CUMMINSIND - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

🔧 Fundamental Analysis: Cummins India Ltd (CUMMINSIND) Fundamental Rating: 4.4

📊 Core Financial Metrics

Profitability

EPS: ₹72.2 ➜ strong earnings delivery

PAT slipped slightly by 1.74% QoQ ➜ still healthy

Return Ratios

ROE: 28.2%, ROCE: 36.3% ➜ exceptional capital efficiency

Leverage & Yield

Debt-to-equity: 0.00 ➜ debt-free — pristine balance sheet

Dividend Yield: 1.46% ➜ moderate income stream

🧾 Verdict: Robust operations, high returns, and conservative financial structure mark Cummins India as fundamentally sound.

🧮 Valuation Metrics

Metric Value Commentary

P/E Ratio 49.1 premium over industry avg (41.8)

P/B Ratio ~12.95 (₹3,535 / ₹273) ➜ high asset premium

PEG Ratio 1.41 slightly expensive but justified by quality

📉 Note: Price reflects market confidence in sustainability and global presence. Not extremely undervalued, but premium may be warranted.

⚙️ Business Model & Competitive Edge

Segments: Diesel and gas engines, power generation, filtration, electrification

Strengths

Global parentage ensures tech infusion and scale

Dominance in industrial engines and genset markets

Local manufacturing aligned with “Make in India” push

🔧 Moats

Long-standing OEM relationships

Wide service and spares network

Strong brand reputation in mission-critical products

📈 Ownership & Market Sentiment

FII Holding ↑ 0.29% ➜ gradual foreign accumulation

DII Holding ↓ 0.31% ➜ possible sector rotation or profit-taking

📉 Technical Overview

RSI: 57.5 ➜ neutral-to-slightly overbought

MACD: +63.5 ➜ positive price momentum

Trading above DMA 50 & DMA 200 ➜ strong intermediate trend

✅ Suggested Entry Zone: ₹3,350–₹3,450 📌 Ideal on slight dip or consolidation — quality stock but avoid chasing highs

🧭 Long-Term Holding Thesis

🌍 Beneficiary of infrastructure growth, energy security mandates, and industrial capex cycle

🔋 Transition tailwinds from electrification and emissions compliance

🛠️ Consistent performer with scope for global supply chain integration

⚠️ Watch future quarters for margin stability and order book expansion. Long-term outlook solid, with moderate price sensitivity.

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