The 10 reports from 6 analysts offering long term price targets
for Cummins India Ltd. have an average target of 429.80. The consensus estimate
represents a downside of -3.03%
from the last price of 443.25.
Q1FY21 Performance Sales came in at `4,982mn which was impacted as two months of revenue loss due to closure of factories on account of pandemic. EBITDA declined by 98% YoY to `29mn with EBITDA margin coming at 0.6% compared to 11.3% in Q1FY20. EBITDA was profitable at `876mn due to lower employee cost (-16% YoY,-18% QoQ) and decline in other expenses (-47.8% YoY,-45.7% QoQ). PAT came in at `526mn on account of higher other income which grew 32.9% YoY and 13.8% QoQ to `1,022mn led by tax reversal of `0.3bn and rental income. Post the gradual...
Management remains cautious on demand recovery in both Domestic and Exports market and expects current economic scenario to persist in short run. Cummins India (KKC) reported a decent performance for 1Q amidst the pandemic with cost control measures and higher other income boosting profitability. Execution was weak on account of severe impact of Covid-19 pandemic as factory sites were in containment zone. Domestic/exports revenues decline 64%/61% YoY for the quarter. Within the domestic market,...
Commercial/ Residential real estate activities expected to remain sluggish & will take longer time to recover, while data centers&healthcarewouldlikelytosupportpowergenbiz.Rail &Mining(55%ofindustrialsales)toleadindustrialbizrecovery innext23quarters.Significantdemanduncertaintiespersistin...
technology access may not be as big a barrier to competitors (KOEL, Mahindra, and Perkins), end markets may not be strong enough to absorb such steep price hikes (similar learning from the earlier transition from CPCB-I to CPCB-II), the implementation date is set as July 2021, which may be pushed by six to nine months, especially given the COVID- 19-led disruption. However, the key end markets Manufacturing, Real Estate, Retail, and Hospitality are likely to remain under pressure, with a sluggish growth outlook over the next two years. Even the transition to CPCB-II met with a similar fate, with an anticipation of pre-buying, followed by price hikes, and hope of earnings growth. Given the weak outlook for the end markets and limited pricing power in the Gensets industry, we refrain from being bullish on CPCB-IV opportunities. Currently, macro headwinds remain too strong for the industry to witness double-digit growth on a sustainable basis in the domestic market.
We recently attended a concall hosted by Mr. Ashwath Ram- MD Cummins Change in Estimates | Target | Reco (KKC) India addressing concerns on Covid-19. Management remains very cautious on recoveries due to economic slowdown. While domestic markets...
Looking at slow recovery cycle, with bleak near-term outlook: The already weak business outlook has worsened, due to the COVID-19 situation impacting the entire global supply chain. Management expects the situation to worsen before there is any improvement in sight. The pace and timing of recovery depends on the likely government stimulus in India and individual overseas markets. On the optimistic side, domestic demand is expected to take six to nine months to recover. Domestic business outlook: Distribution, Industrial, and Powergen: a)...
29 January 2020 Cummins 3QFY20 revenue declined 3% YoY to INR14.5b (in-line). EBITDA declined 5% YoY to INR2.2b and was 12% ahead of our est. Adj. PAT was 10% ahead of our est. up 5.6% YoY to INR2.0b. Cummins has maintained its bleak revenue growth guidance for the domestic/export market. On margins, it has admitted that 3QFY20 run-rate may not sustain only on cost cutting measures, as it is dependent on exports. Distribution revenue (29% of sales) grew 18% YoY to INR4.2b, helped by one large order worth INR700m from the bus segment. Excluding this, distribution revenue would have declined 2.3% YoY, leading to overall domestic revenue decline of 3% (v/s 4% reported growth).
Cummins India continued to report weak set of numbers with revenue Change in Estimates | Target | Reco declined by 12% YoY at Rs13.1 bn (PLe Rs14.9 bn) during 2QFY20. This was mainly due to de-growth in both domestic (-6%YoY) and exports (-25%YoY)....
Cummins India Ltd's (CIL's) annual analyst meet indicated of sustained Change in Estimates | Target | Reco demand for diesel for the next few decades. It re-emphasized on its earlier guidance of single digit domestic growth and weak exports in FY20. From...
Cummins Q1 earnings came in below our estimates primarily on account of lower exports impacting operating margin by 1.5 percent and Fx impacting 1percentof operating margin.
