NEW YORK: Engineering services firm ABB India opens new tab reported a 7% drop in its third-quarter profit on Thursday, as higher expenses and fewer new orders dampened gains from the execution of pending projects.
The India unit of Switzerland’s ABB, opens new tab reported a profit of 4.09 billion rupees (USD46.53 million) in the three months ended September 30, from 4.4 billion rupees a year ago.
Excluding large one-off deals, new orders for the capital goods sector fell about 20 percent year-on-year during the quarter, according to analysts at Elara Capital, who add that order momentum should recover in the second half of the fiscal year.
Muted private-sector capex has also weighed on demand for engineering services firms amid stiff competition, analysts at Ambit Capital said.
ABB India’s overall orders during the quarter fell 3 percent to 32.33 billion rupees. A 24 percent surge in the cost of raw materials pushed ABB India’s total expenses up 18 percent during the quarter.
Analysts said higher metal prices, especially copper, likely added to ABB India’s input costs during the quarter. ABB India is a key player in the capital goods space - firms that manufacture and supply industrial equipment and system - with a focus on power, transport and clean energy. It provides automation, electrification and motion solutions.
Revenue from its biggest electrification segment, which makes solar inverters and wiring accessories, rose 19 percent, while that from its motion segment grew 9 percent.
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