ABB India Ltd (NSE: ABB) Q4 2025 Earnings Call dated Feb. 23, 2026
Corporate Participants:
TK Sridhar — Chief Financial Officer
Sanjeev Sharma — Managing Director
Sanjeev Arora — President, Motion Business
Kiran Dutt — President, Electrification
Ganesh Kothawade — President, Electrification Distribution Solutions
G Balaji — President, Energy Industries Division Process Automation
Analysts:
Renu Baid Pugalia — Analyst
Atul Tiwari — Analyst
Umesh Raut — Analyst
Mohit Kumar — Analyst
Amit Mahawar — Analyst
Sameer Thakur — Analyst
Subhadip Mitra — Analyst
Harshit Patel — Analyst
Mohit Pandey — Analyst
Parikshit Kandpal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to ABB India Limited’s Quarter Four October to December Quarter, CY 2025 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
And any unauthorized recording of this call is strictly prohibited. The recording will be made available on the company’s and SEBI’s websites subsequently. I now hand the conference over to Mr. T. K. Sridhar, Chief Financial Officer of ABB India Limited. Thank you, and over to you, sir.
TK Sridhar — Chief Financial Officer
Thank you, Michel, for organizing this. So very good morning to all of you. Welcome to the Q4 2025 investor call. And this also is the full year for ABB. So along with me on the call, I have Sanjeev Sharma, Managing Director of ABB India Limited. I have Kiran and Ganesh, who are from electrification division and also I have Sanjeev Arora leading the motion. And also we have this time Balaji for process automation. So I think not wasting a minute now, Sanjeev, over to you.
Sanjeev Sharma — Managing Director
Thank you, Sridhar. Good morning to all of you. Thanks for joining this call. We will give you some business highlights, followed by Sridhar supporting the financial highlights. What we — we have a slide before this.
So we’ll kind of highlight to you the — again, for the people who are joining us for the first time that ABB Group is a 140-year-old company, which has sustained itself over various industrial cycles. And the core reason for that is that it’s an innovative company, keeps on rediscovering itself based on how we add productivity and value to our customers. In India, ABB is present and manufacturing for over 75 years, and our expertise in the portfolio is on the electrification and automation.
These are the sweet spot in terms of how the world is developing and how India is developing in terms of electrifying everything and also automating everything. So that’s where our portfolio is positioned. We have a substantial footprint. We operate out of four manufacturing locations spread across the country. We have 28 sales offices to reach out with customers and even getting deeper penetration with 750 plus partners. We have 25 shop floors, which have distinct product manufacturing, and we are exporting to 30 countries from India.
Now when you look at the business highlights, CY 2025, it has been a very consistent growth as connected with our previous years. We had the highest-ever orders at about INR14,115 crores, which was 8% growth. But if you look into CAGR growth from ’21 onwards, it has been 16%. Our backlog is at the strongest at INR10,471 crores, which has grown by 12%. And if you look into CAGR for last five years is 21%. Our revenue grew by 8% to INR13,200 crores and CAGR of five years is 17%, and PBT at this– in 2025 was INR22,230 crores with a margin at 16.9%, and if you see our CAGR, it has been 39%, and profit-after-tax is INR1,669 crores.
If you look into the EPS, it grew by 33% CAGR over last five years and currently at INR78.78 and the final dividend declared and approved by Board is at INR29.59 per share. So return on capital employed is 21%, which is– which is something we feel good about in terms of how we manage our businesses, which are 18 businesses operating in 23 market segments. Next slide, please. If we focus on quarter-four CY 2025 financial performance, we had a growth of 52% order growth in this — in this particular quarter and 27% base business growth in this quarter.
So this is something we are very encouraged after a few quarters prior to it, which were not as strong because the market was taking a breathe over which after five years of strong growth. Now we have some good signs in last quarter and we’ll continue to see the market building up in the quarter we are presently and also going forward. But at the same time, when you join us quarter-to-quarter in 2026, you will be able to observe how the market and how it goes on top of it. Now if you really look at the innovation and investments we are doing, we are continuing to expand our portfolio in different business divisions.
We added a new line for energy-efficient drives, and also we had a launch of next-generation machinery drive. So when we do these kind of introductions in the market, one is we do localization, and also it opens up new market segment and also it gives much more deeper penetration into the existing customer base. So that’s where you can see our businesses continue to compound growth year-over-year. On sustainability side, we were very proud that in — ABB India is only the fourth company in India to receive AWS Gold Certification for water stewardship with stakeholders for Nelamangala facility.
So this shows that we are very conscious of our role in sustainability in practice. And as a management team, we do it because it’s the right thing to do in a country like India and also in the locations we are present. Our ESG initiatives are covering 51% of our supplier and we continue to receive different recognition, and our latest was from GRIHA for sustainability excellence and National Stock Exchange’s ESG Leader rating. Next slide, please. So strong order momentum across most segments was visible, namely the top of those charts were transport, building and infrastructure, discrete, process automation or rather process industries, renewables and data centers.
So with this, we have a order backlog of 10,471 and you can see that there is a market segment where we have momentum, these are the sweet-spot industries for the country and they have a long runway ahead of us in terms of the growth. And we– and I think our customers like our products, they like our technology and they also have good relation and deeper relationship with our– our businesses. And we are very confident we continue to grow as these market segments and country grows. Now if you see the kind of breadth of wins that we get in the market, it gives you the diversity of the customers and diversity of our portfolio, it plays out.
