ABB India's margin slips again as costs outpace revenue growth
Standalone revenue grew 12.07% year on year, but operating margin fell 0.48 percentage points and remained below the Industrials peer median.
Filed 31 Jul 2026, 17:24 IST · after market close · ABB India Ltd (ABB)
Key takeaways
- Standalone revenue rose +12.07% year on year, but expenses grew faster at +12.69%, narrowing operating margin by 0.48 percentage points.
- Net profit increased only +3.00% year on year to Rs 362.30 cr as other income contributed 18.58% of pre-tax profit.
- Operating margin fell to 12.56%, 1.80 percentage points below the 14.36% median for 33 reported Industrials peers.
Price around the results
Revenue grew, but profit conversion weakened
ABB India reported standalone revenue of Rs 3,558.87 cr in Q1FY27, up +12.07% year on year and +11.77% sequentially. Operating profit grew only +7.96% year on year, while net profit rose +3.00% to Rs 362.30 cr. The sequential net-profit comparison is distorted by the Rs 1,783.65 cr reported in Q4FY26, but operating profit still increased +9.46%.
Costs drove the margin decline
Expenses grew +12.69% year on year against revenue growth of +12.07%, reducing operating margin by 0.48 percentage points; sequentially, costs also grew faster than revenue and margin fell 0.27 percentage points. The tax rate was broadly stable at 25.80%, so the lower net-profit growth was not driven by a tax-rate benefit. Other income made up 18.58% of pre-tax profit, making reported earnings less reliant on operating profit alone.
Margin is below peers after two quarters of decline
Operating margin has declined for two consecutive quarters from 15.36% in Q3FY26 to 12.83% in Q4FY26 and 12.56% in Q1FY27. ABB India's margin was 1.80 percentage points below the 14.36% median among 33 Industrials peers that had reported the quarter. The current margin was therefore below the sector comparison even as revenue growth remained in double digits.
Management points to water and wastewater as a multi-year theme
Management said the mid-term growth outlook for water and wastewater is approximately 10% CAGR from 2025 to 2030. The company described this as a structural, multi-year theme supporting ABB India amid global volatility. Management also flagged geopolitical uncertainty, currency fluctuation and a subnormal monsoon as macro factors to monitor.
No immediate market reaction after the post-close filing
The results were filed after market close, so no immediate price response is covered here. After the last five results, the stock rose twice and fell three times, with a median absolute move of 4.68%. The recent moves ranged from -8.91% to +4.68%, indicating that the historical response has generally been negative but variable.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,559 cr | ₹3,184 cr | +11.77% | +12.07% |
| Other income | ₹93 cr | ₹100 cr | -7.00% | -7.10% |
| Expenses | ₹3,112 cr | ₹2,776 cr | +12.11% | +12.69% |
| Operating profit | ₹447 cr | ₹408 cr | +9.46% | +7.96% |
| Operating margin (%) | 12.56% | 12.83% | — | — |
| Interest | ₹2 cr | ₹4 cr | -55.12% | -59.19% |
| Depreciation | ₹39 cr | ₹42 cr | -7.39% | +10.38% |
| Profit before tax | ₹499 cr | ₹462 cr | +7.99% | +5.20% |
| Tax | ₹129 cr | ₹120 cr | +7.29% | +5.47% |
| Net profit | ₹362 cr | ₹1,784 cr | -79.69% | +3.00% |
| EPS (₹) | ₹17.09 | ₹84.18 | -79.70% | +2.95% |
Operating margin of 12.56% compares with a Industrials sector median of 14.36% across 33 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- ABB India’s mid-term growth outlook for water and waste-water is approximately 10% CAGR from 2025 to 2030.
- ABB India describes its outlook as a structural, multi-year theme supporting the company amid global volatility.
Problems & risks
- The macro factors identified include geopolitical uncertainty, currency fluctuation and a subnormal monsoon.
What to watch
- Whether operating margin recovers from 12.56% after two consecutive quarterly declines.
- Whether expenses continue to grow faster than revenue after the +12.69% versus +12.07% year-on-year gap.
- Management commentary on water and wastewater demand against its approximately 10% CAGR outlook for 2025-30.