Sharekhan's research report on Cummins India
Domestic sales are recovering as visible in macro indicators, signaling a strong pick-up in business activities; exports would benefit from improved demand from data centres, 5G rollout and the China+1 strategy. Company is well-placed to take advantage given that it is technologically prepared and has market leadership position; CPCB-IV norms can lead to further market share gains. Led by AatmaNirbhar Bharat, localized procurement and a faster pick-up in manufacturing activity, the entire sector is getting rerated which augurs well for Cummins, which trades at a discount to its peak 5-year average multiple.
Outlook
We retain a Buy on Cummins India Limited (Cummins) with a revised PT of Rs. 1,030, considering strong earnings growth potential, led by a domestic economic revival.
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