Accumulate Cummins India target of Rs 4138 Prabhudas Lilladher

Prabhudas Lilladher recommended Accumulate rating on Cummins India with a target price of Rs 4138 in its research report dated November 08, 2024.

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November 11, 2024 / 13:38 IST

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Cummins India

Cummins India (KKC) reported strong quarterly performance with revenue growing 31.2% YoY driven by broad-based growth across segments, while EBITDA margin grew by 148bps YoY to 19.3%. The transition to CPCB IV+ emission standards presents a strong growth opportunity for the Powergen business, where KKC has a competitive advantage and benefits from an efficient supply chain. This transition is likely to prompt a 3–4 month period of price discovery in the market, during which KKC will maintain stable pricing for its Powergen products. The Industrial business is also set for robust growth, supported by government-driven infrastructure projects and PLI-linked capital expenditures. Additionally, KKC’s strategic focus on expanding its footprint is expected to drive growth in its Distribution business. On the export front, demand from Latin America and Europe shows improvement, while the Middle East and Africa remain subdued amid geopolitical uncertainties.

Outlook

We expect Cummins’ outlook to remain intact given 1) strong domestic demand in pPowergen across sectors with CPCB IV+ products witnessing traction, 2) improving margin profile and 3) ample room for growth in the Distribution business. The stock is trading at a P/E of 56.2x/48.7x FY25/26E. We roll forward to Sep-26E and maintain ‘Accumulate’ rating with a revised TP of Rs4,138 (Rs4,081 earlier) valuing the stock at a P/E of 50x Sep-26E (53x FY26E earlier).

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