ABB India Limited: history, ownership, mission, how it works & makes money

A Brief History of ABB India Limited

ABB India Limited is a subsidiary of ABB Group, a global technology company, headquartered in Zürich, Switzerland. The Indian arm has been a part of formidable advancements in the power and automation sectors since its inception.

The company began its operations in India in 1949, initially established as a joint venture. Over the decades, ABB India has expanded its capabilities significantly, focusing on engineering, manufacturing, and innovation to meet the growing demands of the Indian market.

In 1992, ABB India became a publicly traded company, listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Its key stock performance over the years has demonstrated resilience and growth.

ABB India reported its revenues of ₹10,899 crore for the fiscal year ended December 2022, showcasing a strong increase of 12% from ₹9,726 crore in the previous fiscal year.

The company’s operating profit stood at ₹1,082 crore in FY 2022, with an operating margin of 9.92%. This reflects effective cost management and operational efficiency within its sectors.

In terms of net profit, ABB India achieved a net profit of ₹758 crore for FY 2022, marking a substantial growth of 15% compared to ₹659 crore in FY 2021. This growth trajectory has positioned ABB India as a significant player in the technology market.

ABB India's operations encompass a wide range of segments, including Electrification, Industrial Automation, Motion, and Robotics. The company has consistently invested in advancements in technology and innovation.

As of 2023, ABB India has continued its commitment to sustainability, introducing products geared towards energy efficiency and productivity enhancements. The company has also announced plans to invest approximately ₹1,500 crore in expanding its manufacturing capabilities in India by FY 2025.

In recent years, ABB India has seen an uptick in demand for its digital solutions, which include smart grids and industry 4.0 technologies. This shift is reflected in their increased investment in research and development, which amounted to approximately ₹350 crore in FY 2022, representing a growth of 20% year-over-year.

The stock performance of ABB India has been robust, with a price-to-earnings (P/E) ratio of approximately 40 as of October 2023. The company’s stock has demonstrated resilience, maintaining an upward trend amidst broader market volatility.

ABB India has also been recognized for its corporate governance and sustainable business practices, becoming part of the Nifty 50 ESG Index in 2022.

With a workforce exceeding 15,000 employees, ABB India is committed to enhancing its operational framework and employee well-being, thereby ensuring a competitive edge in the marketplace.

A Who Owns ABB India Limited

ABB India Limited, a leading player in the electrification and automation sectors, operates under the umbrella of its parent company, ABB Group, which is based in Switzerland. As of the latest reports, ABB Group holds a substantial majority of the shares in ABB India Limited.

ABB Group, a leader in technology and automation, reported revenue of approximately $29.5 billion for the year 2022, highlighting its strong financial backing for its subsidiaries like ABB India. The revenue for ABB India Limited, as per the latest fiscal year report, stood at around ₹12,000 crore.

Financial institutions and retail investors make up the remaining shares, where institutional investors maintain a cautious approach, given the dynamics of the Indian market. The shareholding pattern reflects a robust presence of foreign capital as well as a consistent interest from domestic institutional investors.

The company’s stock performance on the National Stock Exchange (NSE) has shown significant growth. As of October 2023, the stock price of ABB India Limited was around ₹2,600, marking an increase of approximately 30% year-to-date.

ABB India's strategic alignment with ABB Group enables it to leverage advanced technologies and innovation in India. With a focused approach on renewable energy and automation solutions, the company aims to capture a larger share of the growing market.

The governance structure includes a board comprising both local and international members, ensuring alignment with global standards and practices. The diverse ownership structure has facilitated effective risk management and operational efficiency, crucial for navigating India's competitive industrial landscape.

Moreover, ABB India’s recent investment plans cite a commitment of around ₹1,000 crore for enhancing manufacturing capabilities, particularly in electric vehicle (EV) infrastructure, aligning with India's ambitious energy transition targets.

The stock’s trading volume has seen fluctuations but largely remains buoyant, a testament to investor confidence. Recent data indicates that the average daily traded volume is approximately 150,000 shares, underscoring its liquidity and market activity.

In summary, ABB India Limited benefits significantly from its parent company’s strong global presence and technological expertise, while the diverse ownership structure enhances its resilience in the dynamic Indian market.

ABB India Limited Mission Statement

ABB India Limited focuses on delivering innovative solutions that enhance productivity and sustainability through electrical, automation, and digital technologies. The company aligns its mission with global trends toward decarbonization and digitalization, aiming to drive the transition to a low-carbon future.

The mission statement emphasizes key areas: customer-centricity, technological advancement, and sustainability. ABB India aims to enable customers to gain a competitive edge in their respective industries by leveraging cutting-edge technologies combined with industry-specific expertise. This commitment is reflected in their substantial investments in research and development, which amounted to approximately 7% of sales in 2022.

In 2022, ABB India's revenue reached approximately INR 10,174 crores, with a year-over-year growth of 15%. This growth reflects the increasing demand for sustainable and efficient energy solutions across sectors such as renewable energy, smart cities, and industrial automation.

