Here Is Why ABB Shares Surged Most In Over 4 Months

Shares of heavy energy equipment maker - ABB - rose as much as 11.58 per cent to hit an intraday high of Rs 2,247 on the BSE making it the top gainer among the shares traded under the futures and options segment of the National Stock Exchange. ABB shares were witnessing very high trading volumes as 32,000 shares changed hands on the BSE compared with an average of 4,800 shares traded daily in the past two weeks. In the options segment, premium on ABB's Rs 2,200 strike price call option zoomed 328 per cent to hit an intraday high of Rs 103 from its previous close of Rs 38.

Here is what is fuelling a rally in ABB shares

ABB's net profit more than doubled to Rs 373 crore in March quarter compared with Rs 141 crore during the same period last year. Its revenue from sale of products and services jumped 21 per cent to Rs 1,954 crore versus Rs 1,618 crore in the year ago period. The profit was mainly driven by higher volumes, better product mix, and higher service content, ABB said in a press release.

"During the quarter, the Company has sold the turbocharger business to its wholly owned subsidiary Turbocharging Industries and Services India Private Limited. In this regard, profit on sale amounting to Rs 293 crore has been disclosed as exceptional item in the financial results for the first quarter ended March 31, 2022," ABB said.

Strong Order Book

ABB's total orders surged to Rs 2,291 crore, the highest in a quarter in last five years, the company said. "The year also started with a healthy increase in export orders across multiple businesses. This demonstrates consistency in leveraging the growth momentum and customer connect across segments, in domestic markets and globally," ABB said.

"ABB India continues to have a strong order backlog as of March 31, 2022, at Rs 5,229 crore, which provides revenue visibility and is well aligned to support growth plans in the coming quarters," the Delhi-based company said.

Meanwhile, the company has warned about geo-political scenario impacting its business.

"Geopolitical uncertainties, supply chain disruptions, inflationary impact on fuel and food prices along with other commodities are key factors which are being monitored across the globe. ABB India will also look out for inflationary pressures, resurgence signs of the virus, currency fluctuations, the trajectory of supply chain disruptions and its impact on the identified market segments in the country," ABB said.

As of 11:51 am, ABB shares traded 11.15 per cent higher at Rs 2,238, outperforming the Nifty which was up 1.2 per cent.