ABB LTD One of My Stock Pick

ABB touched a 3-year low at Rs.365. Then once the results were announced, the stock bounced back on value buying. The results were nothing spectacular.
For the year ended 31st Dec 2008, the growth can more or less said to be flat. But what needs to be noted is that its interest cost during the year has cost up considerably, especially in the fourth quarter. For the year, interest outgo was at Rs.32.53 crore, which is 4.78 times more than what it had in previous year. There has been an increase in the employee cost by 31% and raw material costs rose 16%. Also its other income for the year has slipped down to Rs.21 crore from Rs.71 crore posted last year.

What is worrying though is that there has been a decline in the order book. The company booked orders worth Rs.8054.10 crore during the year ended 2008, a 5% rise. But order intake for Q4 2008 was down 37% at Rs.1261 crore. With already lower OPMs and NPMs, increasing interest outgo and other expenses, the first half of 2009 could see some slowdown. Thanks.