Fundamentally strong stock in focus after it acquires power business of Spanish Co.

During Thursday’s trading session, the shares of a global technology leader in electrification and automation are in focus, after the company announced signing an agreement to acquire the power electronics business of Gamesa Electric in Spain. 

With a market cap of Rs. 1.57 lakh crores, at 12:02 p.m., the shares of ABB India Limited were trading in the red at Rs. 7,412.85, down by nearly 3.2 percent, as against its previous closing price of Rs. 7,655.45. 

What’s the News? 

ABB India Limited, as per the latest regulatory filings with the stock exchanges, announced signing an agreement to acquire the power electronics business of Gamesa Electric in Spain from Siemens Gamesa. 

This acquisition aims to strengthen ABB’s position in the growing market for high-powered renewable power conversion technology. The transaction is expected to close in the second half of 2025. 

The acquisition will significantly expand ABB’s portfolio of power conversion products and services for renewables OEMs and end users. It will also add new engineering assets to support the profitable growth strategy of ABB’s Motion business area. 

Strategic Benefits of the acquisition: 

Gamesa Electric’s power electronics business reported revenues of ~€170 million for the fiscal year ending September 30, 2024. 

ABB’s acquisition focuses on electrical products for power conversion, including doubly-fed induction generator (DFIG) wind converters, industrial battery energy storage systems (BESS), and utility-scale solar power inverters. 

This transaction will enhance ABB’s expertise with over 100 highly specialized engineers and two Spanish converter factories located in Madrid and Valencia. 

The deal also aims to increase ABB’s serviceable power conversion installed base with the addition of around 40 GW, leveraging ABB’s global organization to access new service, modernization and repowering opportunities. 

In addition, ABB plans to enter into a supply and services agreement with Siemens Gamesa. 

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Financials:

ABB India reported a marginal growth in revenue from operations, experiencing a year-on-year increase of nearly 5.2 percent, rising from Rs. 2,769 crores in Q2 FY24 to Rs. 2,912 crores in Q2 FY25. 

Similarly, the company’s net profit increased from Rs. 363 crores to Rs. 440 crores over the same period, representing a growth of around 21.2 percent YoY. 

Stock Performance: 

The stock has delivered positive returns of nearly 53 percent of returns in one year, while around 13 percent of negative returns in the last six months. So far in 2024, the shares of ABB India have given positive returns of about 58.5 percent. 

About the Company: 

ABB India Limited is engaged in the business of offering a complete range of engineering, products, solutions and services in areas of Automation and Power technology. It has an extensive installed base for manufacturing and a countrywide marketing and service presence. 

ABB’s offerings include MV & LV switchgears, LV components, BESS, motors, electrical drive train pkg, rectifiers, electrolyzer, wind turbine controllers, automation & instrumentation, robotics & digital solutions. 

Written by Shivani Singh 

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