Like, for example, we gave rectified solutions for reliable, stable ultra-high DC power for a large infrastructure and manufacturing major. We supplied low-voltage switchgear for a data center major. So that’s because you know that in data center, most of the computing power has a lot of energy connected to it and our low-voltage switchgear and the medium-voltage switchgear behind it enables it, backed up by our UPS systems. And also on the utility side, when you have the air-conditioning and cooling been done, our motors and drives, they participate in a significant there.
And propulsion systems for Indian Railways, so that’s another area wherein Government of India has long plans, and we see a long runway for us there. And of course, electric powertrain solutions for metals and majors — metals major wherein we combine drives and motor capabilities to give a solution which is most optimum and helps in save a lot of energy for our customers. Same thing in the ethylene cracker in a petrochemical project, we had a local scope integration and also robotics for a newly formed automotive company of an established industrial major for an auto major.
So this is something with the established players as well as new players that we’re posing lot of confidence on us to supply them the robotic solutions. So one of the important recipe for us to grow is to have a continuous customer engagement with the existing customers and also undiscovered customer, undiscovered geographies, and that has been our drumbeat in last many years and that continues to expand us in multiple new market segments, deeper penetration in geographies, and also new applications, which were not available in the country, but now with the entrepreneurs bringing in lot of value-add into the country, we continue to grow the market.
And most of the customers should be aware of our products and solutions, but we make sure they are very comfortable with our offerings and they appreciate what we can do for them. Now, as we have been mentioning to you, next slide, please. These are the 23 diverse market segments. We indicate to you every time. Emerging industries, in our case, are renewables, electronics, data centers, infrastructure and transport and the core industries. And these are the places wherein lot of activity is taking place and we find that we have a very good suite of industries to play for our journey forward.
We are very long on India, and we stay very consistent with what we supply to these customers, whether a particular market segment is up or it is down for a period, our ability to serve them stays unchanged. So we serve the segments which are up or down. We don’t chase up segment and neglect. So that’s the reason we have a very consistent relationship as well as loyalty from our customers across these segments. Next one. The India-Europe Trade Agreement FTA has been signed. Of course, there are a lot of projections, what can happen and what will — it will mean.
It will take some maybe six months or so. I met some people over the weekend who were involved in these kind of agreements more mainly from EU side. So they are very upbeat about it, and they believe it will take another five, six months before this gets ratified, and then we will start seeing the benefits of it. These are some projected benefits, but I would say one should wait and watch. Whenever such FTAs happen, it has — it becomes a two-way street, and more confidence gets developed on the both sides and that is always a net positive for India.
In my opinion, I think it will be net positive for ABB India in terms of our ability to deploy more portfolio, serve industries better, and also integrate back our supply chains back into the EU, wherein we have a very large manufacturing and technology base. But let’s wait and see, it’s a positive impact that we should factor for future. And we have factored it for future. Next one, Indian Union budget ’26, ’27. I think we do believe there is a lot for emerging industries, which is our focus. There are lot for infrastructure and transport and there’s lot for core industries.
And this is something which will play out as we go forward. It may take — it doesn’t play out quarter-to-quarter, it plays out in-quarter one year, two years, three years. So that’s something we are very positive about because this is something which is forming the industry and the market in front of us. So we have good confidence to invest in our capacities as well as our capabilities to serve these markets that will expand in front of us. When it comes to sustainability in practice, we are very proud of the achievements our team has achieved across all our locations and our kind of a focus wherein you can see that the — we have reduced our GHG emission by 87%, zero waste to landfill, we — four units have achieved it, four locations. Water positive units, four locations have achieved it, and water recyclability is at 44%.
So ABB India is the fourth company in India, as I mentioned, which has received the AWS Gold Certification. And those of you who happen to visit us anytime, I think you’ll be able to experience this firststand what it means. This is not we do for PowerPoints, we do it because it’s the right thing to do and you can and our customers experience it when they come here. And most of our customers really value this because they themselves are trying to implement in their locations, and they have a very deep dialog with us apart from our products and solutions, how we can co-partner to make sure that these sustainability initiatives are not only in ABB, but they are also with the customers and also with our suppliers.
And we are also very proud that our products itself contribute when the client implements these products in their plants and machinery, it reduces the energy consumption, which has a direct and indirect impact on the GHG emission of our customers. So we are very quite happy about the overall focus we have in this area. Our CSR initiatives, they are across education and skilling, diversity and inclusion and communities and environment. We have very clearly defined impact zones where our presence is felt and our central team as well as our locational team in Nashik, Faridabad, Baroda, Nelamangala, in Peenya, they find projects nearby and also far from — far, far area to make a big impact in this.
We have been spending 100% of our CSR allocation in last 10 years, and we continue to make sure it works. And since our margins have expanded over a period of time, our CSR spend also has expanded over a period of time. Factors that we are watching out for 2026, I think there are more positives, which are domestically held. One is the economic power that we are unleashing at the India level. Green energy and sustainability is a very strong momentum in the country. Urbanization and smart infrastructure again has a good momentum.
Consumerism and lifestyle upgrade with the premiumization is something which is very visible. Even for our portfolio, we are not compared — our customers don’t compare us with the relatively lower brands and the cheaper products. They are always looking for us when they really want a reliable, available, serviceable solution. So that shows that there is a confidence in ABB products and offerings. And this is not only limited to Tier-1 cities; we see a very sustained demand in Tier-2 and Tier-3 cities wherein the aspirational entrepreneurs as well as aspirational class really demands best of the products.
