BSE:500480

Stock Analysis Report

Executive Summary

Cummins India Limited designs, manufactures, distributes, and services engines, generator sets, and related technologies in India.

Snowflake

Fundamentals

Excellent balance sheet established dividend payer.

Share Price & News

How has Cummins India's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.6%

500480

2.5%

IN Machinery

2.4%

IN Market


1 Year Return

-14.2%

500480

-7.9%

IN Machinery

8.0%

IN Market

Return vs Industry: 500480 underperformed the Indian Machinery industry which returned -7.9% over the past year.

Return vs Market: 500480 underperformed the Indian Market which returned 8% over the past year.


Shareholder returns

500480IndustryMarket
7 Day0.6%2.5%2.4%
30 Day-7.3%1.5%2.5%
90 Day-23.0%-0.3%3.6%
1 Year-12.1%-14.2%-6.3%-7.9%10.3%8.0%
3 Year-30.0%-34.1%-1.3%-5.1%22.3%16.0%
5 Year-13.2%-20.2%39.4%31.5%42.8%29.3%

Price Volatility Vs. Market

How volatile is Cummins India's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cummins India undervalued compared to its fair value and its price relative to the market?

22.56x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 500480 (₹578.7) is trading above our estimate of fair value (₹202.54)

Significantly Below Fair Value: 500480 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 500480 is poor value based on its PE Ratio (22.6x) compared to the Machinery industry average (12.5x).

PE vs Market: 500480 is poor value based on its PE Ratio (22.6x) compared to the Indian market (13x).


Price to Earnings Growth Ratio

PEG Ratio: 500480 is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: 500480 is overvalued based on its PB Ratio (3.7x) compared to the IN Machinery industry average (1.2x).


Next Steps

Future Growth

How is Cummins India forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

12.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 500480's forecast earnings growth (12.4% per year) is above the savings rate (7.6%).

Earnings vs Market: 500480's earnings (12.4% per year) are forecast to grow slower than the Indian market (18.4% per year).

High Growth Earnings: 500480's earnings are forecast to grow, but not significantly.

Revenue vs Market: 500480's revenue (10.8% per year) is forecast to grow slower than the Indian market (11.3% per year).

High Growth Revenue: 500480's revenue (10.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 500480's Return on Equity is forecast to be low in 3 years time (18.5%).


Next Steps

Past Performance

How has Cummins India performed over the past 5 years?

-0.03%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 500480's earnings have declined by -0.03% per year over the past 5 years.

Accelerating Growth: 500480's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 500480 had negative earnings growth (-1.2%) over the past year, making it difficult to compare to the Machinery industry average (13.2%).


Return on Equity

High ROE: 500480's Return on Equity (16.6%) is considered low.


Return on Assets

ROA vs Industry: 500480 has a higher Return on Assets than the Machinery industry average last year.


Return on Capital Employed

ROCE Improving: 500480's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Cummins India's financial position?


Financial Position Analysis

Short Term Liabilities: 500480's short term assets (₹34.3B) exceeds its short term liabilities (₹15.3B)

Long Term Liabilities: 500480's short term assets (34.3B) exceeds its long term liabilities (2.4B)


Debt to Equity History and Analysis

Debt Level: 500480's debt to equity ratio (7.3%) is considered satisfactory

Reducing Debt: Insufficient data to determine if 500480's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 500480's debt is well covered by operating cash flow (175.7%).

Interest Coverage: 500480 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 500480 has a high level of physical assets or inventory.

Debt Coverage by Assets: 500480's debt is covered by short term assets (assets are 10.968260x debt).


Next Steps

Dividend

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

2.94%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%0.6%markettop25%2.4%industryaverage1.6%forecastin3Years3.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 500480's dividend (2.94%) is higher than the bottom 25% of dividend payers in the Indian market (0.6%).

High Dividend: 500480's dividend (2.94%) is in the top 25% of dividend payers in the Indian market (2.41%)

Stable Dividend: 500480's dividend payments have been volatile in the past 10 years.

Growing Dividend: 500480's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (66.3%), 500480's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 500480's dividends in 3 years are forecast to be covered by earnings (64% payout ratio).


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Ashwath Ram 0

0.2yrs

Tenure

0

Mr. Ashwath Ram has been Managing Director of Cummins India Ltd since August 17, 2019. Mr. Ram served as Head of Engine Business at Cummins India Ltd since 2018. 


Management Age and Tenure

1.8yrs

Average Tenure

Experienced Management: 500480's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

6.8yrs

Average Tenure

62yo

Average Age

Experienced Board: 500480's board of directors are considered experienced (6.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Rajiv Batra (63yo)

    CFO and Head of Internal Audit

    • Tenure: 0yrs
  • Amit Kumar (56yo)

    Chief of Staff

    • Tenure: 1.8yrs
  • Nagarajan Balanaga

    Head of Human Resources

    • Tenure: 1.2yrs
  • Shveta Arya

    Head of Distribution Business

    • Tenure: 3.3yrs
  • Anjali Pandey

    Head of Components Business

    • Tenure: 1.8yrs
  • Ashwath Ram

    Managing Director

    • Tenure: 0.2yrs
  • Mandar Deo

    Head of Power Systems

    • Tenure: 1.8yrs
  • Aditi Sharma

    Head of Quality

    • Tenure: 1.8yrs
  • Hemiksha Bhojwani

    Company Secretary & Compliance Officer

    • Tenure: 0.8yrs
  • Anubhav Kapoor

    Group VP of Legal & Group Company Secretary

    • Tenure: 0yrs

Board Members

  • Mark Levett (69yo)

    Independent Chairman of the Board

    • Tenure: 1.6yrs
  • Prakash Telang (72yo)

    Independent Non-Executive Director

    • Tenure: 6.8yrs
    • Compensation: ₹2.08m
  • Venu Srinivasan (67yo)

    Independent Non-Executive Director

    • Tenure: 19.8yrs
    • Compensation: ₹1.98m
  • Nasser Munjee (67yo)

    Independent Non-Executive Director

    • Tenure: 18.6yrs
    • Compensation: ₹2.00m
  • Rajeev Bakshi (62yo)

    Independent Non-Executive Director

    • Tenure: 19yrs
    • Compensation: ₹2.08m
  • Casimiro Antonio Leitao (55yo)

    Non-Executive Director

    • Tenure: 7.2yrs
  • Norbert Nusterer (50yo)

    Non-Executive Director

    • Tenure: 3yrs
  • Donald Jackson (50yo)

    Non-Executive Non-Independent Director

    • Tenure: 1yrs
  • Anjuly Duggal (62yo)

    Non-Executive Independent Director

    • Tenure: 0.8yrs
    • Compensation: ₹575.00k
  • Lorraine Meyer

    Additional Non-Executive Director

    • Tenure: 0yrs

Company Information

Cummins India Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cummins India Limited
  • Ticker: 500480
  • Exchange: BSE
  • Founded: 1962
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: ₹160.402b
  • Shares outstanding: 277.20m
  • Website: https://www.cumminsindia.com

Number of Employees


Location

  • Cummins India Limited
  • Cummins India Office Campus
  • Tower A & B, 5th Floor
  • Pune
  • Maharashtra
  • 411045
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
500480BSE (Mumbai Stock Exchange)YesEquity SharesININRJun 1999
CUMMINSINDNSEI (National Stock Exchange of India)YesEquity SharesININRJun 1999

Biography

Cummins India Limited designs, manufactures, distributes, and services engines, generator sets, and related technologies in India. The company operates through three business units: Engine Business, Power  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 12:37
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
Annual Earnings2019/03/31


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.