ABB India's mission is deeply intertwined with its commitment to sustainability. The company has set ambitious targets to reduce its own carbon footprint, with plans to achieve net-zero emissions across its operations by 2030. This aligns with global efforts to combat climate change while addressing the specific needs of the Indian market.

In recent years, ABB India has also engaged in numerous partnerships aimed at promoting sustainable practices. For instance, in collaboration with the Indian government, the company is working on enhancing the country’s electricity distribution infrastructure. This initiative is projected to improve the efficiency of power distribution by 30%, significantly reducing losses attributed to outdated systems.

Furthermore, ABB's investments in digitalization have led to the development of a suite of advanced analytics tools. These tools are designed to optimize electricity consumption and improve operational efficiency for its customers, potentially leading to cost savings of up to 25% in operational expenditure over a five-year horizon.

The mission is further reflected in ABB India’s active participation in various industrial forums and sustainability initiatives, showcasing leadership in the transition toward greener technologies. The company’s strategy encapsulates the essence of being a trusted partner in engineering solutions that contribute to a more sustainable future while driving profitability.

How ABB India Limited Works

ABB India Limited operates as a part of Swiss-Swedish multinational ABB Group, which specializes in electrification, robotics, automation, and digitalization technologies. The company is a leading player in industrial technology and offers a wide range of products and services that are vital for various sectors such as utilities, transport, and infrastructure.

As of Q3 2023, ABB India reported a total revenue of approximately ₹10,750 crore for the fiscal year ending December 31, 2022. This represented an increase of 12% compared to the previous year. The company continues to focus on expanding its operations in the renewable energy and automation segments, which are critical for sustainable development.

In terms of employee strength, as of October 2023, ABB India had approximately 11,000 employees across various locations in India. The workforce is dedicated to driving innovation and maintaining high standards in product quality. In the fiscal year 2023, ABB India invested about ₹300 crore in research and development, focusing primarily on robotics and automation technologies.

ABB India’s business is segmented into four primary divisions: Electrification, Industrial Automation, Motion, and Robotics & Discrete Automation. The Electrification segment is particularly significant, contributing over 45% to the company’s total revenues, driven by increased demand for electrical equipment and solutions.

ABB India also emphasizes sustainability, targeting a reduction in carbon emissions through improved energy efficiency solutions. The company aims to achieve 50% of its revenue from sustainable solutions by 2025.

Key products include high-voltage switchgear, transformers, and drives, which cater to industries ranging from automotive to telecommunications. ABB India has led numerous projects in smart grids and automation systems, which positions it favorably in the market.

In the stock market, ABB India is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The share price as of October 2023 was around ₹2,100, reflecting a year-to-date increase of approximately 20%.

Overall, ABB India Limited is poised for growth driven by its strategic focus on electrification and automation, enhanced by government initiatives promoting renewable energy and industrial digitization in India.

How ABB India Limited Makes Money

ABB India Limited is a prominent player in the automation and electrification sectors. The company's revenue streams are diverse, primarily driven by its comprehensive portfolio of products and services that cater to various industries. ABB India generates income through the following segments:

• Automation Products
• Electrification Products
• Motion
• Process Automation
• Industrial Solutions

In the fiscal year ending December 2022, ABB India reported a total revenue of ₹12,982 crore, showcasing growth from the previous year. The breakdown of revenue by segment is as follows:

The Automation Products segment includes offerings such as programmable logic controllers (PLCs), human-machine interfaces (HMIs), and sensing products. This segment contributes significantly to ABB’s market leadership in factory automation, especially within the manufacturing sector.

The Electrification Products segment provides solutions for electrical distribution, including switchgear, modular substations, and components for renewable energy applications. A surge in infrastructure spending in India has bolstered this revenue stream, with ABB India securing several contracts within this domain.

In the Motion segment, ABB India produces products such as motors and drives, which are crucial for industrial processes. The demand for energy-efficient solutions has led to an increase in orders, resulting in a revenue uptick in this area.

Process Automation focuses on control systems, instrumentation, and services tailored for industries such as oil and gas, chemicals, and food and beverage. With a total revenue of ₹1,825 crore in FY 2022, ABB is positioned well to capitalize on the growing industrial automation trend.

Lastly, the Industrial Solutions segment entails the provision of engineering and integrated solutions for infrastructure and industry. ABB India is actively involved in large projects that require high levels of customization, which boosts this segment's revenue as seen in the reported ₹846 crore.

As of Q3 2023, ABB India reported an order backlog of ₹7,500 crore, indicating strong future revenue potential. The company’s commitment to innovation and digitization is illustrated by an increase in R&D investment, which reached ₹543 crore in FY 2022.

ABB India is also leveraging digital transformations in its operations, with services such as predictive maintenance and IoT-based solutions. This shift has led to a more diversified income portfolio, aligning with global trends toward smart manufacturing and energy management.

In summary, ABB India Limited generates revenue through a combination of product sales and services across several segments, demonstrating resilience and adaptive strategies in a highly competitive market. The continual investment in technology and infrastructure projects further solidifies its financial positioning in the Indian industrial landscape.