Automation and AI, there again, a lot of work being done, and our customers can experience lot of services, which are based on AI and machine-learning solutions. We have a suite of products which are being used across the — mainly out of automation division. And the downside, which all of us know and I think nobody is spared across the globe is about the global uncertainty, which again, if you really look into the history of time, that never goes away. It keeps coming back one way or the other, and all what we had to do is to learn how to deal with it.
And being — having seen certain cycles in our lifetime, I think we are well-prepared to deal with the — we experienced what ForEx fluctuation, volatile, commodity fluctuation, some kind of cross-border topic, but we have seen those cycles, and we know how to adjust whenever that gets elevated. So with this, thanks — thank you for listening to me and I’ll hand it over to T.K. Sridhar to provide you more financial highlights, and later we’ll come back for questions. Thank you.
TK Sridhar — Chief Financial Officer
Thank you, Sanjeev. I think this summary was really important for us to understand how the markets are playing out and what are the factors which are going to drive and sort of what we need to watch out for. So on this, I think I go to the next slide, which is a summary for Q4 ’25, a strong quarter in terms of orders, base orders up 27 percentage and we also had the benefit of large orders, which was there and that’s why we should see 54 percentage. And these were these orders, which were something which — which were delayed in the last two quarters.
I remember the two-quarter call where we were mentioning that the decisions have been delayed, and it’s something which is not — which is not missed out, and this is something which is proving that. Order backlog, clear INR10,400 crores of order backlog, good visibility for the future revenues, and 70% — I mean, out of this 10,400, 30, 35 percentage is large orders, which get executed over a period of time, not in the next year itself. And then we have the base orders, which will form the rest of it, which will get executed over the next few quarters as we see.
Revenues, 6 percentage, INR3,557 crores. I think it was a good catch-up after we had an good festival period in-between in October and November. So I think we could still meet the 6% level as what we see. Profitability, EBITDA at 15.4% and PBT at 16.2%, and PAT at 12.2%, and we have a cash balance of INR5,694 crores. Profitability, I think we know that we are higher on the material cost at this point of time. We are at 61 percentage compared to 58 percentage levels of what we were earlier.
So I think broadly the reasons are, A, I think first of all, we are — we consciously took a decision in the beginning of this year to use imported material to address the QCO concerns and the total strategic decision. And that has proved to be beneficial for us, and that we could see that because of this reliability, we are also able to have a good pace of our growth because customers believe that we will be able to — we will stay resilient in these circumstances as well. And that’s something which has definitely a reason to push up the material cost. And also we have the forex in the copper and metal prices, which are going up at this point of time. And so that has probably led to the higher material cost and the mix of orders revenue — mix of orders between projects, products and services as well. So I think all this put together has basically caused this material cost to increase, and we should also understand that ’23 and ’24 were those periods where demand was higher than supplies because it’s an execution of the pent-up demand of the COVID period, and that gave us the leverage to have a price premiumization in the market, and that’s something which is now getting stabilized, and therefore, we have the scenario as what is playing on the material cost.
So while there is a good part of that, there has been no one-off cost in terms of any surprises on the material cost. This is something what we believe this should be the right level that’s what we see. Cash, of course, it is being pretty clear. The next is EBITDA margin, so we are at 15 percentage. So I think it will slowly move into the commentary on EBITDA margins going forward as well, and profit before tax is 16 percentage compared to the levels what we were last year to what we are today and of course, PAT and EPS, we alluded upon during Sanjeev’s discussion.
The next slide is around structural assets of P&L. So I definitely told about material costs. I will not repeat upon it. Now the personal expenses include a INR65 crore impact of labor code and that’s something which we thought should be taken in the other — not as an exceptional item, but as in part of the normal expenses because we believe that it’s a part of the normal revision of what happens to personal expenses, and we believe that it’s better to be conservative than taking items to show a better profitability per se.
So but otherwise, I think there are no other surprises. There has been — we of course, got an advantage because of the mark-to-market gain on account of commodity derivatives, which had to be done. And if you look exactly two quarters before, we were hit by the exchange rate at that point of time. But an overall basis for the year, I think we are quite normal in the area of INR23.7 crores gain, which is just 0.2% of the total profitability. Yeah. So just alluding to a bit of more on the product wise [Phonetic] details. Electrification, the front-runner on the growth, 43 percentage up compared to the previous year.
Of course, they had an good order from data center as well in this particular quarter, which helped us off the ladder. But of course, the other thing is the base orders stood up to gain that particular traction. Revenues 6 percentage growth, strong order backlog, INR3,300 crores roughly and a profitability of 21.4 and of course, it’s something which also had to do with the QCO in the profitability and the impact on the forex. Motion, mobility order from the transportation sector really helped over here again.
So — and while on motion, I would like to clarify that does not include the Titagarh order, which was announced in the month of February, and that is something which will form part of the Q1 2026 performance. So we are up 25 percentage on the orders, 7% on revenues and strong order backlog of 4,200, but they also have large orders of railways, which will get executed over a period of time. Their profitability constant at 16.5. Automation, they were a bit subdued in the last few quarters. In this quarter, those orders which were delayed as what Balaji was mentioning earlier as well, that opportunity pipeline is there, but what is happening is the decision on the orders sometimes get delayed and that’s something which got decided in this quarter and therefore, we could see a good growth of 34 percentage on the orders.