Op. performance below expectations: KKC missed our expectations on all fronts. Revenue growth was tepid at 1% YoY (our estimate: 10%) in 1QFY20 due to a decline in exports (-26% YoY). De-growth in the higher-margin export business dragged the overall margin to its lowest level in a decade at 11.3%. Thus, EBITDA declined 30% YoY to INR1.5b (35% miss). Adj. PAT was down 23% YoY to INR1.4b (25% miss). The root cause weak demand trends in overseas markets: The decline in exports is attributable to weak demand in the key markets of Africa, the...
CIL has provided a FY20 guidance of 10-15% YoY for its domestic operations, while its guidance for the export market is weak. Weak global cues may continue to put pressure on the overall earnings of the company. Therefore, we revise our rating to Hold and value CIL at...
Cummins Delivers Q4 in line with Expectation; Adverse Product Mix Dent Margins: Cummins India (Cummins) earnings for Q4 came in line with our expectation at Rs. 5.08. Domestic revenue grew by 22% to Rs. 9.9 Bn and export revenue dropped by 17% to Rs. 3.2 Bn which dented gross margins by 70 bps YoY in Q4.
impacted by lower gross margin (-70bp YoY; 34.2%) and higher employee expenses (10% v/s 9.6% in 4QFY18). Adj. PAT declined 13% YoY to INR1.4b (our est. INR1.7b), impacted by lower-than-estimated other income of INR692m (our est. INR814m) and higher-than-estimated tax rate of 32.4% (our est. 29.5%). For FY19, Sales/EBIDTA/PAT increased 11%/24%/2% YoY. Domestic business shines; but exports decline sharply: Domestic business grew a robust 22% YoY to INR13.3b, on strong growth in Power Generation (+21% YoY) and Industrial (+37% YoY) segments. Demand from Data center,...
Cummins India's (KKC) Q4FY19 results came in below our and Street expectations. Domestic sales rose 22% yoy, mostly due to a 17% yoy decline in exports. The exports decline further impacted margins and also led to a higher tax rate. KKC has guided for strong domestic growth of 10-15% in FY20 with upside risks, while exports outlook remains challenging with flat to negative growth. Our feedback from OEM...
Change in product mix impacts margin: Q4FY19 sales were up 9% YoY at Rs13.4 bn (PLe Rs14 bn). Domestic sales in Q4FY19 was up 22% YoY at Rs9.9 bn. However, exports fell by 17% YoY at Rs3.2 bn. EBITDA margin contracted 120bps YoY to 12.8% due to 70bps YoY dip in gross margin. This was due to change in product mix with higher share of lower range engines. Hence EBITDA was flat YoY at Rs1.7 bn. Finance cost was up 32% YoY at Rs 45mn. Tax rate for the quarter was higher at 32.4% compared to 22.8% in Q4FY18. Hence PAT for the quarter came to Rs1.4 bn, down 13% YoY. FY19 sales were up 11% YoY at Rs56.6...
Q3FY19 revenue grew by 11%YoY led by 14% growth in domestic sales while exports grew by 4.7%YoY. 9MFY19 revenue growth was at 12%YoY. Despite ~200bps decline in Gross margins, EBITDA margins improved by ~50bps due to control on other expenses (-6%YoY). The full impact of the price hike taken by the company is expected from Q4FY19E onwards which will add to the revenue growth. Revenue growth guidance have been revised upward to 13-15% from 1012% for domestic while exports to 4-5% from 3-5% for FY19E. Revenue/PAT is expected to grow at 12% and 8% CAGR over FY18-21E...
Key point to note Cummins India has not hiked prices for the last four years. While it is the market leader in HHP (~60% share) and MHP segment (~50% share), Cummins is focusing on gaining greater market share in few selective nodes in the 750kv and above segment a key focus area for the company. It has also developed new growth areas in the domestic market; a segment like Railways now contributes INR2.5b to sales. Cummins also expects manufacturing to start contributing to revenue. guidance for FY20, Cummins India expects 10-12% growth in the Domestic market backed by strong growth across infrastructure segments like Data Centers, Hospitality and Metro. Demand for Powergen segment products (major part of its exports business) has witnessed a decline. Even key markets like the Middle East (slowdown in investment) and Africa (payment concerns), which contributes 50% to LHP exports have not picked up.
