Thank you. We will now begin the question-and-answer session. The first question comes from the line of Sumit Kishore with Axis Capital. Please go ahead.

My first question is in relation to your margins. Your profit margins for the quarter are closer to the lower end of the white band of 12% to 15% that you wish to operate in. Qualitatively, if you could elaborate whether margin pressures around material cost, the market dynamics, post - COVID correction are all factored in or we still have some room to go ? Can this be the new normal for profitability in coming quarters after the record highs that we saw in the last calendar year? So, your comments here will be very useful. That is my first question.

Sumit, I think when I had definitely elaborated more than adequately on the profitability movement segment by segment at an overall level, right? So, I think that is already answered. So, I don't want to repeat it again because that is the same thing. So, now the question is, and as rightly, even in the last calls which we had said, so we are at the lower end of the percentage is what we want to operate in. And we are doing it at a pretty high levels of 15%. That probably registered in the mind as a new normal for quite a few of the markets. But I think we are at the end of the day in an engineering industry. And so we have our cyclical impacts to be handled. Coming back to what are the topics? I don't thin k we don't have any one-off topics other than what we told about the mix, the market dynamics as what we understand, which is more related to the competition scenario playing out on the limited investment decisions what we have, and of course the FOREX and the QCO. So, I don't have anything much more than that. When will we improve or move forward as in this particular journey? Probably I think the QCO should be addressed in another three to four quarters is what we see because that is the timeline what the government has also given. And therefore, I should assume that that is what the time with everyone industry will take. That is how it is. And the balance part is dependent on how the market develops and how private consumption and the investment decisions on the public sector happen. So, that is how we see. And just to give a bit of more color to our answer on this, do we find opportunities drying out at this point of time? No. Yes, the opportunities are there, but the decisions are delayed and the choice of customers today are quite variant. And the only thing , a factor which is probably unknown at this point of time on account of geopolitical topics between, how does it play out is what we need to see, right? So, that is something which is unknown at this point of time and left to the best guess of you guys.

So, in the backdrop of what you said and what Sanjeev mentioned on the call earlier, well, base orders are higher up 13% year-on-year. They are stable quarter-on-quarter. So, is it right for us to sort of interpret that given the decision making is a bit deferred in the backdrop of the macro environment geopolitical tensions, is this level of base orders absolute terms likely to persist for some time before we see a breakout because of a more diversified CAPEX cycle playing out? So, across three segments, the main ones, electrification, motion, and process automation, how should we think about where we are in the CAPEX cycle and how this can play out over the next 12 to 18 months?

We have had a very good cycle post -COVID wherein we enjoyed very good growth both in expansion of orders, revenues, profitability, and all elements. And that was on back of India growth story as well as lot of CAPEX put in by the government in the right places. And also we had a good support in our segments that we were focusing the new segments, mid segments, and also large core segments. At this point in time for last few quarters now there is sluggishness in the market in terms of CAPEX formation as well as expansion projects. They are at a good level, but they are not in a very strong expansionary mode. So, from our perspective, this is a cycle which comes as a correction after a strong growth. Whether it takes one quarter, two quarters that our perspective is this is going to come back. The growth is going to come back, and we will ride that cycle because our 18 divisions focus on this very dynamic 23 market segments. The moment the order intake and the order formation takes place, it will directly reflect in our books in the orders , revenues as well as in the capacity utilization, which directly impacts profitability as well.

Next question comes from the line of Renu Baid with IIFL Capital.

I have two questions if they can be addressed. The first would be given that the team has mentioned that they are seeing some green shoots in base orders and tariff settlement is near, do you expect pickup in the investment cycle or broad -based pickup in large order finalizations, which has been not the case for the last two to three quarters? So, what would be your view on the likely revival or recovery in the CAPEX momentum? And if the momentum is the way it is there today with flattish book and just early teens growth in base orders, would you think it would be possible for ABB to manage double-digit growth in CY2026? Probably that too would be a year of moderation of consolidation like 2025. And in case if you can give any comment, NVIDIA the recent relationship on which NVIDIA and ABB are working together for solid state drives for AI data centers. In your view, by when you think the product service market would be available and ready? And in case if that product is available in India for ABB, to what extent it can increase the TAM for us in the DC market?

