Cummins India Ltd. share price target

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...

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 recommend a BUY on Cummins India Limited with a Target Price of Rs 470, an upside of ~9% from CMP of Rs. 432 and Stop Loss Rs 410.

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.