Cummins falls 1%; Nomura says reduce on expensive valuation

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Shares of Cummins India fell over 1 percent intraday on Wednesday. Nomura maintains reduce rating on expensive valuations  with an unchanged target of Rs 1064 per share.

Earlier, Anant J Talaulicar, CMD of the company said, "Our Power Generation business grew 23 percent  over the previous quarter as we improved our market share.”  However, Nomura says that the recent surge in revenue growth in Cummins India’s power generation segment is not sustainable beyond FY16.  Cummins India’s power generation revenues in Q1FY16 benefitted from an uptick in demand in the real estate segment.

The brokerage explains that interaction with competitor Kirloskar Oil Engines (KOEL) gave a negative impression on the power generation business.  “KOEL sounded very negative on the growth outlook for the key powergen and industrial segment. Demand in the powergen market excluding telecoms has declined 17 percent annually in 1QFY16. Competitive intensity has increased as marginal players have resorted to price cuts in the LHP and MHP segments,” it says in a note.

The diesel engine maker posted a marginal decline of 0.59 percent in its standalone net profit to Rs 210.73 crore for the first quarter ended June 30, 2015-16. However, Cummins' total income from operation was up 25.75 percent to Rs 1,314.31 crore during the quarter.

At 09:41 hrs Cummins India was quoting at Rs 1,151.25, down Rs 11.85, or 1.02 percent on the BSE.

Posted by Nasrin SultanaFollow @NasrinzStory