| Company | Value | Change | %Change |
|---|
Nuvama has upgraded its rating on the stock to ‘buy’ from ‘reduce’ with a target price of ₹3,400 apiece, an 18.5% increase from its closing price of ₹2,869.65 on Friday, February 7.
It highlighted the stock has corrected over 40% from its peak of ₹4,171.90 apiece, the company delivered a strong operating margin and it witnessed an upbeat demand giving comfort with limited downside.
The brokerage said it is raising the FY25E-27E earnings per share (EPS) by 4% each, factoring in the 15% sales CAGR over the period and 19% operating profit margin (OPM). It added that it is also raising the target valuation to 40x to a target price of ₹3,400 for the next year.HSBC too has a ‘buy’ call on Cummins India. However, it has cut its target price on the stock to ₹3,500 from the previous target of ₹4,200 per share.
It said the company’s third quarter profit beat consensus estimates. Its topline growth across segments was impressive and was more than offset margin weakness. The brokerage said the company had a limited scope for margin expansion to drive moderation in growth prospects. It added that reset valuation multiples are to be factored in moderation in growth.
Cummins India reported a 13% increase in standalone net profit at ₹514 crore for the December quarter compared to ₹455 crore in the previous year. The CNBC-TV18 poll had predicted a profit of ₹485 crore for the quarter.Its standalone revenue increased 21.8% to ₹3,086 crore compared to ₹2,534 crore in the previous year. The Street had predicted a revenue of ₹2,787 crore.
Standalone EBITDA was up 11.5% to ₹600 crore in the third quarter of this fiscal over ₹538 crore in the year-ago period, again higher than the CNBC-TV18 poll forecast of ₹537.6 crore.
The EBITDA margin stood at 19.4% in the reporting quarter compared to 21.2% in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation. The CNBC-TV18 poll had predicted a margin of 19.3% for the quarter under review.
The company’s board of directors also approved and declared an interim dividend of ₹18 (900%) per equity share on 277,200,000 equity shares with face value ₹2 each for the financial year 2024-25. The board has fixed Friday, February 14, as the record date. The interim dividend will be paid by March 3.
Cummins India shares were trading 1.88% higher at ₹2,925.95 apiece at 9.30 am on Monday, February 10. The stock has fallen 2199% in the past year.
Also Read: Cipla unit gets a Voluntary Action Indicated status from the USFDA
First Published: Feb 10, 2025 8:41 am on IS
