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ABB Ltd. to Build India's Longest Power Transmission Link

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ABB Ltd. , in collaboration with India’s national electricity grid operator, Power Grid Corporation of India Limited (POWERGRID), will deliver a transmission link, big enough to meet electricity needs of over 80 million people in India. The order, booked in fourth-quarter 2016, is expected to be complete by 2019.

The $640-million project strengthens ABB’s HVDC track record in India, where it had introduced the technology almost two decades ago. The Raigarh-Pugalur project is ABB’s sixth HVDC project in India and the second UHVDC installation. Previously, this Zürich, Switzerland-based company had also won the multi-terminal North-East Agra link, which is currently in its final phase of completion.

The Raigarh-Pugalur 800 kilovolt (kV) ultra-high-voltage direct current (“UHVDC”) system is a 1,830 kilometer (km) link and will link Raigarh in Chhattisgarh to Pugalur in Tamil Nadu. It will have a capacity of 6,000 megawatts and can integrate thermal and wind energy for transmission of power. Per the latest deal, ABB will supervise the design, engineering, supply, installation and commissioning for this project. It will also supply major equipment, including transformers, converter valves, cooling systems and so on.

Net worth of the project is $840 million and the remainder of the work will be executed by one of India’s largest public sector company and ABB’s consortium partner – BHEL (Bharat Heavy Electricals Limited). ABB firmly believes that it will be able to execute this project smoothly, based on its extensive local manufacturing and engineering base in India.

ABB’s UHDVC technology helps balancing of renewable and conventional electricity supply in a reliable fashion. The company’s “Next Level” strategy focuses on integrating renewable sources with traditional grids for reliable and efficient transmission of power.

We believe ABB is one of the best managed industrial infrastructure, power and automation companies in the world. The company’s shares recorded an average return of 13.2% over the past six months, outpacing the Zacks categorized Machinery-Electrical industry average of 6.3%.

Moving ahead, the company anticipates gaining from high investments in ultra high voltage DC power transmission projects, in mature and emerging markets, as well as continuing investments in the maintenance of aging electric infrastructures. Over the long haul, this Zacks Rank #2 (Buy) company foresees bright prospects for all the three major markets, namely utilities, industry, and transport & infrastructure.

Key Picks

Other similarly-ranked stocks include KBR, Inc. (KBR - Free Report) , A. O. Smith Corporation (AOS - Free Report) and Donaldson Company, Inc. (DCI - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

KBR has an average positive earnings surprise of 3.9%, for the trailing four quarters, beating estimates twice.

With four repeated earnings beats over the trailing four quarters, A. O. Smith has an average positive surprise of 5.9%.

Donaldson Company, Inc. has managed to beat earnings estimates twice over the trailing four quarters.

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