Looking at the chart, ABB (CMP:1394) has to sustain above 1460 for short term target of around 1527-1550. Consecutive closing above 1550 zone, it may scale 1750-1800 & 1900 area in the mid to long term.
On the flip side, immediate support is around 1371 followed by positional support of 1354-1305 territory and sustain below that 1270 may be an ideal area to accumulate it. Consecutive closing below 1270, it may crashed to 1170 area again (low probability as of now).
Although it appears that ABB is an expensive stock (current PE is around 129.17 against industry average PE of 45.82), being a MNC (Power & Automation technology provider), it has strong balance sheet & it is targeting double digit growth going forward.
ABB (India) is on the path of gradual improvement in its profitability led by cost reduction measures & increased localisation. ABB is actively procuring good orders regularly from various stake holders and its order books (emphasis on short cycle order & preference continue to be cash over profits) expected to be remain healthy in the coming days. Its also very active in solar power sector.
With expected demand outlook improvement of capital goods in "Shinning India", specially for power sectors and along with it, ABB's focus on exports & services and its brand image, it may be another "Bright Spot". It may also play an important role in the proposed upgradation of Indian Rail Ways in future.
As par BG metrics of quick TF model, median valuation of ABB is around 1260 by considering its TTM EPS+Div of around 14.50. But, if we assume projected FWD EPS+Div (FY-17) of around 22, the median value is around 1550 under the current market scenario.
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LONG TERM | SHORT TERM | MEDIAN VALUE | 200-DEMA | 10-DEMA |
| ABB | 14.5 | 132.7 | 87.5 | 1218.71 | 1298.88 | 1258.80 | 1170.65 | 1329.73 |
| ABB | 22 | 146 | 87.5 | 1501.17 | 1599.92 | 1550.54 | 1170.65 | 1329.73 |
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