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Cummins India

BSE:500480
Snowflake Description

Excellent balance sheet established dividend payer.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
500480
BSE
₹209B
Market Cap
  1. Home
  2. IN
  3. Capital Goods
Company description

Cummins India Limited designs, manufactures, distributes, and services engines and related technologies in India. The last earnings update was 300 days ago. More info.


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500480 Share Price and Events
7 Day Returns
1%
BSE:500480
-1.1%
IN Machinery
0.3%
IN Market
1 Year Returns
0.5%
BSE:500480
-12.3%
IN Machinery
2.4%
IN Market
500480 Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Cummins India (500480) 1% 12.4% -10.2% 0.5% -15.2% 32.9%
IN Machinery -1.1% 9.4% -2.6% -12.3% 25.6% 139.3%
IN Market 0.3% 8% 1.6% 2.4% 44% 81.3%
1 Year Return vs Industry and Market
  • 500480 outperformed the Machinery industry which returned -12.3% over the past year.
  • 500480 underperformed the Market in India which returned 2.4% over the past year.
Price Volatility
500480
Industry
5yr Volatility vs Market

Value

 Is Cummins India undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Cummins India to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Cummins India.

BSE:500480 Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 23 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 16.5%
Perpetual Growth Rate 10-Year IN Government Bond Rate 7.6%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for BSE:500480
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year IN Govt Bond Rate 7.6%
Equity Risk Premium S&P Global 8.6%
Machinery Unlevered Beta Simply Wall St/ S&P Global 1.06
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.06 (1 + (1- 35%) (1.23%))
1.046
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.05
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 7.55% + (1.046 * 8.6%)
16.54%

Discounted Cash Flow Calculation for BSE:500480 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Cummins India is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

BSE:500480 DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (INR, Millions) Source Present Value
Discounted (@ 16.54%)
2019 3,738.18 Analyst x11 3,207.56
2020 5,918.11 Analyst x9 4,357.26
2021 6,214.33 Analyst x9 3,925.90
2022 6,567.65 Est @ 5.69% 3,560.16
2023 6,977.79 Est @ 6.24% 3,245.58
2024 7,440.86 Est @ 6.64% 2,969.70
2025 7,955.06 Est @ 6.91% 2,724.26
2026 8,520.05 Est @ 7.1% 2,503.58
2027 9,136.61 Est @ 7.24% 2,303.67
2028 9,806.39 Est @ 7.33% 2,121.58
Present value of next 10 years cash flows ₹30,919.25
BSE:500480 DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= ₹9,806.39 × (1 + 7.55%) ÷ (16.54% – 7.55%)
₹117,281.55
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= ₹117,281.55 ÷ (1 + 16.54%)10
₹25,373.43
BSE:500480 Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= ₹30,919.25 + ₹25,373.43
₹56,292.68
Equity Value per Share
(INR)
= Total value / Shares Outstanding
= ₹56,292.68 / 277.20
₹203.08
BSE:500480 Discount to Share Price
Calculation Result
Value per share (INR) From above. ₹203.08
Current discount Discount to share price of ₹745.05
= -1 x (₹745.05 - ₹203.08) / ₹203.08
-266.9%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Cummins India is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Cummins India's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Cummins India's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
BSE:500480 PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-03-31) in INR ₹25.68
BSE:500480 Share Price ** BSE (2019-03-20) in INR ₹745.05
India Machinery Industry PE Ratio Median Figure of 141 Publicly-Listed Machinery Companies 18.91x
India Market PE Ratio Median Figure of 2,728 Publicly-Listed Companies 16.54x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Cummins India.

BSE:500480 PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= BSE:500480 Share Price ÷ EPS (both in INR)

= 745.05 ÷ 25.68

29.01x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cummins India is overvalued based on earnings compared to the IN Machinery industry average.
  • Cummins India is overvalued based on earnings compared to the India market.
Price based on expected Growth
Does Cummins India's expected growth come at a high price?
Raw Data
BSE:500480 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 29.01x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts
9.5%per year
India Machinery Industry PEG Ratio Median Figure of 28 Publicly-Listed Machinery Companies 1.56x
India Market PEG Ratio Median Figure of 596 Publicly-Listed Companies 1.28x

*Line of best fit is calculated by linear regression .

