Cummins India Ltd - A buy for Target of 3929

$CUMMINSIND Investment Rationale: Ÿ The company is one of the leading power solutions providers in the country. Cummins India is a leading manufacturer of diesel and natural gas engines. The company is engaged in the business of manufacturing, trading, and selling engines and allied activities. It has a strong manufacturing backbone and has five state-of-the-art manufacturing plants, assembly, and distribution facilities. With over 480 customer touchpoints. Ÿ• It has expanded its footprint across key industrial segments. In railways, it supplied complete DETC propulsion packages, CPCB IV+ diesel alternator sets, and Hotel Load Converters. For marine, it delivered a 1.5 MW genset for INS Vikramaditya and 2.3 MW propulsion engines to L&T. In defence, demand surged for >400HP engines for missile carriers and artillery guns, with a proto engine delivered for the Zorawar light tank. In construction, QSB4.5 and QSB6.7 engines were certified for CEV BS V. Distribution saw robust sales of DF Kits, RECDs, DEF IBCs, and new brake linings, clutches, and fuel quality kits. Ÿ• It has sustained strategic capital investments, emphasizing capacity expansion, emission-compliant products, and infrastructure upgrades. It allocated ₹150–300 crore for new product development, engineering capabilities, and facility improvements. A long-term investment of ₹2,000 crore over five years was committed to expanding capacity near Pune. These efforts focus on developing CPCB IV+ emission-compliant products, aligning with evolving regulatory standards and rising market demand, thereby reinforcing the company’s commitment to sustainable and future-ready growth. Thus, it is expected that the stock may see a price target of Rs.3929 in 8 to 10 months’ time frame on an expected P/BVx of 13x and FY26 BVPS of Rs.302.25E.