A B B H1FY27 Results (NSE: ABB)
Signal: Margin pressure
The read
The headline PAT of ₹2,145.95 Cr (+160% YoY) is almost entirely a one-time event — ₹1,658 Cr profit on sale of Robotics business (discontinued ops). Underlying continuing operations tell a more cautious story: revenue grew a modest 6.4% YoY for the quarter (₹3,558.87 Cr) and 13.3% for H1, but EBITDA margin contracted ~600bps to 15.5% in Q1 and ~300bps to 14.3% for H1, driven by raw material cost pressures and higher other expenses. Continuing PAT slipped 11% in H1 to ₹712 Cr. The company's core electrification and automation businesses are growing at a decelerating rate with margin compression — this is a 4th consecutive quarter of margin contraction (since Q2FY26). The special dividend of ₹90/share signals management's intent to return the one-time cash to shareholders rather than reinvest.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹6,742.93 Cr | 13.3% | 111.8% |
| EBIT | ₹966.16 Cr | -13.7% | |
| Net profit | ₹2,145.95 Cr | 159.7% | |
| EPS | ₹101.28 | 159.7% | |
| EBIT margin | 15.5% |
P&L walk
Consolidated revenue ₹6,742.93 Cr (+13.3% YoY, H1 basis) driven by Electrification up 23% to ₹3,368.82 Cr and Motion up 11% to ₹2,429.40 Cr, while Automation segment declined 5% to ₹1,024.49 Cr. Gross margin compressed ~100bps YoY (raw material + bought outs at 50.5% of revenue vs 49.6% in H1FY26). EBITDA margin fell ~300bps to 14.3% (continuing ops) as subcontracting (+14.6% YoY) and other expenses (+14.6% YoY) outpaced revenue growth. Continuing PAT slipped 10.9% YoY to ₹711.98 Cr. Total PAT inflated to ₹2,145.95 Cr by ₹1,658.48 Cr one-time gain from Robotics business sale (discontinued operations).
Segments
Electrification segment is the primary growth engine with revenue up 23% YoY to ₹3,368.82 Cr (49.9% of total) and segment result of ₹504.24 Cr, though its margin slipped from 20.4% to 15.0%. Motion grew 11% to ₹2,429.40 Cr but segment result declined 28% to ₹300.19 Cr (margin 12.4% vs 19.2%). Automation segment revenue fell 5% to ₹1,024.49 Cr with result down 19% to ₹147.22 Cr (margin 14.4% vs 16.8%).
Key positives
- Revenue from operations ₹6,742.93 Cr (+13.3% YoY for H1) driven by strong Electrification segment up 23%
- One-time gain of ₹1,658.48 Cr from Robotics business sale provides large cash infusion
- Special dividend of ₹90 per share declared to return value to shareholders
- Net cash position remains strong at ₹3,275.59 Cr cash & equivalents
- Finance costs declined 38% YoY to ₹5.52 Cr reflecting negligible borrowings
Key concerns
- Core continuing PAT declined 11% YoY to ₹711.98 Cr for H1FY27
- EBITDA margin (continuing ops) contracted ~300bps YoY to 14.3% in H1 — 4th consecutive quarter of margin compression since Q2FY26
- Raw material cost as % of revenue rose to 50.5% from 49.6% — input cost headwind
- Automation segment revenue declined 5% YoY and segment result fell 19%
- Operating cash flow negative at ₹-271 Cr for H1; working capital pressures evident
- Other expenses grew 14.6% YoY, outpacing revenue growth and pressuring margins
Research and educational content only. Not investment advice.