Dalal Street gives thumbs down to Cummins India post Q1 results; stock tanks 5%

Shares of Cummins India dropped 5 percent in trade on August 4, post release of Q1 results. At 11:09 am, the Cummins India stock was trading 5.38 percent lower at Rs 1,777 on the NSE.

The diesel and natural gas engines manufacturer has recorded standalone profit at Rs 315.7 crore for quarter ended June FY24, climbing 58.8 percent over corresponding period last fiscal led by healthy top-line and operating numbers. Revenue from operations grew by 31 percent YoY to Rs 2,208.7 crore during the same period.

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Brokerage Views

Brokerage firm Incred reserach has given a ‘hold’ rating to the Cummins stock with a target price of Rs 1,740 in a report dated August 3. The brokerage house further stated that, “1QFY24 sales (+31 percent YoY, +15 percent QoQ) beat our estimates by 5 percent (2.4 percent above consensus). EBITDA (59 percent YoY, +4.5 percent QoQ) lower than our estimates by 2.3 percent and consensus by 11 percent.”

Brokerage house UBS has given a ‘sell’ call on Cummins India with a target price of Rs 1,250 per share in a post results report. The firm further stated that, “The Q1 margins missed despite pre-buy. Expectations for FY24 exports and margins ambitious. Cummins also witnessed a sharp 160 basis points QoQ decline in EBITDA margin.”

Stock Performance

Cummins India stock has given a return of 29.94 percent over the last six months. The stock has thus considerably outperformed the benchmark Nifty50 index. As the benchmark index has given a return of 9.15 percent over the same duration.

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