⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
CUMMINSIND - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.4
| Stock Code | CUMMINSIND | Market Cap | 1,11,524 Cr. | Current Price | 4,021 ₹ | High / Low | 4,615 ₹ |
| Stock P/E | 50.0 | Book Value | 265 ₹ | Dividend Yield | 1.28 % | ROCE | 37.6 % |
| ROE | 28.8 % | Face Value | 2.00 ₹ | DMA 50 | 4,192 ₹ | DMA 200 | 3,894 ₹ |
| Chg in FII Hold | 1.07 % | Chg in DII Hold | -1.13 % | PAT Qtr | 638 Cr. | PAT Prev Qtr | 555 Cr. |
| RSI | 42.1 | MACD | -81.9 | Volume | 3,78,643 | Avg Vol 1Wk | 5,58,113 |
| Low price | 2,580 ₹ | High price | 4,615 ₹ | PEG Ratio | 1.42 | Debt to equity | 0.00 |
| 52w Index | 70.8 % | Qtr Profit Var | 41.5 % | EPS | 81.6 ₹ | Industry PE | 36.0 |
📊 Core Financials
- Revenue & Profit Growth: Quarterly PAT increased from 555 Cr. to 638 Cr. (+41.5%), showing strong earnings momentum.
- Profit Margins: ROE at 28.8% and ROCE at 37.6% reflect excellent efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.00 highlights a debt-free balance sheet.
- Cash Flows: Dividend yield of 1.28% provides moderate shareholder returns while retaining growth capital.
💹 Valuation Indicators
- P/E Ratio: 50.0 vs Industry PE of 36.0, indicating premium valuation.
- P/B Ratio: Current Price 4,021 ₹ / Book Value 265 ₹ ≈ 15.2, showing high valuation multiples.
- PEG Ratio: 1.42, suggesting growth is reasonably priced compared to earnings expansion.
- Intrinsic Value: Estimated fair value around 3,600–3,800 ₹, making current price slightly overvalued.
🏢 Business Model & Competitive Advantage
- Cummins India is a leader in power solutions, engines, and industrial equipment.
- Competitive advantage lies in global brand strength, technology leadership, and diversified industrial applications.
- Debt-free operations and strong profitability provide resilience and long-term sustainability.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between 3,600–3,800 ₹, closer to intrinsic value and near support levels.
- Long-Term Holding: Strong fundamentals, debt-free balance sheet, and high ROE/ROCE make it suitable for long-term compounding, though valuation is stretched.
✅ Positive
- Debt-free structure ensures financial stability.
- High ROE (28.8%) and ROCE (37.6%) reflect strong efficiency.
- Quarterly PAT growth of 41.5% shows robust earnings momentum.
⚠️ Limitation
- P/E ratio above industry average, suggesting premium valuation.
- P/B ratio of 15.2 indicates expensive pricing relative to book value.
- Technical indicators (RSI 42.1, MACD -81.9) show weak near-term momentum.
📉 Company Negative News
- DII holdings declined (-1.13%), showing reduced domestic institutional support.
- Stock trading below DMA 50, reflecting short-term weakness.
📈 Company Positive News
- FII holdings increased (+1.07%), showing foreign investor confidence.
- Strong quarterly PAT growth reinforces operational strength.
🏭 Industry
- Industrial equipment industry PE at 36.0, lower than Cummins’ 50.0, suggesting relative overvaluation.
- Industry growth supported by infrastructure expansion and demand for power solutions.
🔎 Conclusion
- Cummins India is a fundamentally strong company with debt-free operations and excellent return ratios.
- Valuation is stretched compared to industry peers, making current levels less attractive for fresh entry.
- Best suited for long-term investors with cautious entry around 3,600–3,800 ₹; accumulation strategy recommended for exposure to industrial growth.
I can also highlight infrastructure-driven demand cycles that could boost Cummins India’s earnings trajectory if you’d like.