Cummins India Marginally Below Expectation; Retain BUY::Emkay

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Cummins India

Marginally Below Expectation; Retain BUY

BUY

CMP: Rs614                                        Target Price: Rs687

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n     Cummins Q1FY12 performance marginally below expectation (1) Revenue up 12% yoy to Rs10.5 bn, (2) EBITDA% down 350 bps yoy to 17.8% and (3) APAT up 2% yoy to Rs1.4 bn

n     CIL reported 10% volume growth and 2% price led growth in Q1FY12. Also, overall revenue mix remains unchanged at 75:25 in favor of domestic business

n     Cut FY12E earnings by 5% to Rs33.0/Share and FY13E earnings by 5% to Rs38.2/Share

n     Retain BUY with price target of Rs687/Share, despite an upside of 13% - as commodity price softening lends upside to earning estimates, which is currently not factored