Prabhudas Lilladher is bullish on Cummins India has recommended buy rating on the stock with a target price of Rs 836 in its research report dated August 13, 2018.
Prabhudas Lilladher's research report on Cummins India
Cummins' (KKC's) Q1FY19 PAT was up 10.2%YoY at Rs1.83bn which was in line with our estimates. Domestic sales were down 7% YoY due to the high base of last years and supply constraints with few vendors. However, KKC expects to recover lost sales during the year. Exports sales were up 12% YoY led by a strong bounce back in LHP sales (up 26% YoY). Better mix led margin beat.
Outlook
We remain positive on KKC, given its strong domestic outlook, likely gradual revival of export markets and a strong history of delivering on cost rationalization and healthy cash flows. While we have increased our margin assumption, increase in tax rate has led to earning a cut of ~3% for FY19/20. We maintain "BUY" with a revised TP of Rs836.
Prabhudas Lilladher's research report on Cummins India
Cummins' (KKC's) Q1FY19 PAT was up 10.2%YoY at Rs1.83bn which was in line with our estimates. Domestic sales were down 7% YoY due to the high base of last years and supply constraints with few vendors. However, KKC expects to recover lost sales during the year. Exports sales were up 12% YoY led by a strong bounce back in LHP sales (up 26% YoY). Better mix led margin beat.
Outlook
We remain positive on KKC, given its strong domestic outlook, likely gradual revival of export markets and a strong history of delivering on cost rationalization and healthy cash flows. While we have increased our margin assumption, increase in tax rate has led to earning a cut of ~3% for FY19/20. We maintain "BUY" with a revised TP of Rs836.
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