This has at least is a good backlog, which gets a capable of execution in the coming quarters. So strong margins, I would say, for PBIT at 14.7%, and that’s probably from because lifecycle [Phonetic] services is what we see. Robotics, I think they also grew definitely higher INR570 crores for the quarter and it also had in one-time large order from our automotive sector, and revenue slightly lesser 5 percentage, backlog, of course, very strong compared to what it was in the last period because of the large orders what they got and profitability definitely higher.
So last slide, I think this is something which we show constantly to understand how do we operate. So EL is almost 43 percentage of the total order book — total revenues. What we have, 35 percentage from motion, 18 and 5 percentage of PA and robotics to mention. Products, we are definitely high on the product. So we have 79 percentage this year is products business and that’s because probably process automation was slightly lower in revenues and that is the — that is one of the reasons for this. And so — and channels to markets, OEMs and EPCs definitely are the — end-users are definitely the four market channels we have. Channel to market, they are performing in line with what we export and the businesses which we are doing.
Geographically, 11% — 10% of exports because we see domestic growing faster and that’s — and also we had a bit of a global uncertainty topics to being with initially. And so — but still I think 10 percentage on a higher base of 2024 on exports, a 90 percentage domestic is definitely a stronger performance to say. Yeah. So yes, so this is basically the insights on how the financial insights. So I was able to cover in 10 minutes, per se. So I think we can start to take the questions, at least with 30 minutes for us to take questions. Thank you very much.
Questions and Answers:
Operator
Thank you very much, sir. Ladies and gentlemen, we will now begin with a question-and-answer session. [Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Renu Pugalia from IIFL Capital. Please go ahead.
Renu Baid Pugalia
Yeah, hi. Good morning, team and congratulations for the strong results. My first question is, Sanjeev, if you look at the order flows, excluding the automotive large order in ARO, your broad comments still have been fairly positive on the ordering environment as we look for CY ’26. Given that metro order also we’ve announced for Jan, how should we look at the order inflow momentum heading towards the next calendar year? And in general, what is — what are your views on the broad investment sentiment?
Have they improved? They’re still same, they’re expected to accelerate over the next year? That’s the first question. And second, our margins for last year were — for annualized basis were about at 16%, excluding the impact of the new labor code. And now that incrementally demand outlook and volumes are looking better, how should we look at the margin environment for the next 12, 15 months? Can we expect margins to improve? Have they bottomed out, or are they likely to be range-bound the way they have been for the last three to four quarters? Thanks.
Sanjeev Sharma
I can take the first part. Thank you, Renu. Thanks for the question. Second part, Sridhar, you can look into future and give an answer. So as far as demand outlook is concerned, it definitely looks positive, as confirmed by the business leaders who are running different businesses. So when we look into the aggregate demand outlook for ABB India, what it really means is how is the demand outlook for each of the 18 businesses? So we have the sum total aggregate — some total of all the businesses. So right now, we feel that there is a demand building up after a breather in early quarters of 2025.
At the same time, it is never a good idea to declare a victory or declare a trend with one quarter results. We shall continue to watch how the quarter one, quarter two, quarter three, quarter four builds. I think that will show very clear indications of how sustainable and how resilient the markets are. But as we look into our customer engagements and also the market segment engagement, it seems to be moving in the right direction in our view. Sridhar?
Renu Baid Pugalia
Which could be the key end-markets which are driving this?
Sanjeev Sharma
So if you go into our chart wherein you see you have a spread of emerging market infrastructure as well as the core industries. So emerging market segments are going really, very strong. And also the middle segment, which is infrastructure, where again we have good traction. And core industries, which were kind of, I would say, muted in past, but that forms about 52% of our volumes, we are seeing good green shoots and good signs there. There is a good mix of orders coming from the core industry, especially metals, as well as in the chemical oil and gas and other market segment in the core segment that we are seeing investment profile increasing in the core segment as well.
And that segment, though it is low-growth for last many quarters, given that it is 52% of our volume, if that moves, it moves us quite well. So it’s a combination effect of all the three core areas that we focus on, Renu.
Renu Baid Pugalia
Thank you. Yes, Sridhar.
TK Sridhar
Thank you, Sanjeev. So, Renu, to call on your question for the margin thing is that [Technical Issues]
Operator
Excuse me, sir. You are not audible right now. We can’t hear you.
Renu Baid Pugalia
Yeah, we lost you, Sridhar.
Operator
Please hold the line, ma’am. Management is reconnecting now. Sir, can you hear us?
TK Sridhar
Yeah, we could hear you, but in between we dropped.
Operator
Yes, sir.
TK Sridhar
I think we are just again reconnected.
Operator
Yes, sir, please proceed.
Renu Baid Pugalia
Sir, we couldn’t hear anything what you said, Sridhar. You may have to start again.
TK Sridhar
But I will do that, not a problem. We were talking about margins. I think the profitability and especially on PBT over the five-year period, we have a good traction of PBT at PBT level. So today in 2025, we closed it at 16.9 percentage, give-and-take another 0.5 percentage for the labor code impact. So literally we’re talking of 17.5%. Last year, we were 20.5%, no doubt about it. And I think that gap is more to be — attributable to the reasons which are not under the company’s control, which is of forex and commodity prices and also the increasing — stabilizing of price in the market as a way for the premium what we could normally get on account of demand-supply situation is something which could not be — which could — which was not possible in 2025 and also as we add QCO.
