Engineering major ABB India has announced first quarter results that are above market expectations. As with other companies in the engineering and capital goods space, ABB continues to benefit from infrastructure investments and corporate investments in capacity expansion.
For the first quarter ended 31 March 2006, ABB has reported a net profit of Rs 51.3 crore or Rs 12.11 per equity share, an increase of 86.5 per cent over Rs 27.51 crore or Rs 6.49 per share reported for the previous year quarter.
Total revenues for the quarter increased 32.48 per cent to Rs 820.86 crore from Rs 619.6 crore. Other income increased 50.46 per cent to Rs 17.95 crore from Rs 11.93 crore.
Operating profits, excluding other income, for the quarter rose 87.07 per cent to Rs 69.45 crore from Rs 37.13 crore for Q1 FY05. Operating margins as a percentage of net sales improved 250 basis points to 8.65 per cent from 6.11 per cent.
The company managed to keep operating expenses under check. Cost of inputs for the quarter increased by 28.05 per cent while other expenses rose 25.45 per cent. Staff costs increased at a faster pace of 40.04 per cent.
When compared to the previous quarter ended December 2005, profit declined 45.78 per cent as revenues dropped 18.04 per cent. Operating margins were a high 14.12 per cent during the December quarter. Sequential comparisons are not relevant for engineering companies as order executions get lumped during some quarters.
The company's order book rose by Rs 1,401.9 crore during the quarter, an increase of 57 per cent over the same quarter of previous year. The order book at the end of the quarter stands at Rs 2,674.3 crore.
ABB inaugurated a new facility for manufacturing low voltage motors and control gear in Bangalore during the quarter. The company is planning to set up a low voltage distribution electrical unit at Haridwar.