Cummins India share price fell nearly 2 percent intraday on January 30 after research house Nomura downgraded the stock to reduce from neutral and cut target to Rs 570 from Rs 585 per share.
According to Nomura, the weak infra/mining order book and the poor export outlook are likely to drag H1FY21. However, the lack of near-term catalysts skew risk-reward unfavourably.
Citi has maintained a neutral rating on the stock but raised the target to Rs 642 from Rs 594 per share.
We will wait for more clarity on demand outlook to become more constructive, said Citi.
It increased EPS estimates by 13.5%/5.6%/0.5% for FY20/FY21/ FY22 as the market share remains healthy, while cost savings to be reflected in FY21.
On the export front, it would be a couple of quarters before demand improves, Citi feels.
The company's Q3FY20 net profit was up 1.2 percent at Rs 199.9 crore versus Rs 197.5 crore in the year-ago period.
Revenue of the company was down 3.8 percent at Rs 1,456 crore versus Rs 1,514.3 crore, YoY.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was down 5.3 percent at Rs 216.1 crore versus Rs 228.1 crore, while margin was down at 14.8 percent versus 15.1 percent, YoY.At 09:57 hrs, Cummins India was quoting at Rs 591.50, down Rs 8.95, or 1.49 percent on the BSE.