BSE:500480 PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 29.01x ÷ 9.5%

3.05x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cummins India is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Cummins India's assets?
Raw Data
BSE:500480 PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-03-31) in INR ₹148.58
BSE:500480 Share Price * BSE (2019-03-20) in INR ₹745.05
India Machinery Industry PB Ratio Median Figure of 169 Publicly-Listed Machinery Companies 1.68x
India Market PB Ratio Median Figure of 3,614 Publicly-Listed Companies 1.11x
BSE:500480 PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= BSE:500480 Share Price ÷ Book Value per Share (both in INR)

= 745.05 ÷ 148.58

5.01x

* Primary Listing of Cummins India.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cummins India is overvalued based on assets compared to the IN Machinery industry average.
X
Value checks
We assess Cummins India's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Machinery industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Machinery industry average (and greater than 0)? (1 check)
  5. Cummins India has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Cummins India expected to perform in the next 1 to 3 years based on estimates from 23 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
9.5%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Cummins India expected to grow at an attractive rate?
  • Cummins India's earnings growth is expected to exceed the low risk savings rate of 7.6%.
Growth vs Market Checks
  • Cummins India's earnings growth is positive but not above the India market average.
  • Cummins India's revenue growth is positive but not above the India market average.
Annual Growth Rates Comparison
Raw Data
BSE:500480 Future Growth Rates Data Sources
Data Point Source Value (per year)
BSE:500480 Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts 9.5%
BSE:500480 Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 23 Analysts 10%
India Machinery Industry Earnings Growth Rate Market Cap Weighted Average 14.1%
India Machinery Industry Revenue Growth Rate Market Cap Weighted Average 12.6%
India Market Earnings Growth Rate Market Cap Weighted Average 18.5%
India Market Revenue Growth Rate Market Cap Weighted Average 11.8%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
BSE:500480 Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (11 months ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
All numbers in INR Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
BSE:500480 Future Estimates Data
Date (Data in INR Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-03-31 69,325 7,277 9,437 16
2020-03-31 62,200 7,243 8,440 18
2019-03-31 56,287 7,168 7,610 18
BSE:500480 Past Financials Data
Date (Data in INR Millions) Revenue Cash Flow Net Income *
2018-03-31 51,119 6,319 7,118
2017-03-31 51,064 7,482 7,363
2016-03-31 47,829 6,955 7,213
2015-12-31 47,924 7,781
2015-09-30 47,286 7,808
2015-06-30 46,750 7,846

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Cummins India's earnings are expected to grow by 9.5% yearly, however this is not considered high growth (20% yearly).
  • Cummins India's revenue is expected to grow by 10% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
BSE:500480 Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (11 months ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below

All data from Cummins India Company Filings, last reported 11 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

BSE:500480 Future Estimates Data
Date (Data in INR Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-03-31 33.89 40.00 28.60 16.00
2020-03-31 30.46 34.21 27.20 20.00
2019-03-31 27.49 30.58 26.60 19.00
BSE:500480 Past Financials Data
Date (Data in INR Millions) EPS *
2018-03-31 25.68
2017-03-31 26.56
2016-03-31 26.02
2015-12-31 28.07
2015-09-30 28.17
2015-06-30 28.30

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Cummins India is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Cummins India's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the India market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the India market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Cummins India has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Cummins India performed over the past 5 years?

