Buy Cummins India; target of Rs 4350: Motilal Oswal

Motilal Oswal's research report on Cummins India

Cummins India (KKC) reported a strong set of results with a beat on all parameters. Revenue growth was fueled by sharp growth in powergen and exports, followed by distribution. KKC seems to have gained market share during the quarter, with a sharp growth seen in the powergen segment revenues as compared to the nearest peer. We expect KKC to benefit from 1) demand improvement in the powergen segment as prices have largely stabilized, 2) customized product offerings in the industrial segment and improved penetration for the distribution segment, and 3) recovery in exports. We broadly maintain our estimates and roll forward our valuations to 41x Sep’27E earnings. We reiterate our BUY rating with a revised TP of INR4,350.

Outlook

The stock is currently trading at 45.6x/38.7x/33.3x on FY26/27/28E EPS. We reiterate our BUY rating on the stock with a revised TP of INR4,350 (based on 41x Sep’27E earnings).