So now going forward, how does this basically pan out? I think I go back to the slide that Sanjeev said as to what is happening and what is going to be the play in the market. I think there are — there is a bit of an good view that the markets are going to revive, and with the private capex, which is expected to happen out in the Q4 to remain in 2026, and thanks to the budgets and also the — from the trade impacts, which are giving a bit of a positive sign at this point of time. So having said that, I think what will remain as and risk to manage is, of course, forex and metal prices, right?
And our ability to respond to the market with a balanced view between how much price increase to do and how much we should absorb depends on total market situation as such. So having said that, I think a trajectory in — at the PAT level, we’re talking of between 12 percentage to 15 percentage still feels good, right? And I think I believe that if we have volumes getting in more than what we are growing today at 6, 7 percentage, probably that should give us an extra mileage to manage and do a margin accretion.
Renu Baid Pugalia
Sure, and do you think there’ll be positive tail impact from rating change from motors from IE2 to IE3 standards towards the second-half of the year
Sanjeev Sharma
So Sanjeev Arora is with us. Sanjeev, did you get the question on the IE2 and IE3?
Sanjeev Arora
See, if I may get that right, then you can please correct me. I think you are talking about that if it moves from IE2 to IE3, the minimum efficiency levels for India, what would be the impact? Am I right? Did I get the question right?
Renu Baid Pugalia
Yes.
Sanjeev Arora
Okay. So I think — thank you, a very good question, and thanks for that. I think it is high time that we mature towards IE3 and IE4 efficiency levels. And if it happens, it’s a welcome move. Because now if we talk about India growing not only domestically, but also exports, all the majors what you talk internationally, they have — all the countries they have moved to IE4 as the minimum efficiency.
And if we have to grow on export part, per machinery has to have that kind of motors with that efficiency levels. So I think that’s one. Second part is that this will not only help in improving our exports but also the sustainability and the energy efficiency team, which is scope 4 to ABB’s, I would say — one of the pillars of operations. So with this, we can save lot of electrical energy, which can be utilized for further expansions, and I think there is a — there is a — and just to mention that more than 50% of our own production has already moved to IE3 and IE4 and we have been pioneering this efficiency team in India and also have brought IE5 technology, which is again induction technology free from permanent magnet, already introduced and customers are accepting them — accepting that with open arms. So that’s my take. I hope I’ve been able to give you the answer.
TK Sridhar
So, Renu, just to sort of round it up, right? So we are an INR13,000 crore company, out of which motors is one portion out of it. And out of that IE3 and IE5 is another fragment of it, right? The entire company is just not driven by motors, but it has 18 divisions, right, which contribute to the entire volumes of the company and therefore, it is then sort of a product of all these 18 divisions working together. Can we move to the next slide? Next question, please.
Renu Baid Pugalia
Sure, thank you.
TK Sridhar
Thank you, Renu.
Operator
Thank you. [Operator Instructions] We’ll take the next question from the line of Atul Tiwari from JPMorgan. Please go ahead.
Atul Tiwari
Yes, sir. Thanks a lot. Sir, would it be possible to throw some light on what proportion of your cost of goods is imports from EU as of now? And what is the weighted-average tariff that you pay on that?
TK Sridhar
So I think it’s a very operational question, right? So most of our imports are from EU because all our feeder factories are from EU, right? So I think that being the case, if we are 10% on exports in terms of revenues, we are almost 20% is on imports, right? So I think we are still exposed to imports and net importer as such. So I think that’s basically what it is.
Atul Tiwari
Okay. And sir, any color on weighted average tariff that you pay as of now?
TK Sridhar
I think that’s different on different products, depends upon the classification what we have, right? And I think this is something which is quite I would say sensitive information to disclose at this point in time.
Atul Tiwari
Okay, sir. And sir, QCO impact, has it continued in this quarter? Because I mean, based on the news flows we gather that government has kind of rolled back most of the QCO orders, or is that a wrong impression?
TK Sridhar
Okay. So let me give one answer, one bit of answer, other thing I will pass it on to Kiran to supplement that. See, we — in 2025, we took a strategic decision as what I mentioned to stock our material to cater to our customers with it from imports, right? And that imported material will get consumed over the next two quarters, right? So therefore, we will have a bit of a higher material cost, which we foreseen at this point of time. So now coming to the next part of the question, which is how is the QCO playing out?
Kiran, over to you.
Kiran Dutt
Thanks, Sridhar. Thanks, Atul, for this question because it’s a very important topic, and we have been discussing this particular topic for the past one year. And there is nothing called a rollback of a QCO. Just to make it quite understandable, it’s actually the timelines which have been enhanced for testing. So that’s the crux of the story, where the government has very clearly indicated that QCO for sure is going to be implemented, no doubt in that. The first phase is already in flow and most of the companies, even the peers and us, have already tested our products and solutions as per QCO norms, whatever is the policy and we have already got it done.
However, for the second phase of implementation, the government has given some more time due to the availability of labs, which are required, and that is where all of — all the manufacturers, including ABB, are following this particular process and following the policy of the government. So it’s only a question of timelines, it’s not the question of rollback.
Atul Tiwari
Okay, sir. Thank you.
Kiran Dutt
Thank you.
Operator
Thank you. Thank you, sir. [Operator Instructions] We’ll take the next question from the line of Umesh Raut from Nomura India. Please go ahead.
Umesh Raut
Yeah, hi, sir. Thank you so much for this opportunity. My first question is pertaining to…
Operator
Mr. Raut, I’m sorry to interrupt you, sir. Please use your handset.
Umesh Raut
Is it fine now?
Operator
Yes, sir. Please proceed.
