Prabhudas Lilladher's research report on Cummins India
Cummins India (KKC) reported healthy quarterly performance led by sharp recovery in economic activities across some key segments. Revenue declined by 3% YoY largely in-line with our estimates. EBITDA margins came in at ~17% (highest ever) driven by execution of high margin one-off order and better cost rationalization measures. For domestic market, management indicated several businesses such as construction, mining, power generation and industrial who witnessed faster recovery leading to revenues reaching 97% pre-covid levels. Going ahead, KKC expects demand to improve across various segment in domestic market. Export markets are seeing some signs of revival from Asia- Pacific and African regions while Europe Latin America seems to be affected from second wave of Covid.
Outlook
Due to recent sharp run-up in the stock price we have reduced our rating from Accumulate to HOLD. We rolled over to FY23 estimate revising our TP to Rs546 (Rs472 earlier).
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