The IIFL Securities Report: Buy Cummins India - May 13

IIFL Securities recommends buying Cummins India shares, with a target price of Rs 3560. The current market price is Rs 3469.8, suggesting a potential upside of 2.61%. The company's strong fundamentals, including a robust balance sheet, leadership in power generation, and focus on operational efficiency, support this optimistic outlook. Investors may consider adding Cummins India to their portfolio for potential capital appreciation.

About Cummins India:

Cummins India Limited, a subsidiary of Cummins Inc., is a leading manufacturer and provider of diesel and gas engines, generators, and power generation systems in India. The company offers a wide range of products and services, including power generation systems for commercial, industrial, and residential use; power generation equipment for marine, rail, and defense applications; and engines for automotive, agriculture, and construction applications. Cummins India has a strong presence in India, with manufacturing facilities in Pune, Phaltan, and Chennai. The company also has a distribution network of over 300 dealers and service centers across the country.

52 Week Price Trend:

Cummins India's current market price (CMP) of Rs 3469.8 reflects a significant appreciation compared to its 52-week low of Rs 1481, indicating a bullish trend. Over the past year, the stock has witnessed a steady rise, with a 52-week high of Rs 2828.35. This notable increase suggests strong investor confidence in the company's growth prospects and its position in the power generation and distribution industry.

Stratzy's MOST Analysis:

Cummins India (CUMMINSIND) has received an AAA rating from Stratzy's MOST Framework, indicating a low fundamental risk. This rating is based on the company's strong management team, positive business outlook, robust safety measures, and favorable market trend. The AAA rating suggests that CUMMINSIND has a solid foundation and is well-positioned for long-term success.

Company's Fundamentals:

Cummins India (NSE: CUMMINSIND), a leading provider of power generation solutions, currently trades at a Stock PE of 53.4. This indicates that investors are willing to pay 53.4 times the company's annual earnings per share for its stock. The Price-to-Book (PB) Ratio of 13.41 suggests that the company's market value is 13.41 times its book value, indicating a premium valuation compared to its assets. Despite its relatively high valuation, Cummins India offers a modest Dividend Yield of 0.91%, implying that investors will receive a dividend of 0.91% of the share's current price if they hold it for a year.

Fundamental and Technical information provided in this blog were last updated on 11 May, 2024

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