Buy Cummins India; target of Rs 4950: Motilal Oswal

Motilal Oswal's research report on Cummins India

Cummins India (KKC) once again reported a strong set of results with a beat on all parameters. Revenue growth was led by sharp growth in powergen and healthy growth in distribution and exports. The industrial segment was impacted by slow construction activity. KKC has grown its CPCB 4+-related portfolio by 20% YoY, which indicates a healthy YoY volume improvement. We expect KKC to continue to benefit from 1) demand improvement in the powergen segment as industry volumes have now improved back to pre-emission levels, 2) a fairly strong outlook for data centers, 3) improved penetration for the distribution segment, and 4) a gradual recovery in exports. KKC stands far ahead of the competition in terms of overall product offering and distribution reach. We tweak our estimates and roll forward our valuations to 42x Mar’28E earnings. We reiterate our BUY rating with a revised TP of INR4,950.

Outlook

The stock is currently trading at 49.0x/43.6x/37.4x on FY26/27/28E EPS. We reiterate BUY on the stock with a revised TP of INR4,950 based on 42x Mar’28E earnings.