Umesh Raut
Yeah. My first question pertaining to 23 diverse market slide that we mentioned, where if I look at the breakup now, on a quarter-on-quarter basis, certain industries have moved towards lower or modest mid-term outlook segment, especially larger sectors like auto and food and beverages. But I think despite that, we are mentioning our outlook as being more of optimistic in near term? And second, within these three segments, if you can help us with the contribution from emerging industries and infrastructure and transport. I think in opening comments you have mentioned core industries contributing about 52% to total volumes for the company.
TK Sridhar
I will give some light on the contribution. So I go back to what our composition is, 10 percentage is exports, 90% is domestic and this 90 percentage of our revenues come from all these 23 market segments. And out of this 90 percentage, I think 52% is what Sanjeev was mentioning is from the core sectors. And the balance, 25, 23 percentages between emerging sectors and the automotive and renewable sector. So that’s the — that’s a broad split. It is 23, 25 and that’s how it is.
Sanjeev Sharma
So just to let you know, I think your analysis is right, but the life is not as linear as we mentioned. What happens is when these segments, which are so-called emerging, they become a larger size, rate of growth, the percentage rate of growth normalizes, they move there, but at the same time, the size of the industry has become larger. And also with our strategy and our portfolio expansion, we go for higher penetration. We also go for more customer coverage. So then what happens is that also correlates to the net growth rather than a linear — linearity with the way the segment is moving down.
Umesh Raut
Just a follow-up on this, if you can…
Operator
Sorry, sir. Mr. Raut, I would request you to kindly rejoin the queue for follow-ups, please. We have others who are waiting for their turn. I’m sorry, sir.
Umesh Raut
Okay, okay, sure.
Operator
Thank you. We’ll take the next question from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Mohit Kumar
Yeah, good morning, sir, and thanks for the opportunity. My question is, can you help us understand the order prospect for the data centers? Are you seeing larger prospects compared to, let’s says at the beginning of CY ’25?
Sanjeev Sharma
We have Ganesh Kothawade, our ELDS leader, as well as Kiran on the call. So I’ll hand it over to Ganesh. How do you see our data center market building up going forward?
Ganesh Kothawade
Yeah. Thanks for this question. Myself, Ganesh Kothawade, I’m responsible for distribution solution business of ABB India. And as a — it’s a very emerging segment to the electrical industry and really see a very strong fund which is coming from the data center. And there are not only the hyperscales who are putting up the data centers, but there are a lot of big Indian houses. They also have a very big plan to put up the data centers in India. And apart from the big hyperscale data center, there are many data centers, which we see in the pipeline, which is coming from the colos also.
So in and overall, we are very optimistic and see a very, very strong demand and the inquiry pipeline, which is coming from the data centers.
Sanjeev Sharma
Thank you, Ganesh. And Ganesh supplies directly into data center or to the people who are building those data centers. And Kiran’s portfolio that also has a good exposure to data center, but that’s typically dealt by our integrators and channel partners. How is that building it up for Kiran for the products and the solutions our panel builders trends through?
Kiran Dutt
Thank you, Sanjeev. Very important question, Mohit, and very — very interesting and emerging market as well at this point of time for us. You have seen the AI Summit happening and you know that the data center is going to pick up because of this AI Summit as well. A lot of limelight and a lot of interest being shown by the consumer as well. So when it comes to the system-integrated part or even for the — for example, for even the direct supplies, I think both hyperscale and co-locations are seeing a very big trend in terms of the capacities being utilized at this point of time.
At the same time, new capacity is coming out. And we are seeing megawatt capacities now and going towards gigawatt capacities as well in the future. So it’s quite a very interesting topic at this point of time and the system integrators are really leveraging this — the opportunities what are available in the market. And we believe that this is a great opportunity for all of us to get into it and give right solutions. And you also saw in the opening comment made by Sanjeev that we have also secured a very large low-voltage switchgear order for one of the largest of the data centers in India.
Sanjeev Sharma
So the way to see ABB portfolio is that when we say we are focused on hyperscale and the mid-scale data centers, that is our direct supplies into them. And what Kiran deals with is the all data centers because they are connected to where our panel builder and our channel partners work. So basically, we can now cater to the complete bandwidth of the data centers, wherein in the low-end of the data centers, we have more low-voltage solutions and some medium-voltage solutions going, but in the midsize as well as hyperscale, we have the portfolio that flows into it.
And of course, not to mention the UPS, which is a very kind of a — a product which is very much liked by the data centers because it’s a fault-tolerant UPS wherein it can be kind of serviced online while it is working with 100-kilowatt modules. So there are very good design advantages our portfolio has when we deal with the data center segment entry in the different market segments within datacenter. Yeah.
Mohit Kumar
Thanks.
Ganesh Kothawade
And Sanjeev, I would just like to add one more point.
Sanjeev Sharma
Yes, Ganesh, please go ahead.
Ganesh Kothawade
Yeah. But first, in the recent budget, this tax holidays up to 2047 is also going to make India market very attractive to put up the data center for those companies.
Mohit Kumar
Understood, sir.
Sanjeev Arora
Absolutely, Ganesh. Thanks for pointing that out as well. Thank you.
Operator
Thank you. Thank you, sir. We’ll take the next question from the line of Amit Mahawar from UBS Securities. Please go ahead.
