Cummins India falls as parent cuts guidance

MUMBAI: Shares of Cummins India are down on profit booking as sentiment turned bearish after its parent company, Cummins Inc., cut its full-year sales forecast.

US-based Cummins Inc. plunged 10 percent in trade yesterday after it cut global revenue guidance for 2012 on account of a slowdown in US orders from truck and power generation customers, strong dollar and softer demand in emerging markets. The company said demand in Brazil, India and China are not improving as expected.

Cummins India was trading at Rs 430.15, down 4.18 percent on the BSE. It has touched a high of Rs 441.15 and a low of Rs 419 today.

Meanwhile, brokerage Emkay Global Financial Services recently recommended an ‘Accumulate' on Cummins India with a price target of Rs 460 per share. The report said medium-term earnings performance will not get impacted by developments in the market place.

Technical call:

Fund Manager Ashwani Gujral is bearish on the counter. He has recommended going short on Cummins India with a stop loss of Rs 436 for a target of Rs 415.