Cummins India - Strong Quarter, Brighter Demand Outlook: Anand Rathi
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Anand Rathi Report
Cummins India Ltd.'s Q2 revenue/Ebitda grew 48%/35% YoY, ahead of our estimates. Growth picked up domestically and in exports. Sectors such as healthcare, data centres, residential realty, mining, etc., boosted growth.
In the quarter, Cummins India had one large order from a data centre project, likely to be repeated due to the rising need for data storage.
Per management, the domestic market continued to be promising, driven by the government's infra push, pent-up demand and economic recovery.
Management aims to expand margins through better products at higher prices, greater operating leverage and localisation.
On the strong Q2 FY22, we revise FY22E/FY23E earnings 4.1%/1.6%.
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