Feb'25 View on Cummins India Ltd

Cummins India Ltd is a part of the Cummins Inc. Group USA. It designs, manufactures, distributes and services diesel and alternative fuel engines from 2.8 to 100 liters, diesel and alternative-fueled power generator sets of up to 3000 kW (3750 kVA), as well as related components and technology. Since July'24 when it touched 4150, the stock is in consolidation mode and now taking support at 2800 but now looks like will reverse the tide to reach back above 4,000 levels on back of following positive update. • Strong 22%/12% yoy growth in revenue/EBITDA over a very high yoy base of margin. • Domestic revenues grew 19% yoy, driven by very strong growth in powergen (18%) and industrial segments (25%). • Cummins has been able to maintain its pricing qoq in the key powergen market. • Cummins’ sharp revenue beat reaffirms the health of end markets, strong execution capabilities and competitive positioning. • CPCB IV being more of a medium-term opportunity versus a near-term threat. • Cummins benefitted on accounts of higher localization & meaningful financial leverage. • We believe that Cummins would be less hit on bottom-line profitability.