Bank of America puts 'buy' on Cummins India
Bank of America maintains `Buy’ rating on Cummins India with a target price of of Rs 660. Cummins Inc has revised up its revenue guidance for India in ‘10 by 6% and now expects 49% revenue growth.
Research: Bank of America
Rating: Buy
CMP: Rs 636
Bank of America maintains `Buy’ rating on Cummins India with a target price of of Rs 660. Cummins Inc has revised up its revenue guidance for India in ‘10 by 6% and now expects 49% revenue growth. This announcement was made along with the June ‘10 quarter result of Cummins Inc. Bank of America believes the guidance has a strong correlation with Cummins India and augurs well.
They have estimated 45% yo-y revenue growth in June ‘10 quarter for Cummins India, which is lower than the 45% growth reported by Cummins Inc for its Indian unit. Also, the estimated Rs 3,900 crore revenue in year ‘10 is 25% below the revenue guidance of $1049 million for the Indian unit. The key driver for strong growth is sharp recovery in demand for large size gensets.
Cummins India is seeing strong cyclical recovery in engine demand within India as well as in exports. Bank of America expects its EPS to grow 36% and 31% respectively in FY11E and FY12E respectively. Recent guidance of Cummins Inc implies almost 20%-25% upside to the FY11E EPS.
Disclaimer: Investor’s Guide does not accept responsibility for consequences of financial decisions taken by readers on the basis of information provided herein. The aim is to provide a reasonably accurate picture of financial and related opportunities based on information available with us.
Rating: Buy
CMP: Rs 636
Bank of America maintains `Buy’ rating on Cummins India with a target price of of Rs 660. Cummins Inc has revised up its revenue guidance for India in ‘10 by 6% and now expects 49% revenue growth. This announcement was made along with the June ‘10 quarter result of Cummins Inc. Bank of America believes the guidance has a strong correlation with Cummins India and augurs well.
They have estimated 45% yo-y revenue growth in June ‘10 quarter for Cummins India, which is lower than the 45% growth reported by Cummins Inc for its Indian unit. Also, the estimated Rs 3,900 crore revenue in year ‘10 is 25% below the revenue guidance of $1049 million for the Indian unit. The key driver for strong growth is sharp recovery in demand for large size gensets.
Cummins India is seeing strong cyclical recovery in engine demand within India as well as in exports. Bank of America expects its EPS to grow 36% and 31% respectively in FY11E and FY12E respectively. Recent guidance of Cummins Inc implies almost 20%-25% upside to the FY11E EPS.
Disclaimer: Investor’s Guide does not accept responsibility for consequences of financial decisions taken by readers on the basis of information provided herein. The aim is to provide a reasonably accurate picture of financial and related opportunities based on information available with us.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