  • Cummins India's last earnings update was 300 days ago.
The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Cummins India's growth in the last year to its industry (Machinery).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Cummins India's year on year earnings growth rate has been positive over the past 5 years.
  • Cummins India's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Cummins India's 1-year earnings growth is negative, it can't be compared to the IN Machinery industry average.
Earnings and Revenue History
Cummins India's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Cummins India Company Filings, last reported 11 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

BSE:500480 Past Revenue, Cash Flow and Net Income Data
Date (Data in INR Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-03-31 51,118.90 7,118.20 5,697.00
2017-03-31 51,063.80 7,362.70 5,113.00
2016-03-31 47,829.10 7,213.20 4,909.70
2015-12-31 47,924.20 7,781.40 6,801.90
2015-09-30 47,286.30 7,808.10 6,728.10
2015-06-30 46,749.70 7,845.90 6,660.50
2015-03-31 49,643.00 7,720.20 4,307.40
2014-12-31 42,403.50 7,372.00 5,697.10
2014-09-30 41,839.80 7,034.10 5,552.40
2014-06-30 39,806.50 6,458.20 5,411.10
2014-03-31 39,766.70 6,000.20 5,960.80
2013-12-31 41,514.70 6,467.70 5,943.40
2013-09-30 42,222.10 7,336.20 5,911.40
2013-06-30 43,767.50 7,497.50 5,849.20
2013-03-31 45,893.80 7,641.10 5,372.10
2012-12-31 44,673.40 7,201.40 5,503.30
2012-09-30 43,382.00 6,270.20 5,445.00
2012-06-30 43,306.60 5,946.50 6,078.60
2012-03-31 41,172.20 5,912.70 5,232.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Cummins India has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Cummins India used its assets more efficiently than the IN Machinery industry average last year based on Return on Assets.
  • Cummins India's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Cummins India's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Machinery industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Cummins India has a total score of 2/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Cummins India's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Cummins India's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Cummins India is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Cummins India's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Cummins India's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 12.6x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Cummins India Company Filings, last reported 11 months ago.

BSE:500480 Past Debt and Equity Data
Date (Data in INR Millions) Total Equity Total Debt Cash & Short Term Investments
2018-03-31 41,186.00 2,568.40 9,798.50
2017-03-31 38,711.00 2,521.40 7,949.90
2016-03-31 36,089.00 30.00 3,749.50
2015-12-31 32,958.80 0.00 2,217.70
2015-09-30 32,958.80 0.00 2,217.70
2015-06-30 28,865.20 0.00 4,991.80
2015-03-31 30,888.20 27.40 5,223.30
2014-12-31 28,153.60 0.00 4,243.90
2014-09-30 28,153.60 0.00 4,243.90
2014-06-30 25,651.50 0.00 5,284.50
2014-03-31 25,651.50 0.00 5,284.50
2013-12-31 26,977.30 0.00 8,525.90
2013-09-30 26,977.30 0.00 8,525.90
2013-06-30 23,867.30 0.00 9,288.20
2013-03-31 23,867.30 0.00 9,288.20
2012-12-31 23,846.40 0.00 9,372.30
2012-09-30 23,846.40 0.00 9,372.30
2012-06-30 20,431.50 0.00 7,455.40
2012-03-31 20,431.50 0.00 7,455.40
  • Cummins India's level of debt (6.2%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (0% vs 6.2% today).
  • Debt is well covered by operating cash flow (246%, greater than 20% of total debt).
  • Cummins India earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess Cummins India's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Cummins India has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Cummins India's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
2.28%
Current annual income from Cummins India dividends. Estimated to be 2.4% next year.
If you bought ₹2,000 of Cummins India shares you are expected to receive ₹46 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Cummins India's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.5%).
  • Cummins India's dividend is above the markets top 25% of dividend payers in India (1.89%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
BSE:500480 Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
India Machinery Industry Average Dividend Yield Market Cap Weighted Average of 99 Stocks 1.3%
India Market Average Dividend Yield Market Cap Weighted Average of 1399 Stocks 1.3%
India Minimum Threshold Dividend Yield 10th Percentile 0.3%
India Bottom 25% Dividend Yield 25th Percentile 0.5%
India Top 25% Dividend Yield 75th Percentile 1.9%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