So, Sanjeev, I think we could invite Kiran and Sanjeev Arora on this, because they are reading the market quite stronger for EL and MO or any of 75% of our business. So, I have Kiran over here. Kiran, so you could throw some colour on Electrification and Motion, Sanjeev Arora could throw some colour.

Thank you, Sanjeev, and Sridhar. I think it is a good question in terms of the market how it is behaving and also a quite elaborate question in terms of what exactly we are trying to do in data centers as well. I think let me pick up from few of the segments of the market. Let me just pick up something on renewables, rail and maybe something on dat a centers since the question is there. Now, when I look at the way renewable sector is behaving, what we see is a good expansion in terms of the renewable market. Specifically, when it comes to renewable, I am also looking at something known as battery energy storage systems, which we call it as BESS. So, that is something which is really topping on the charts in terms of the opportunities which is available for the future as well. And we are also looking at something on green hydrogen, which is also becoming very prominent as a sector in the market. When I look at rail, you have seen lot of expansion across investments from the government and also into the metro sectors, metro rail across the various cities of India. So , that is something which is an investment which is coming across. And we find that this is going to really contribute to the base orders going forward. On the data centers, when I look at it, I segregate into two parts: one in terms of hyperscale and the second one in terms of the colocation data centers. When I look at hyperscale, yes, there is a bit of a sluggish kind of a movement in India at this point of time or probably in the Q3. And we are also looking at EBIT in terms of sluggish growth there in hyperscale. But at the same time, what is important to understand is how exactly the colocation data centers are behaving. I think colocation data centers, there is a huge demand for them in terms of the capabilities what they can extend and also the difference of the customers and they want to have colocations, which is really supporting them in their day-to-day processes. So, we feel that data centers in colocation would grow and we have seen substantial growth in Q3 as well. And we would like to go forward with our services and solutions to them even this quarter as well and last quarter as well we have been doing the same. Maybe over to Sanjeev Arora.

Thank you, Sridhar. Thank you, Sanjeev. And thanks, Kiran. I think I echo what Kiran has just mentioned, so giving a flavor of the discrete part. Base load orders as Sridhar has mentioned, they have been very good for us. And that shows the early signs of positivity in the market demand. Because when we compare to last few quarters, yes, there was a challenge. And Kiran has well explained on the segments part. But then when we touch upon the cement and the steel and the oil and gas part, I would say that the investment cycle has started in these segments as well. So, cement, we are seeing a bit of a revival and upturn in the investment. Same goes for steel industry. And also we do see a good pipeline in the oil and gas sector. So, yes, the markets will be a bit dynamic. Price pressures will be there. But the good part is that demand will also be sustained in the coming quarters as we see now. So, that is the comment from my side.

Thanks, Sanjeev. Thanks, Kiran. So, Renu, I think hopefully this gives you a more granular view than at the company level. So, because at least only process automation and robotics, so process automation forms only 13% and we alluded. And that sums off the comments which Kiran and Sanjeev have given also applies to them in a way. So , I think overall, we feel that the market would be at similar levels as what we see at this point of time in the next one or two quarters. And then probably we could see some things which could be on the positive side as what is the assumption at this point of time.

Anything on the NVIDIA opportunity or TAM for India? The recent engagement with ABB parent with NVIDIA for AI data centers to develop solid state drives and cooling solutions. In your view, can the solutions be available to ABB in India, when the products are prepared and ready? And to what extent it can increase our TAM in this particular segment.

So, at this point of time, I don't have the complete details of this particular deal. I know as much as you know in terms of intent of ABB Express with NVIDIA. But as a principle, if there is no geographical restrictions or obligation of those technologies, all technologies ABB develops, they are naturally available to our customers here in India.

The next question comes from the line of Atul Tiwari with JP Morgan. Please go ahead.

Sir, my question is on this QCO. Could you elaborate a little more on what exactly is the nature of this QCO order, which is leading to higher imports? And how long this impact will continue before you adjust to the QCO fully?

