CUMMINSIND - Investment Analysis

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

Investment Rating: 4.3

⚙️ Fundamental Analysis: Cummins India Ltd. (CUMMINSIND)

Cummins India is a leading manufacturer of diesel and gas engines, with strong exposure to industrial, power generation, and export markets. Its fundamentals are robust, and it offers a compelling long-term investment case despite a slightly premium valuation.

Metric Value Implication

Market Cap ₹97,958 Cr Large-cap; industry leader with global pedigree

Stock P/E 49.1 Slightly expensive vs. industry PE of 41.8

PEG Ratio 1.41 Reasonable valuation for growth; acceptable

ROCE / ROE 36.3% / 28.2% Excellent capital efficiency; strong long-term compounding potential

Dividend Yield 1.46% Decent; adds income stability

Debt-to-Equity 0.00 Debt-free; pristine balance sheet

EPS ₹72.2 Strong earnings base

Qtr Profit Var -1.74% Slight dip; not alarming

FII/DII Holding Change +0.29% / -0.31% Neutral institutional sentiment

📉 Technical Analysis

Current Price: ₹3,535

DMA 50 / DMA 200: ₹3,367 / ₹3,196 → Trading above both; bullish trend

RSI: 57.5 → Neutral to slightly bullish

MACD: +63.5 → Bullish momentum

Volume: Above average; healthy interest

💰 Ideal Entry Price Zone

₹3,300–₹3,450

This range offers a good balance between valuation and trend support

Avoid chasing above ₹3,600 unless earnings growth accelerates

📈 Long-Term Investment Outlook

Strengths

Elite ROCE and ROE — ideal for long-term compounding

Debt-free — strong financial resilience

PEG < 1.5 — valuation is fair for quality

Strong EPS and consistent profitability

Risks

P/E > 49 — priced slightly above sector average

Minor profit dip — needs monitoring

DII trimming — may reflect valuation caution

Cummins India is a high-quality industrial compounder, well-suited for long-term portfolios focused on capital appreciation and dividend stability.

🏁 Exit Strategy / Holding Period

If you already hold CUMMINSIND

Holding Period: 5+ years for compounding and sector tailwinds

Exit Strategy

Consider trimming near ₹3,900–₹4,000 (recent high) if valuation stretches

Hold as long as ROCE stays above 30% and PEG remains < 2

Reassess only if earnings stagnate or competitive pressures rise

Would you like a comparison with other industrial leaders like ABB India or Siemens to explore sector diversification?

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