Cummins India Ltd. share price target

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 Q2 sales, EBITDA and PAT declined by 12 percent, 39 percent and 29 percent The Q2 weakness was witnessed across business segments.

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.