BSE:500480 Future Dividends Estimate Data
Date (Data in ₹) Dividend per Share (annual) Avg. No. Analysts
2021-03-31 19.82 17.00
2020-03-31 18.10 19.00
2019-03-31 15.69 17.00
BSE:500480 Past Annualized Dividends Data
Date (Data in ₹) Dividend per share (annual) Avg. Yield (%)
2019-02-06 17.000 2.357
2018-05-24 15.000 2.056
2018-02-01 14.000 1.820
2017-05-18 14.000 1.540
2017-02-01 14.000 1.495
2016-05-25 14.000 1.667
2016-02-02 14.000 1.607
2015-05-28 14.000 1.389
2014-09-10 13.000 1.566
2014-05-22 13.000 1.972
2014-02-04 13.000 2.482
2013-05-10 13.000 3.020
2013-01-31 11.000 2.206
2012-05-15 11.000 2.349
2011-05-30 11.429 2.698
2011-02-03 10.000 2.070
2010-08-13 8.571 1.606
2009-07-31 3.714 1.169
2009-06-03 4.714 2.491
2009-06-01 4.714 2.512
2009-05-26 4.714 2.518
2009-03-23 5.714 3.872

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Cummins India's earnings are paid to the shareholders as a dividend.
  • Dividends paid are covered by earnings (1.7x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be covered by earnings (1.7x coverage).
X
Income/ dividend checks
We assess Cummins India's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.3%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Cummins India afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Cummins India has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Cummins India's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Sandeep Sinha
COMPENSATION ₹14,498,000
AGE 47
TENURE AS CEO 1.1 years
CEO Bio

Mr. Sandeep Sinha has been Managing Director and Additional Director of Cummins India Limited since February 1, 2018 and served as its Chief Operating Officer since January 2015 to January 31, 2018. Mr. Sinha served as Vice President of India ABO (Area Business Organization) at Cummins India Limited since 2018. Prior to this, Mr. Sinha was the Vice President of the Industrial Engine Business in India, where he focused on several key areas like safety, quality, operational and supply-chain excellence. He played a key role in the start-up of multiple plants at the Cummins Megasite in Phaltan, India. With more than 15 years of experience with Cummins, Mr. Sinha has assumed various leadership roles across entities, including the New and ReCon Parts business in India and Corporate Strategy in the U.S. After graduating as an Engineer from the Manipal Institute of Technology, he joined Saint Gobain India for 6 years and became the National Sales Manager. He then pursued his graduate degree in Business Administration from the Kelley School of Business, Indiana University.

CEO Compensation
  • Sandeep's compensation has been consistent with company performance over the past year.
  • Sandeep's remuneration is lower than average for companies of similar size in India.
Management Team Tenure

Average tenure and age of the Cummins India management team in years:

1.2
Average Tenure
55
Average Age
  • The average tenure for the Cummins India management team is less than 2 years, this suggests a new team.
Management Team

Sandeep Sinha

TITLE
MD & Additional Director
COMPENSATION
₹14M
AGE
47
TENURE
1.1 yrs

Rajiv Batra

TITLE
CFO and Head of Internal Audit
AGE
62

Hemiksha Bhojwani

TITLE
Compliance Officer
TENURE
0.2 yrs

Nagarajan Balanaga

TITLE
Head of Human Resources
TENURE
0.6 yrs

Sophia Manivel

TITLE
Head of Information Technology
TENURE
1.2 yrs

Anjali Pandey

TITLE
Head of Components Business
TENURE
1.2 yrs

Bhavana Bindra

TITLE
Head of Distribution Business
TENURE
1.2 yrs

Mark Firth

TITLE
Head of Engineering
TENURE
1.2 yrs

Amit Kumar

TITLE
Chief of Staff
AGE
55
TENURE
1.2 yrs

Ashwath Ram

TITLE
Head of Engine Business
TENURE
1.2 yrs
Board of Directors Tenure

Average tenure and age of the Cummins India board of directors in years:

