Motilal Oswal: Cummins India Q2 Margin Surprise On Favourable Sales Mix; Outlook Weak   
Cummins India Ltd. office (image: Company website)

Motilal Oswal: Cummins India Q2 Margin Surprise On Favourable Sales Mix; Outlook Weak   

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Motilal Oswal Report

While Cummins India Ltd. reported in-line revenue, Ebitda came in 25% higher than our estimates.

This was largely owing to favorable mix (higher contribution of distribution segment and export revenue), continued cost rationalization measures, and cut in employee wages.

Further, cost reduction was aided by the reduction in warranty and royalty expenses.

As sales normalize and lower margin domestic product sales pick up, gross margin is likely to reverse to historical levels.

Click on the attachment to read the full report:

Motilal Oswal Cummins India Q2FY21 Result Update.pdf

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