revenues during the quarter was impacted by lower sales, non-receipt of delivery clearance, and lower service revenue in the nationwide lockdown due to the Covid-19 pandemic. This impact primarily occurred in March 2020.
Profit before exceptional item and tax declined 78 per cent year-on-year (YoY) to Rs 30 crore and profit after tax (PAT) down 26 per cent YoY at Rs 66 crore during the first quarter due to lower volumes including service revenue and unfavorable mix. Resultant under-absorption and mark to market (MTM) impact due to forex volatility was partly offset by refund incomes and one-time gain on sale of solar business during the quarter, the company said.
Despite short-term disruptions, the management is confident in the underlying resilience of its businesses and operating model. The company has a strong balance sheet and is confident that its liquidity needs will be well covered.
“Order growth was also affected and stood at 10 per cent YoY, thus leaving Rs 4,440 crore as order backlog which is 0.65x of CY20E revenues. Challenging ordering environment ahead makes us now even more skeptical of medium-term growth prospects for the company. While ABB has a strong competitive positioning in its industrial footprint, it has been vulnerable to business cyclicality, and macro headwinds and capex problems in the post- Covid environment will get further accentuated across sectors, in our view,” analysts at Emkay Global Financial Services said in a results update.
At 11:05 am, ABB India
was trading 1 per cent lower at Rs 793 on the BSE, as compared to a 2 per cent rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 111,000 equity shares changing hands on the NSE and BSE so far.