1,190% Dividend Payout Soon: UBS Optimistic On Electrical Stock ABB, Recommends Buy For Rs 7,550 TP

According to UBS, ABB's low/medium-voltage product suite is expanding in both range and geographical exposure, covering both conventional and emerging market segments. There is a clear focus among global firms, like SIEM and Schneider, along with ABB, on capturing the long-term growth in electrification. On the motion side, mobility, including semi highspeed rail, conventional rail, and metro, has led the step-up in order inflow run rate, which we think is sustainable on an annual basis (quarterly volatility might persist), given that ABB is focusing on expanding capacity commensurately to tap the growth opportunities.

"We raise 2024E/25E PAT by 12%/14% (Figure 9), and our target PE from 65x to its historical peak of 75x, as we believe ABB will continue to expand its product suite and capacity, especially in the highly scalable electrification segment, and gain market share in the mobility segment. Our PE-based PT rises to Rs7,550 from Rs5,380," UBS note added.

The company has recommended a final dividend of Rs 23.80 per share i.e., (1190%) on 21,19,08,375 Equity Shares of the face value of Rs.2/- each fully paid up for the financial year ended December 31, 2023, subject to shareholders' approval at the ensuing Annual General Meeting.

The record date for dividend payout is fixed on May 3.

In 2023, ABB reported record-high orders of Rs 12,319 crore and revenue of Rs 10,447 crore. Strong price execution and increased volumes bolster margins - PBT before exceptional up by 62% and PAT by 22% Y-o-Y. Return on capital employed (ROCE) doubles from 2019 levels to reach 21%, Also, customer outreach to 7000+ customers across 31 tier 2 and 3 markets with ABB Technology Day.

ABB is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company's solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered and operated. Building on over 140 years of excellence, ABB's more than 105,000 employees are committed to driving innovations that accelerate industrial transformation.