Nature of the Disclosure

This document is the transcript of ABB India Limited's Q2 CY2026 earnings conference call with analysts, filed as a regulatory disclosure under the SEBI Listing Obligations and Disclosure Requirements (LODR). The call was held on July 31, 2026, following the announcement of the company's unaudited financial results for the quarter and half-year ended June 30, 2026.

Key Financial Figures (H1 CY2026)

  • Orders: INR 8,600 crores, up 36% YoY.
  • Revenue: INR 6,743 crores, up 13% YoY.
  • Operational EBITA Margin: 12.8%.
  • Earnings Per Share (EPS): INR 33.61.
  • Cash & Cash Equivalents: INR 7,200 crores (INR 72 billion).
  • Order Backlog: INR 11,900 crores, stated to have no slow-moving or non-moving orders.

Key Financial Figures (Q2 CY2026)

  • Orders: INR 2,400 crores, up 50% YoY.
  • Revenue: Up 21% YoY (absolute figure not specified in the transcript).
  • Profit After Tax (PAT): Up 8% YoY.
  • Operational EBITA: Up 23% YoY, with a margin of 12.6% for the quarter.

Corporate Action

  • The company declared an interim dividend of INR 90 per share. This includes proceeds from the divestment of the robotics business plus a 50% payout ratio from normal earnings.

Management Transition

  • Mr. T.K. Sridhar, the current Chief Financial Officer (CFO), was accorded the status of Managing Director Designate, effective January 1, 2027. Mr. Sanjeev Sharma, the current Managing Director, is overseeing the transition.
  • A search for a new CFO is underway and is expected to be completed in the next couple of months.

Operational and Segment-Wise Performance

  • Manufacturing: The number of manufacturing locations increased from 5 to 6 with the addition of a facility in Nelamangala.
  • Segment Performance (Q2):
  • Electrification (EL): Orders up 77% YoY. Revenue up 31% YoY. Profitability at 15%. Backlog of ~INR 4,800-4,900 crores. Growth driven by data centers, metals & mining, infrastructure, and cement. Margins were impacted by higher metal prices and forex volatility.
  • Motion: Orders up 26% YoY (and sequentially). Profitability at 12%. Backlog of INR 4,900 crores. Revenue growth was slightly lower due to the long gestation of railway orders. Exports to West Asia faced some holdbacks early in the quarter.
  • Automation: Orders up 24% YoY. Revenue up 7% YoY to INR 524 crores, of which 30% came from services. The segment is described as cyclical.

Profitability Analysis (Q2 EBITA Bridge)

The quarter-on-quarter EBITA margin declined from 13.6% in Q1 to 12.6% in Q2. The key movers were:

  • Scale Benefit: +2.1%
  • Material Cost Increase: -3.0% (attributed to rising copper/metal prices and forex volatility).
  • Increase in Other Expenses & Employee Costs: -2.2%
  • Lower Forex Impact (gain): +1.6% (compared to a high gain in the previous quarter).

Management cited a lag in passing input cost increases to customers as a primary reason for the margin compression.

Market & Demand Commentary

  • Key Growth Sectors: Data centers (15-17% of orders), metals & mining (15%), oil & gas (9%), buildings & infrastructure (8%), and renewables (6%).
  • Geographical Mix: Exports constituted 13% of Q2 revenue, down from 17% in Q1, attributed to the West Asia crisis.
  • Demand Outlook: Management expressed confidence in the megatrends of electrification, automation, and digitalization. Short-term factors include government capex, private consumption, robust manufacturing, geopolitical uncertainty, and a subnormal monsoon.

Other Material Updates

  • ESG Performance: The company reported an 85% reduction in Scope 1 & 2 GHG emissions from baseline and 99.7% waste diversion from landfill. It was recognized as 'India's Most Sustainable Company' in the Capital Goods sector by Business Today and improved its CRISIL ESG rating by 300 basis points.
  • Rotork Acquisition: Management declined to comment on potential synergies from the global ABB Group's proposed acquisition of Rotork, stating it was too early as shareholder approval was still pending.
  • Quality Control Order (QCO): Challenges related to QCO are easing as the company and its suppliers have adapted to requirements, and the government has provided some extensions.
  • Capacity & Capex: The company maintains a capacity utilization headroom of 15-20% to cater to incremental growth. It is investing in capacity expansion, particularly for products required in the data center segment, anticipating multifold demand growth in 2027-2028.
  • Global vs. India Orders: The 50% order growth reported by ABB India differs from the 82% growth reported by the ABB Group for India-related orders. The variance is due to Indian customers placing orders directly with other ABB Group companies for systems or competencies not available within ABB India Ltd.