6.4
Average Tenure
63
Average Age
  • The tenure for the Cummins India board of directors is about average.
Board of Directors

Mark Levett

TITLE
Chairman of the Board
AGE
68
TENURE
1 yrs

Sandeep Sinha

TITLE
MD & Additional Director
COMPENSATION
₹14M
AGE
47
TENURE
1.1 yrs

Rajeev Bakshi

TITLE
Independent Non-Executive Director
COMPENSATION
₹2M
AGE
61
TENURE
18.4 yrs

Nasser Munjee

TITLE
Independent Non-Executive Director
COMPENSATION
₹2M
AGE
66
TENURE
18 yrs

Prakash Telang

TITLE
Independent Non-Executive Director
COMPENSATION
₹2M
AGE
71
TENURE
6.2 yrs

Venu Srinivasan

TITLE
Independent Non-Executive Director
COMPENSATION
₹2M
AGE
66
TENURE
19.2 yrs

Priya Dasgupta

TITLE
Independent Non-Executive Director
COMPENSATION
₹2M
AGE
63
TENURE
21.1 yrs

Casimiro Antonio Leitao

TITLE
Non-Executive Director
AGE
54
TENURE
6.6 yrs

Suzanne Wells

TITLE
Non-Executive Director
TENURE
4.6 yrs

Norbert Nusterer

TITLE
Non-Executive Director
AGE
49
TENURE
2.4 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (₹) Value (₹)
X
Management checks
We assess Cummins India's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Cummins India has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

How Cummins India Limited (BOM:500480) Delivered A Better ROE Than Its Industry

and want a simplistic look at the return on Cummins India Limited (BOM:500480) stock. … Cummins India Limited (BOM:500480) delivered an ROE of 17.28% over the past 12 months, which is an impressive feat relative to its industry average of 10.80% during the same period. … However, ROE only measures returns against equity, not debt.

Simply Wall St -

Company Info

Description

Cummins India Limited designs, manufactures, distributes, and services engines and related technologies in India. The company operates through three business units: Engine Business, Power Systems Business, and Distribution Business. The Engine Business manufactures and markets diesel and natural gas engines ranging from 65 HP to 400 HP for the low, medium, and heavy-duty on-highway commercial vehicle markets, as well as the off-highway commercial equipment industry comprising construction and compressor. The Power Systems Business provides power generation systems in standby power and distributed power generation for individual and institutional customers in various segments, such as infrastructure, IT/ITES, data centers, realty, healthcare, and hospitality; and high horsepower engines for mining, marine, railways, oil and gas, and defense applications, as well as manufactures and exports open and enclosed low kilowatt generator sets. The Distribution Business offers products, services, and solutions for equipment and engines; and provides after-market support services to customers in India, Nepal, and Bhutan. The company also exports its products to the United States, the United Kingdom, Mexico, Singapore, and China. Cummins India Limited was founded in 1962 and is based in Pune, India. Cummins India Limited is a subsidiary of Cummins Inc.

Details
Name: Cummins India Limited
500480
Exchange: BSE
Founded: 1962
₹208,509,840,000
277,200,000
Website: http://www.cumminsindia.com
Address: Cummins India Limited
Cummins India Office Campus,
Tower A & B, 5th Floor,
Pune,
Maharashtra, 411045,
India
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
BSE 500480 Equity Shares Mumbai Stock Exchange IN INR 01. Jun 1999
NSEI CUMMINSIND Equity Shares National Stock Exchange of India IN INR 01. Jun 1999
Number of employees
Current staff
Staff numbers
0
Cummins India employees.
Industry
Construction Machinery and Heavy Trucks
Capital Goods
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/03/20 12:36
End of day share price update: 2019/03/20 00:00
Last estimates confirmation: 2019/03/13
Last earnings filing: 2018/05/24
Last earnings reported: 2018/03/31
Last annual earnings reported: 2018/03/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.