ABB down for 2nd day on Merrill Lynch report after Q4 nos

Shares of ABB - the leader in power and automation technologies - hit a new 52-week low of Rs 558.10 (down more than 4 percent) on Friday as  research firm Bank of America Merrill Lynch put up an underperform rating on the stock.

Merrill Lynch also cut its target price to Rs 500 for the stock. "ABB is the most expensive capital goods stock in India, supported mainly by limited float and hope of a minority buyout," the firm reasoned.

The stock fell for the second consecutive session today. On Thursday, it was down 4.5 percent after its profit dropped 73.8 percent year-on-year to Rs 16.8 crore in the quarter ending December 2012.

Even net sales went down by 5.4 percent to Rs 2,052.8 crore from Rs 2,169.6 crore during the same period. Other income fell quite sharply to Rs 2.8 crore from Rs 27 crore YoY.

"Our products businesses delivered improved profitability. However, project businesses faced several challenges due to anticipated cost overrun mainly caused by project delays on account of external factors," ABB explained.

The company also disheartened by its operating performance. Earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 14.4 percent YoY to Rs 66.6 crore in the quarter ending December 2012. EBITDA margin dropped 40 basis points year-on-year to 3.2 percent in the fourth quarter.

At 10:43 hours IST, shares slipped 2.6 percent to Rs 568.15 on Bombay Stock Exchange.