So, Atul, I have actually in my commentary elaborated quite a bit including what is the impact on QCO, right? I think probably people joined in late or missed out what I said. What is QCO? The government in its mission for Atmanirbhar Bharat has wanted to create a system where Indian manufactured or developed products are more used. And before they use, I think they had to be tested and qualified by the Bureau of Indian Standards and that is something which is getting done. So, till now it was not mandatory, but now it has been made mandatory. So, therefore all the products have to be, whatever we manufacture including the subcomponents have to go through the testing and certification of these particular institutes. And it takes a lot of time because the number of labs are less, the number of slots are less and there are so many people competing for the same slots. And therefore, it is definitely a problem. So , probably I think, that is exactly why the government also keeps extending these particular deadlines, because they know that there is a capacity issue which they have to address, right? But now on the other hand, having come to know that this is problem on hand, we need to draw a decision which is better in terms of serving the customers. We have no other option, if we want to keep the customer serviceability as the main criteria , but to use imported material to make sure that are already certified for the global laboratories that which could be used, right? So, that is something what is QCO about and how are we handling that. So, to address this because there is going to be definitely a lot of time which will be taken to get our product certified and so forth the others as well. And therefore, in the interim, we have no other option but to import material to serve our commitments to the customers. So , what does this mean? What used to be locally developed and which we are using at a cheaper cost, which we now need to import for the base cost itself increases, number one. Number two is that you have a FOREX which is attached to this particular transaction. So, that is also subject to volatility. So , you have an impact on both. So , how long will it continue? It could continue as what I said to another three to four quarters is what I mentioned.

So, very perversely, this order which was designed to promote Indian manufactured equipment is leading to higher imports. So, that is what I wanted to understand. So, as an industry, are you guys not representative of government than that it is serving the opposite purpose of whatever was intended?

We have done through a lot of other associations everyone. Every industry is making sure that it is representing itself to the right authorities to do it. But this is a government objective.

Atul, you can also help us by writing analyst report and publish it in the major media. And Sohini can help you with all the information. Any help that we can get to get this thing through is always good. But it is a matter of time. It will be sorted. But yes, that is the stage we are right now.

We need to go through it, Atul. We have no other way, okay? But it is good in the overall interest of the nation in the long run. That is how we look at it, okay?

Next question comes from the line of Lavina Quadros with Jefferies. Please go ahead.

Just wanted to check, sir, on the robotics arm, I am sorry if I missed it if it was discussed earlier. But on the robotics arm, given the parent has sold it at a valuation, earlier there was a thought that maybe the robotics arms gets listed separately. I mean , how are the Indian shareholders going to get compensated for it? Just to understand. Will the arm be separated out? Or will the valuation be in line with what is being offered to the parent?

So, we had made it clear at a global level that the robotics business will find its own footing, so that they can find their growth path in future. And then initial interest was to list that company. But then in the interest of the shareholders, we got a very good offer from SoftBank and Global Board decided to choose SoftBank to be the future owner and take this business forward. As far as India assets are concerned, these assets will be evaluated by the Board, Independent Directors included. And we will follow the due process of evaluating it. After the valuations are done like we have done in the past and the local Board is satisfied , based on that valuation , separation of this asset will be done into a new company. But then this is something is not given. This is subject to ABB India Limited’s Board approval.

Sir, just lastly on this only. So, listing is unlikely, but a separate valuation will be decided and then you will follow the due course process. Broadly at least as of now that is what seems to be the case.

Absolutely. So, that is how these assets are dealt with. And if you see the history of similar assets separated from ABB India Limited, we follow a very tight governance model and that is led by the ABB India Limited Board.

So, you said that the pipeline for energy industries and process industries, that is still there. And is this just a problem of conversion to orders? And are you seeing that pipeline is increasing? Or is there an underlying issue with the demand or any loss of market share there?

Is this question for a specific market segment?

No. I think it is for process industries in general, process automation which is oil and gas, cement, steel, and other core sectors. Balaji is not there. Balaji is not there on the call. I think he is with the customer.

