Cummins India Ltd. share price target

Cummins India (KKC) reported strong revenue at INR17.4b in 3QFY22 (twoyear CAGR: +9%), 15% ahead of our expectation, led by a strong beat across the domestic segment. The gross margin contracted 240bp YoY. The EBITDA margin also expanded 60bp QoQ, while it declined 140bp YoY to 15.6% (v/s the estimate of 15.2%). Other income came in at INR866m v/s our...

strong growth in both domestic (up 23% YoY) as well as exports market (up 18% YoY). We believe uncertainty in supply chain, semiconductor and electronic part shortage may impact the company's performance in near term....

Draft Bill aimed at lowering pollution via other generation sources: In light of rising pollution levels, particularly in metros and large cities, the Draft Bill states that the electricity distributor shall ensure uninterrupted (24*7) power supply to all consumers so there is no requirement of running dieselgenerating (DG) sets. The State Commission may consider a separate reliability charge for the distribution company, if it requires funds for investment in infrastructure, to ensure the reliability of electricity supply to consumers. Urges consumer to shift to cleaner energy sources: The Draft Bill further states consumers using DG sets as essential backup power shall endeavor to shift to...

Cummins India (KKC)'s 1QFY21 revenue came in at INR11.8b (2-yr CAGR: 6%) and was 12% ahead of our expectation. Adj. PAT came in at INR1.3b and was 8% ahead of our expectations. The demand outlook is strong, driven by a) the unlocking of the domestic economy and likely pent-up demand playing out for a few months, b) road...

Company has taken price hike across various categories in order to mitigate impact of commodity price hike and maintain GP margins levels (36% range). Cummins India (KKC) reported healthy set of quarterly performance led by strong recovery in economic activity and exports market. In domestic market, Powergen and industrial witnessed strong demand revival as economic activity picked up. Exports market reported 21% QoQ revenue growth, mainly led by strong growth in China and North America, while other geographies...

Cummins India (KKC)'s 4QFY21 revenue growth was weak, in line with expectations. It increased 18% YoY on a weak base (4QFY20: -22%). Domestic revenue was up ~26% YoY, while exports remained sluggish (flat YoY). However, persistent cost-cutting measures (employee cost down 5% YoY and other expenses down 30% YoY) resulted in EBITDA margins of 13.4%. Adj. PAT stood 53% higher YoY and was 19% above our estimate, led by higher-than-estimated other income. Revenue normalization is taking longer than expected (in line with our...

Management stands optimistic about revival in export markets demand from H2FY22 basis recovery seen in China, North America and European region. Cummins India (KKC) reported strong performance in Q4, led by sequential recovery in economic activity. Revenue grew 18% YoY on account of robust growth in domestic market (up 26% YoY) led by continued traction witnessed in power generation, construction, mining and mineral segment. EBITDA margin expanded 710bps on account of strong revenue growth and better...

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...