The 15 reports from 7 analysts offering long term price targets
for Cummins India Ltd. have an average target of 537.00. The consensus estimate
represents a downside of -39.93%
from the last price of 893.95.
Maintain BUY with increased TP of Rs 810 vs Rs 724 earlier (SOTP). Cummins Indias (CIL) 3QFY21 strong financial performance is underpinned by positive commentary on (1) calibrated demand normalisation, (2) likely stabilisation of exports market, barring COVID-19 waves, (3) pick-up on power gen viz. data centres, etc., (4) being open to various long term corporate action pertaining to CITL + CIL, and (5) new technology like Hydrogen being routed via the listed entity. We believe this will support long-term valuation rerating. Management clarified that the new hydrogen technology will be rolled out in the medium term via CIL in product/market segments, where it has good scale. We roll forward to FY23E and revise FY21E/22E/23E EPS upwards by 8.2%/12.8%/11.8%, given strong margin recovery
Cummins India (KKC)'s revenue growth was weak, in line with expectations. It declined 2% YoY on a weak base (3QFY20: -3%) and could have been even weaker if not for a large order in the Powergen segment. However, persistent cost-cutting measures (employee cost and other expenses) led to...
Cost rationalisation in addition to domestic recovery drives decent performance during Q2FY21 Cummins India Ltd (CIL) topline was at `11.6bn (-11% YoY;+133% QoQ).EBIDTA of `1.9bn +25% YoY was despite YoY revenue decline, was supported by better revenue mix of high margin Export + distribution business contributing 63% of sales compared to 52% in Q2FY20, which itself led to gross margin expansion of 3.1 bps YoY to 38.1% and cost rationalization measures lead to another 170bps YoY improvement in margins. EBIDTA margins for the quarter stood at 16.4% (+4.8 bps YoY)....
While Cummins (KKC) reported in-line revenue, EBITDA came in 25% higher than our estimates. This was largely owing to favorable mix (higher contribution of distribution segment and export revenue), continued cost rationalization measures, and cut in employee wages. Further, cost reduction was aided by the reduction in warranty and royalty expenses. As sales normalize and lower margin domestic product sales pick up, gross margin is likely to reverse to historical levels. Also, KKC had reduced employee wages by 10-20% during the lockdown owing to decline in...
led by faster recovery in distribution, construction and mining segments. Going ahead, KKC expects demand to improve across various segment in domestic market. Within exports market early signs of demand recovery in few export markets (~Asia Pacific, Europe & Latin America) were visible leading to better exports. As second wave of Covid seems to be started and lockdown is already announced in some regions, the market conditions continue to remain uncertain in the export market. In short term we are cautious on account of impact of second Covid wave and...
We recommend Buy on Cummins India (Cummins) with a PT of Rs606, given high net earnings growth trajectory over FY2021E-FY2023E and discounted valuations. The company reported strong outperformance on OPM led by favorable mix , cost reduction measures and pricing impact. Export revenues rise 18% y-o-y while domestic revenues declined 22% y-o-y. Company is witnessing m-o-m and q-o-q recoveries pretty much in every segment....
We recommend Buy on Cummins India (Cummins) with a PT of Rs606, given high net earnings growth trajectory over FY2021E-FY2023E and discounted valuations. The company reported strong outperformance on OPM led by favorable mix , cost reduction measures and pricing impact. Export revenues rise 18% y-o-y while domestic revenues declined 22% y-o-y. Company is witnessing m-o-m and q-o-q recoveries pretty much in every segment....
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...
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...
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,...
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...
