Cummins India 7% Earnings Cut; Retain BUY ::Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Cummins India

7% Earnings Cut; Retain BUY

BUY

CMP: Rs 685                                       Target Price: Rs 800

---

n     Cummins Q4FY11 results were below expectations – reports 23.0% yoy growth in APAT to Rs1.43 bn – led by lower revenue growth and consequent impact of operating leverage

n     During FY11- Export business grew 140% and Domestic business grew 23% - which in turn had Power Cogen growing at 30% and Industrials growing 23%

n     Gradual erosion of Ebidta margins from 23.3% in Q4FY10 to  18.2% in Q4FY11 – tone down in Ebidta margin assumptions for FY12E and FY13E

n     Cut FY12E earnings by 7.5% to Rs34.5/Share and Introduce FY13E earnings of Rs40.0/Share – Retain BUY rating with target price of Rs800/Share