Result Update: Cummins India Ltd - ACCUMULATE - TP Rs.1018 - Kotak

- Cummins India reported Q2FY18 result below our estimates. Domestic business suffered from lower offtake driven by GST transition in the quarter. However, management believes that the situation has already started to improve and company would make up for the lost sales in 9MFY18. Operating margins contracted YY driven by lower volumes, however company maintained gross margin driven by various cost efficiency measures undertaken.

- Management maintained FY18 growth guidance at 5-10% YY in domestic business, however reduced guidance to 5-10% YY decline (from 0-5% decline) in the international business. We view current weakness as a short term phenomenon; maintain our estimates and 'ACCUMULATE' rating with unchanged target price of Rs 1018 (ascribe PER of 30x FY19 earnings) on company's stock.

Shares of CUMMINS INDIA LTD. was last trading in BSE at Rs.906.25 as compared to the previous close of Rs. 908.35. The total number of shares traded during the day was 8037 in over 523 trades.

The stock hit an intraday high of Rs. 910.2 and intraday low of 898.75. The net turnover during the day was Rs. 7271264.

Source : Equity Bulls

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