Buy Cummins India; target of Rs 1550: Sharekhan

Sharekhan's research report on Cummins India

Cummins reported strong standalone revenues with ~13%/15% y-o-y revenue/PAT growth driven by both domestic and export markets with a strong beat on OPM estimate. The demand outlook is robust in domestic market from data centers, mining, healthcare, realty and infrastructure. Further, products catering to CPCB-4 norms would drive future growth. Exports growth would be driven by market share increase through new product offerings. Cummins has a strong pedigree, healthy balance sheet, constantly evolving product portfolio to meet the changing emission norms and improving earnings trajectory. We expect revenue/PAT CAGR of ~18%/19% over FY22-25E.

Outlook

We reiterate Buy on Cummins India (Cummins) with a revised PT of Rs. 1,550 given its strong performance during H1FY23 and optimistic management commentary.

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