ABB India margin drops 2.53 pp as stock falls 8.91%
Costs fell slower than revenue, while net profit jumped 312.07% despite a 20.03% fall in pre-tax profit.
Filed 08 May 2026, 17:19 IST · after market close · ABB India Ltd (ABB)
Key takeaways
- Sequential revenue fell 10.48% while expenses fell only 7.81%, cutting operating margin by 2.53 percentage points to 12.83%.
- Net profit rose 312.07% sequentially even as pre-tax profit fell 20.03%, with other income equal to 21.57% of PBT.
- The stock fell 8.91% on the first reaction day, a larger move than the 4.68% median absolute reaction after the last four results.
Price around the results
Revenue contraction outpaced the profit decline
ABB India’s consolidated revenue fell 10.48% sequentially to Rs 3,184.06 cr, while operating profit declined 25.24% to Rs 408.40 cr. The sharper profit fall indicates that the lower sales base carried weaker operating leverage in Q4FY26. Management said profitability was affected by a combination of market and cost-related factors.
Costs narrowed less than revenue, squeezing margin
Expenses declined 7.81%, slower than the 10.48% revenue fall, so operating margin narrowed 2.53 percentage points to 12.83%. This reverses the improvement from 15.11% in Q2FY26 to 15.36% in Q3FY26 and leaves the latest margin 2.83 percentage points below the 15.66% median for 71 reported Industrials peers. Interest expense fell 28.79%, but that was not enough to offset the operating pressure.
Reported profit diverged sharply from pre-tax performance
Reported consolidated net profit rose 312.07% sequentially to Rs 1,783.65 cr even as PBT fell 20.03% to Rs 461.87 cr. Other income accounted for 21.57% of PBT, while the tax rate increased 1.17 percentage points to 25.97%, so the net-profit surge does not track the operating or pre-tax trend. The divergence makes the quality and composition of reported profit an important point to reconcile.
Orders were positive, but the market reaction was unusually negative
Management said ABB India saw strong order momentum from emerging segments in Q1 CY2026, with significant wins across data centres, renewables and industries. The company described its mid-term outlook as strong for emerging industries and renewables, healthy for infrastructure and transport, and modest for core industries. The stock fell 8.91% on the first reaction day and was down 8.54% after five sessions, versus a 4.68% median absolute move across the previous four result reactions.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹3,184 cr | ₹3,557 cr | -10.48% |
| Other income | ₹100 cr | ₹76 cr | +30.54% |
| Expenses | ₹2,776 cr | ₹3,011 cr | -7.81% |
| Operating profit | ₹408 cr | ₹546 cr | -25.24% |
| Operating margin (%) | 12.83% | 15.36% | — |
| Interest | ₹4 cr | ₹5 cr | -28.79% |
| Depreciation | ₹42 cr | ₹40 cr | +6.86% |
| Profit before tax | ₹462 cr | ₹578 cr | -20.03% |
| Tax | ₹120 cr | ₹143 cr | -16.27% |
| Net profit | ₹1,784 cr | ₹433 cr | +312.07% |
| EPS (₹) | ₹84.18 | ₹20.43 | +312.04% |
Operating margin of 12.83% compares with a Industrials sector median of 15.66% across 71 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -8.91% | -7.42% |
| Next session | -9.75% | — |
| 5 sessions | -8.54% | -6.37% |
| 15 sessions | +1.90% | — |
| 30 sessions | +2.08% | — |
Volume on the results session was 5.03× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- ABB India reported strong order momentum from emerging segments in Q1 CY2026.
Guidance & outlook
- ABB India targets 88% Scope 1 and 2 GHG emissions reduction in 2026.
- ABB India targets 50% water recyclability in 2026.
- ABB India describes its mid-term outlook as strong for emerging industries and renewables, healthy for infrastructure and transport, and modest for core industries.
New orders
- ABB India reported significant wins across data centers, renewables and industries.
Problems & risks
- ABB India said profitability was impacted by a combination of market and cost-related factors.
What to watch
- Whether operating margin recovers from 12.83% after the 2.53-percentage-point sequential decline.
- Whether other income remains close to 21.57% of PBT.
- Progress against management’s stated 88% Scope 1 and 2 emissions-reduction target for 2026 and 50% water-recyclability target.