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.

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Stock Information

ParameterDescription
Market CapitalizationRs. ₹ 8000 Crores
CMPRs. ₹ 1900
NSE CodeABC.NS
ROE13.5 %
ROCE19.4 %

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

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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

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Negatives

Covid impacted Revenue & Profit Growth of companySector Outlook is Not optimistic until Covid is completely cleared from PAN India spaceTrading at High Book Value Ratio of 8XHigh Competition from Peers in Local & Global SpaceLow Operating Profit Margin of 7%

Warren Buffet Checklist

FACTOROUTCOME
ECONOMIC MOATModerate
GROWTHModerate
VALUATIONModerate
DEBTGood
INTEGRITYGood

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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