So, as such, if you really look into the focus of ABB into the process industries, we have very distinct focus on market segments like oil and gas. We have mining. We have cement. We have pulp and paper, and metals. So, these are the market segments, which we participate with their CAPEX cycle as well as their OPEX cycle. And CAPEX cycle is sometimes the greenfield project and sometimes it is the expansion of the project. And also sometimes they have the upgrade of their digital infrastructure, energy efficiency infrastructure. So, we find that in these sectors given they are the continuous industries, they continue to invest in all the cycles. It is the intensity changes only when the greenfield projects kind of are announced or major expansions are announced by these players who are operating in this market. So, our typical drumbeat and our rhythm is around OPEX as well as the expansion in the normal course of the business. And that we see is quite robust at this point of time. And that continues to be robust because these are substantial industri es. They have to continue to invest into the area we are. Now when it comes to the major expansion, the greenfield expansions, in certain market segments, we definitely see there is a greenfield expansion, but it is not widespread. And I believe the cycle of the demand versus how much capacity is available, there is likely to be an upsurge in the capacity utilization of, so that is probably capacity expansion of many of these segments. At the same time, one has to also keep in mind, this is something which I cannot say as confirmation. But in the news media, there is a clear mention that between India and China now there is a thaw of relationship, and more and more businesses are opening up. So, it is unclear what will be the impact of Chinese imports in the country. So, I think all our customers who are in these process industry segment , they will be also evaluating very closely how this will play out , whether the Chinese imports will flow into the market in an uncontrolled way, whether that will impact their price realization in the market. So, I think that part is unclear at the moment and that will define the future demand curve for these industries in our opinion.

If I can squeeze in one more just coming back to again QCO one. There was a deadline in November '25 as well for some of the products. So, just I also wanted to check if I understand clearly that imports, the TC related imports that we keep on doing, is that the right way to think of? We had earlier imported in, I think, March, April, May, in that quarter. And probably going ahead, we have to keep importing unless you build the certifications.

Yes. So, what happens is this. The government keeps moving these particular dates, right? So, what has come in what we thought as we were working in the second quarter, that November is a date before which we have to close this. And in case if we don't do it, then you have to definitely use the important subcomponents what we require, right? But we go with that anticipation. And we try our best to get it qualified in the laboratory, right? But if we see that there is a delay, we have no other option but to make sure that we have to import more for future requirements. But then the government as we neared to th is thing, the government takes a call to extend it. So , this is basically exactly what they said. So, now the government keeps moving these deadlines depending upon how the progress is and how they are able to monitor this particular process. So, we need to go with that and be in line with the process for certification. There is no, definite saying that it will close at this rate come what may. It is not going to happen because as I mentioned earlier , the capacity is less vis-à-vis the work to be done, which is humongous, right? So, that is taking more time. And therefore, we have to go along with what the government is directing us to do.

Next question comes from the line of Amit Mahawar with UBS. Please go ahead.

Good morning, Sanjeev, and Sridhar. Congratulations on maintaining a very good order momentum in base orders, better than industry maybe. Sir, I just have one question. You have the book in process automation, which is maybe around 30%, 40% down. EP is the only segment where we have grown very well, 15% top line. And I don't worry about margins , etc., on this issue. But do you think in CY '26, we can touch a 10%, 12% revenue growth given that mobility orders will take some time, given that energy is not a large basket for us and the discrete portfolio for us is growing more in just short of teens or less than that. So, a quality of assessment, Sanjeev, which will help us.

So, I think it is fair to say as process automation is concerned net of robotics, it will be only 13% of our portfolio 12% to 13% of our portfolio. So , we take benefit of industry cycle whenever there are large CAPEX projects and the large, consolidated orders coming to us or system orders coming to us. Other than that, we continue to gain on the ETO, which is engineered to order business, which is largely sitting in MO and EL. So, that continue to benefit. And then, of course, we have the EL business, which is the product business, which is made to store and made to order fast moving products in the marketplace. So, in the made to order, made to store and ETO, I think the business is quite robust. And we do feel that given the backlog that we have , the execution of it is well lined up. They are clean orders. So, we will see an uptick of revenue growth with that as we go forward both in EL and MO. But then there are some long gestation orders sitting in the mobility side that you are right. So, I think if you net that out, I think rest of the book to bill orders as well as in the EL and MO will continue to push the revenues upwards. And as far as the PA is concerned, it goes through the cycle. So, we have seen it for a very long period of time. And whenever the cycle on the large orders pick up in that area, of course, they positively contribute to us.