Amit Mahawar
Hey, Sanjeev, hi. Sir, I just have one question on the pace of ordering, both base and large. We concluded CY ’25 with a reasonable growth of 13% in base orders. We hardly had large orders until the last part of December. Do you think 2026 as a year — is a year where you will have not only data centers, I can see 15 billion, 16 billion the order book now from data centers, that’s a large number for you. But also from metals, we have two, three other segments where the large order cannot perform significantly in the ’26 period.
And also in base orders, it’s been two years that the channel partners have been very, very conservative, which cyclically looks better now that for exporters in India, the trade — the tariff barrier concern is behind, the budget was supportive, private segment for all the companies that report numbers has been going up. Do you think ’26 is a year of very significant shift in the ordering run-rate, the last we saw was three, four years ago? So any comments on both base and large orders with some colors? Thank you.
Sanjeev Sharma
So this large orders typically come from our process automation division and also some of the ETO orders in ELDS, robotics and many others. So let me give this opportunity to Balaji. Balaji, how do you see the process automation or automation market at this point in time, and how do you see the project pipeline developing in the energy and the process industry side?
G Balaji
Yeah. Thank you, Sanjeev. From context of 2025, yes, I’ve stated that the markets are quite muted until the first half of the year and then we started some movements and that resulted in order conversions as well. 2026, I would say that the momentum is there. There are definitely movements. I think from an especially to say in energy industries that deals with oil and gas, power, specialty chemicals and pharmaceuticals, we see some very good opportunities in power, especially power generation, which has been quite low for past few years.
We have a good pipeline of opportunities in power generation. Refining is still strong, and there are good opportunities in refining. So in both these cases, we have greenfield opportunities, which means these are new projects starting up from ground. We also have a good amount of opportunities in the repair and modernization, which is an ongoing activity, so that should cover the — from the repair and modernization and the large orders coming in from all opportunities available in the greenfield. Similarly, in the process industries that deals with metal mineral mining, these heavy industries, what we also see is there are quite a good of opportunities for the — for the big-ticket items and we shall continue to stay close to the customer and see how much we can convert during this year.
But overall, I would say a positive outlook as things stands today.
Sanjeev Sharma
Thank you, Balaji.
Amit Mahawar
Thank you. Thank you.
Sanjeev Sharma
Thank you. We can take next…
Operator
Yes, sir. The next question is from the line of Sameer Thakur from Ambit Capital. Please go ahead.
Sameer Thakur
Hi, thanks. Just to follow up on data center. What is the data center exposure in the sales and backlog. Have you seen any acceleration in interactions in data center market? A bit color on that would be great.
TK Sridhar
So data centers, actually you get some large orders, it becomes large in the pipeline. But in the 2025, we got a few compared to the previous years. I think in the backlog, which we have of INR10,441 crores, I think roughly 10, 11 percentage would be data center orders.
Sameer Thakur
Yeah, thanks. And just squeeze in one more. Just what’s happening in the price for different divisions?
TK Sridhar
We need — what’s happening for the…
Sameer Thakur
I mean, see prices in different divisions. Just can comment on the pricing.
Sanjeev Sharma
Well, customers always demand lower prices, that’s the reality of life. And what we do is we continue to localize, make sure our portfolio is at the right cost level and meet the customers’ requests. But at the same time, premiumization of the portfolio is taking place. So we have a good overall effect. So it’s always a balancing act. And on the pricing side, the — but for one or two particular products, we don’t see as such any critical pressures at this point in time.
Sameer Thakur
Okay, thank you. That was all for me.
Sanjeev Sharma
Yes, continue.
Operator
Thank you. The next question is from the line of Subhadip Mitra from Nuvama. Please go ahead.
Subhadip Mitra
Good morning, and thank you for the opportunity. So this is just a clarification on, I think, one of the early answers that you gave, I think to Renu’s questions. I believe you mentioned 12% to 15% as the sustainable growth number? I’m not sure whether you mentioned that as a sustainable margin or the sustainable top-line growth number? And also on this QCO impact, once the imported stock of materials is done, where do you see the sustainable margins stabilizing?Thanks.
TK Sridhar
So let me answer one question. When I talked about 12 to 15 percentage, I told about the PAT margin. So that’s where I said that that’s something which should be the corridor in which we should move and knowing well that we have Q3 issues, which will have to be handled for the next two quarters as what we see because that’s the material what we have had. And also the orders what we will execute in the next three to four quarters, that’s what we see, right? And that’s what it is. Now coming to the growth of revenues, right?
So the growth of revenues at this point of time, if you look at our overall revenues, I think we have been growing at ASB two [Phonetic] at 8 percentage at this point of time. So I think if you look at it, I was mentioning that the INR10,000 crore order backlog definitely has 30%, 35% of large orders, which has got executed over the next couple of years to come. And that being the case, so then we’ll really book orders in the market during 2026 for revenues in 2026, right? So that remains the — our ability to book big orders and execute them.
So I think we will have to make sure that we are able to — our target is always to have double-digit growth on the revenues as well. So let’s see how it proceeds, how the markets proceeds, how these orders get finalized.
Subhadip Mitra
Thank you.
Operator
Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Harshit Patel
Thank you very much for the opportunity. Sir, my question is on the process automation order. This segment has not kept pace with the other two large segments since the last two to three years and you have also highlighted the delayed decision-making by the customers and we have seen that correcting in the last quarter as well. So while the orders in the 4Q were strong, our order book is almost at the same level, which was there in 2022. So do you think we would have lost some market share in this two to three years or we have performed in line with the capex environment in this industry and it was just a factor of the delayed decision-making, just your thinking and the outlook on the system?
