ABB India Says It's Able To Pass On High Input Costs To Customers
The customer pipeline is expected to remain strong especially in the energy efficiency area, robotics and the core sector.
ABB India Ltd. said it has passed on input costs to its customers.
“Due to the short cyclability of our products and solutions, we are able to pass on the cost to the customers,” Sanjeev Sharma, managing director and country head of ABB India Ltd., told BQ Prime's Niraj Shah in an interview. “Customers do recognise the inflationary pressures in the market, and most of the customer lines have been adaptive in terms of taking that pass through from us into the cost.”
The global technology company's standalone net profit nearly doubled sequentially at Rs 373.07 crore in the quarter of ended March. Its EBITDA margin stood at 8.24% compared with 7.73% in the previous quarter.
The company also follows gross hedging on order prices rather than net hedging, which helps maintain profitability of each business unit, ABB India’s Chief Financial Officer TK Shridhar told BQ Prime. "Our efforts are to make sure that we remain credible in our performance in the quarters.”
Sharma underscored the robust domestic and international demand at all levels of the market–customers, integrator, original equipment makers and other channels.
Strong growth is expected to continue in robotics, especially in automotive, electronics manufacturing, food and beverage and pharmaceuticals, he said. “The Indian industry is coming of an age wherein they are using lot of automation in manufacturing and operations, and we are seeing an uptick in that.”
The customer pipeline is expected to remain strong, especially in the energy efficiency area, robotics, and the core sector provided there are no “market surprises”, he said. “Electrification portfolio is also picking up and when the real estate cycle picks up, that is also going to help us grow.”
Focus On ESG
Shridhar highlighted the company’s efforts to “turn factories green” and to make it “future ready in terms of sourcing by the export customers”.
According to him, most of the customers in India and abroad like their suppliers to be Environmental, Social, and Corporate Governance compliant. “ROI (return on investment) calculations are also positive for investments in ESG.”
Watch the full conversation here: