ABB Power Products and Systems - Multibagger Analysis 2021

This is a Multibagger Analysis which user requested here.

APPSIL was shaped after the Hitachi’s procurement of 80.1% stake in the worldwide force frameworks business of ABB Ltd in Dec, 2018 and the ensuing divestment and move of worldwide force networks specialty unit of ABB into another JV, Hitachi ABB Power Grids Ltd (Hitachi – 80.1% and ABB – 19.99%) which was fused in Feb, 2019.

Stock Information

Parameter	Description
Market Capitalization	Rs. ₹ 8000 Crores
CMP	Rs. ₹ 1900
NSE Code	ABC.NS
ROE	13.5 %
ROCE	19.4 %

Products & Services

APPSIL provides product, software and service solutions arrangements across the whole force esteem chain. The organization’s portfolio incorporates a broad scope of high-voltage items, transformers, network mechanization items, and force quality items and frameworks. Grid automation products, Capacitor & filters, Power transformers

Clients

•Life Insurance Corporation of India •Reliance Capital Trustee Co Limited •Aberdeen Global Indian Equity Limited •HDFC Trustee Company Limited •Vanguard Emerging Markets Stock Index Fund

Positives

•Company is leader in HVDC technology

•Largest order-booking from Indonesia

•High Promoter Holdings of 75%

•High Operating Profit Margin

•Jump in latest QR Earnings (Mar 2021)

•Future Prospects on Government Power & Infrastructure Expansion may turn Favorable to company

Negatives

•Covid impacted Revenue & Profit Growth of company •Sector Outlook is Not optimistic until Covid is completely cleared from PAN India space •Trading at High Book Value Ratio of 8X •High Competition from Peers in Local & Global Space •Low Operating Profit Margin of 7% •

Warren Buffet Checklist

FACTOR	OUTCOME
ECONOMIC MOAT	Moderate
GROWTH	Moderate
VALUATION	Moderate
DEBT	Good
INTEGRITY	Good

SUMMARY

The company can give only Moderate Returns or a Possible Peak of 100-200% Returns in a 5 year period. However we do not see a Concrete Multibagger properties for the company as we do not have enough data to claim this company as a Multibagger.

DISCLAIMER this is not a Multibagger recommendation. Analyst do not hold stake in the company.

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