Cummins India Limited (NSE:CUMMINSIND) First-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Shareholders might have noticed that Cummins India Limited (NSE:CUMMINSIND) filed its first-quarter result this time last week. The early response was not positive, with shares down 8.1% to ₹1,796 in the past week. Results overall were respectable, with statutory earnings of ₹12.76 per share roughly in line with what the analysts had forecast. Revenues of ₹22b came in 4.3% ahead of analyst predictions. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Cummins India

After the latest results, the 20 analysts covering Cummins India are now predicting revenues of ₹88.7b in 2024. If met, this would reflect a credible 6.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dip 3.6% to ₹48.13 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹86.5b and earnings per share (EPS) of ₹49.49 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a credible to revenue, the consensus also made a small dip in its earnings per share forecasts.

The consensus price target was unchanged at ₹1,680, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Cummins India analyst has a price target of ₹2,230 per share, while the most pessimistic values it at ₹1,111. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Cummins India's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.3% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that Cummins India is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cummins India. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Cummins India going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Cummins India you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.