Kotak Securities is bullish on Cummins India has recommended buy rating on the stock with a target price of Rs 862 in its research report dated April 18, 2018.
Kotak Securities' research report on Cummins India
We expect Cummins India to be able to deliver growth at c.16.4% CAGR (against flat YY growth in FY18E) between FY18-20 given the continued momentum in industrial demand and potential benefits arising from improving economic outlook in exports market (business impact yet to be confirmed by the management). Continued efforts towards cost rationalization (maintain Gross margins through value engineering efforts) and operating leverage will be able to offset the cost inflation to a large extent.
Outlook
We believe that the downside could be limited from the current levels and Cummins India can surprise a rather skeptical market on the margin (and subsequently on earnings) front, making a plausible case for re-rating. We value Cummins India at 26x FY20 earnings and move recommendation to ‘BUY’ from ‘ACCUMULATE’ with revised target price of Rs 862 (Rs 897 earlier).For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.