Sanjeev Sharma
So we have performed in line with how the segment is developing. And what we find is that there are opportunities in the marketplace. We are very selective what kind of projects we do. We always go after high-quality and somewhere where the value added buyers is appreciated by the customers because we have lot of domain expertise and specialization in the automation area. So if you really go back, I don’t know how long you’ve been following this particular market segment, it’s a cyclic area. And you — if you go back 20 years, you will find that there is a lot of cycles that come and go.
And typically, if you have a cycle which is a down-cycle, what we do is we continue to maintain the quality of our support to customers, so which shows up in the opex orders as well as capex orders and also the brownfield expansions. So we stay engaged with the customers because we are the long-term partners for them. But yes, last quarter, we did see expansion, and as Balaji mentioned that we are seeing now the pipeline building up nicely and we hope that we can get a fair share of that in the coming quarters.
Harshit Patel
Understood, sir. Thank you and all the best.
Sanjeev Sharma
Thank you.
Operator
Thank you. The next question is from the line of Mohit Pandey from Citigroup. Please go ahead.
Mohit Pandey
Yeah, good morning, sir, and congrats on a good quarter. Sir, just wanted to get more color on competitive intensity in the market. Last two quarters, you have — you indicated Chinese competition as well and we understand some of your European competitors are setting up incremental capacities in India. So in light of that, just wanted to hear your thoughts around these.
Sanjeev Sharma
So we — on the competitive intensity, I think at this point of time is largely domestic of the established players. Now as far as the Chinese players are concerned, I think last quarter what we talked about was if the — if the industrial goods imports are open, we’ll have to wait and watch and see what impact that can come. We haven’t seen any direct impact yet, but we do see in certain large projects wherein one or two customers when they’re executing large projects, they may prefer equipment out of China.
I think we have seen that in past, but that was almost, in my memory, nine months to one year ago, but it’s not a kind of a very repetitive phenomenon as yet in the marketplace. As far as the European competitors are concerned, I think most of the known European competitors we have, they are already present in the market, but then of course, you’ll have relative — as the market expands, you will also continue to see the expansion of the competitors. But you can see that we are a global company, we face all these competitors in different markets at the global or regional or the domestic level.
We know how to kind of respond to such competitors and our focus to say number one or number two in the areas we operate stage four — stays there and we continue to do what it takes to manage the competitive intensity. So I think going forward, the — I think if the market landscape changes, we continue to adapt accordingly, but we haven’t seen anything new other than the existing competitive intensity offered by the established players.
Mohit Pandey
Understood, sir. Thank you so much, and wish you all the best.
Operator
Thank you.
TK Sridhar
Let’s move to the next, last one probably.
Operator
Sure, sir. Thank you. Ladies and gentlemen, this will be the last question for today, which comes from the line of Parikshit Kandpal from HDFC Securities. Please go ahead.
Parikshit Kandpal
Hi, sir. Congratulations on a great quarter. My first question is on the data center portfolio. So if you can help us understand versus the parent, so what parent is servicing globally, so what percentage of that we’ll be servicing from India? And we also understand that parent has developed some very power-efficient solutions like FSTs and solid-state drives and transformers or is developing the solution. So when do we expect that kind of product to come into India? Because when these hyperscalers come into India in a big phase, so it will mirror the global data center supply chain, so which may benefit us.
So I just want to understand that the contribution, how much can it go from here on?
Sanjeev Sharma
Thanks for this question. You’re right, our global…
Operator
I’m sorry to interrupt you, sir; you’re not audible right now.
Parikshit Kandpal
Sir. We cannot hear you.
Sanjeev Sharma
All right. I think there was a bit of a break. So let’s start again.
Operator
Yes, please continue.
Sanjeev Sharma
Our global — global management has highlighted the importance of data center for ABB, given our strong footprint of electrification. And you know data center is nothing but computing the power you require, that’s a core. And then in order to support that computing power, you need to have lot of power infrastructure that supports that computing power. So we come into play on the supplying the power at the low voltage level and the medium voltage level to the data centers and also the utilities which do the cooling of the data centers, which consume high-efficient motors as well as drives to support that particular part of utility.
So that’s what our footprint is. And here, hyperscalers especially they are experimenting a lot and researching a lot together with us in terms of how to make sure not only create higher availability and reliability of the data centers as the size and that intensity of the power increases, but also how that can be optimized. So within that optimum scenario, a lot of new technologies are developed and being experimented. And as far as India is concerned, whenever any customer demands as per their design criteria, any of ABB technology is seamlessly available.
It is not a question of whether we have to get that technology in India, it automatically and seamlessly flows to us. It basically depends upon how the demand is forming and what the customer aspirations are in the — during the design phase. And we keep introducing those ideas to the domestic data center players and some of them — and most of them are listening to it very carefully. And hopefully that should become part of their design criteria in future.
Parikshit Kandpal
Sure, sir. Thank you.
TK Sridhar
Thank you.
Operator
Thank you. Thank you, sir. As that was the last question for today, I would now like to hand the conference over to Mr. T. K. Sridhar for closing comments. Thank you, and over to you, sir.
TK Sridhar
Thank you, Michel, for moderating the call and all the people on the call, thank you very much for the interest which you have shown and always your support and clarifications help us to go a long way in giving more data and more relevant data so that your decisions are better off, and thanks to management who was there part of this particular call and aspirations there too. Thank you very much. We’ll meet again in the next quarter call.
Operator
[Operator Closing Remarks]