No power project will be funded entirely by a multilateral funding agency and getting FIs to fund the project without an escrow account is not easy. In any case, it is too early to get excited about sanctions being lifted because even if the projects were to get off the ground tommorow, the benefit will bereflected in the books of an EPC contractor after a time lag which depends on the magnitude of the contract. For example, Korba is a coal-based project, which takes at least four years for execution. The maximum benefit will be reflected in ABB's books when the project is nearing completion.

Even the order inflow in 1998 was poor; at Rs 729.5 crore, 62 per cent below what it was in 1997 (order inflow in 1997 at Rs 1936.5 crore was highest for the last five years) and lowest in the last 5 years.

Though the performance in the first quarter of 1999 was better than in the corresponding period of the previous year, it could be a spillover effect. Despite poor inflow of orders in 1998, order backlog at the end of the year (Rs 1,899.2 crore) was just 8.5 per cent lower than the order backlog at the end of 1997 (Rs 2,076.2 crore). This indicates that at least the second quarter of the current year will be better than the second quarter of 1998.

According to the management, though the company has completednegotiations for a number of major power projects in the private sector, they have not been booked as orders mainly due to delays in financial closure. Since neither Daewoo Power nor Videocon ABB has achieved financial clsoure, it is logical to believe that share of ABB (India) in execution of project-mainly E&C-is not included in the order book.

It simply means that the quality of the order book is excellent. The order backlog will also get reflected in the performance in the current year. This is a good enough reason to drive the stock up. It has three things going for it; an excellent order book position, an MNC status and the fact that it is a cyclical stock.