Cummins India Ltd. share price target

9 For FY17, management nowexpectsdomestic revenues to grow by1012% vs. earlier guidance of 812%; sees growth in the domestic business driven by the industrial segment,notsomuchbythepowergensegment. Maintained its guidance for exports at flat yoy with a negative bias despite strong sequential improvement (+28% qoq), which it attributed to lumpy demand from the parent(maynotsustainfortherestoftheyear). ManagementwillaimtomaintainFY17EBITDAmarginsatFY16levelsof16.4%. 8 ClarifiedthatCumminsInc(parent)willmanufacturetheQSK19rangeofenginesina...

Operating performance disappointing: Cummins India's (KKC) 1QFY17 revenue declined 4% YoY to INR12.6b (below our estimate of INR13.6b). EBITDA declined 7% YoY to INR2.1b (lower than our estimate of INR2.2b). EBITDA margin shrank 50bp YoY to 16.4% (in line with our estimate of 16.5%). PAT declined 14% YoY to INR1.8b (below our estimate of INR2.2b). Net profit miss was also on account of lower dividend income from its JV, Valvoline Cummins (INR140m v/s INR190m in 1QFY16). Revenue de-growth led by sharp decline in export revenue: KKC's revenue...

Cummins India (Cummins) revenue, EBITDA and PAT reach to Rs.12,284Mn, Rs.1,758Mn and Rs.1,812Mn respectively which are lower by 3.9%, 7.4% and 14.3% respectively on a YoY basis while sequentially, the same grew by 18.8%, 17.2% and 8.5% respectively by Q1FY17.

Cummins Indias (CIL) 3QFY16 result, adjusting for Rs 160mn one-time inventory provision, was in line with estimates. Reported EBITDA margins were 14.9%, but after adjusting for the one-off, it stood at 16.3%. Domestic sales pushed up revenue growth ( 15% YoY), while exports were dragged down by weak global macros (8% YoY decline).

Key highlights: Sales growth at 6% yoy was driven by strong performance in power generation(+23%yoy)anddistributionandspares(+9%yoy).Exportweaknessoffsetstrong domesticperformance.Grossmargins(adjustedforRs160mnpertainingtoexcessinventory...

engines for Automotive, Industrial and Powergen applications. The JV has a capacity of 0.12mn each in Jamshedpur and Phaltan. The plant makes the B series engines (4.9 litres and6.9litres)andhasTataMotorsasitslargestclient.ItalsosuppliesenginestoCummins...

The management highlighted that structural levers for exports out of India remain intact. Firstly,CumminsInc'sglobalmarketshareinthelowkvarangeis<10%ascomparedtoits market share in the mid and High ranges of 3050%. As the parent looks to increase its...

8 Cummins earnings (Rs 1.9bn; 2% yoy) were in line with our estimates, as weak operationalresults(7%belowourestimates)wereoffsetbyhigherotherincome. 8 Revenues and EBITDA were 6% and 7% below our estimates respectively as export...

Cummins India's Q1FY16 PAT at Rs 2.1bn was above our estimates led by strong performance in domestic power generation and exports. Management indicated that improvement in the domestic industrials market (mining, rail, marine) was driven by...