Next question comes from the line of Rahul Gajare with Macquarie Capital. Please go ahead.

I just have one question. You have touched on delay in order finalization, I think, in your opening remarks. Now, it is very clear that I think the entire order inflows are supported by base orders. But in the last four quarters, we have got only Rs. 400 crores of large orders. I want to understand if you could highlight discussion with clients and if it is further possible to quantify the kind of large orders that we are looking at over the next maybe three to four quarters, I think that will be helpful.

So, normally, we don't give this particular future projection as such, right? So, we just only give a color on how the markets are and that's exactly what Kiran or Sanjeev or Sanjeev Sharma did allude to at this point of time. So, I mean, when it is large orders definitely are widespread in all the three business areas such as electrification, motion, and process automation. What we are saying is at this point of time the opportunities are there, but the decisions are getting delayed. It is not going the same pace as what it is. But I think the good part is the base orders keep growing and which is what our focus is. So, I think to be honest, we cannot give a direct sort of a projection or a number to this particular question. I am sorry, that is the sort of policy which we have.

In that case, is it possible you all can highlight the kind of growth that you are thinking of when you are talking about classifying certain industries into high growth or medium growth or low growth? Is that something you can do?

Actually, we don't give any growth projections, right? So , we only say our ambition is to be there in the trajectory of how the market is moving and what do you call , maintain that momentum of what we have seen. And I think, of course, post COVID, we had a very, very fast growth trend which is now softening out. So, our always ambition is to be in the double -digit corridor as what Sanjeev was mentioning earlier.

Appreciate that.

Next question comes from the line of Aditya Mongia with Kotak Institutional Equities. Please go ahead.

My question was more at a broad portfolio level gaps that you see emerging as the market conditions change as well as opportunities that may be coming in the market that we don't currently serve. In a sense from an inorganic perspective, how actively are you thinking about your portfolio at this point of time?

So, I can take this. So, at a global level with the robotic sale as well as how we generate cash, I think we are a quite robust company globally. And also at a local level , our cash reserves are quite healthy. So, our global CEO in the last call has made it very clear that ABB is looking for large ticket inorganic options around the world. And whenever such options are exercised, they also have a footprint effect in India and we participate with our books in those acquisitions as well. So, that is one part which is very much in the play. And I think that is a very strong and solid intention of the management to grow our bolt on portfolio. So, that is what we are looking for that the existing businesses should acquire businesses which complement their existing portfolio and also their ability to serve their customers even more effectively or the channel partners or the channels even more effectively. So, that is very much on. And we also have a similar focus in India for inorganic approach other than the global, wherein we do have a list, but it takes two to tango. So, that we are working on. And we stay again focused on the bolt on opportunities for the existing businesses and also the specific new emerging market segments, which are relevant in India and relevant for our business in India, they find that focus. And this is done not only by us, but it is also participated by our global divisions. And they together with our local divisions, they are always focused on those opportunities, and we do have a pipeline. We will let you know soon we succeed either globally or locally with these opportunities we see in the marketplace.

Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question- and-answer session. I would now like to hand the conference over to Mr. T. K. Sridhar for closing comments.

Thank you very much. I think it was a very interesting discussion on QCO on the market dynamics and the opportunities as well as robotics piece of it. So, thank you for supporting us and also thank you for giving some valid inputs around our businesses and wish to talk to you next time after the full year results in the month of February and have a good closing. Thank you very much all of you.

Thank you. On behalf of ABB India Limited, that concludes th is conference. Thank you for joining us. You may now disconnect your lines. ----------------------- (This document has been edited for improving readability) ----------------------- Investor / Analyst contact: TK Sridhar Chief Financial Officer and Chief Investor Relations Officer sridhar.tk@in.abb.com Sohini Mookherjea Country Communication Manager sohini.mookherjea@in.abb.com

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