Cummins India Ltd. share price target

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 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...

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...

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....

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....

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,...