Neutral on Cummins India, target Rs 908 : Yes Securities

Yes Securities has a neutral call on Cummins India Ltd. with a target price of Rs 908 .The current market price of Cummins India Ltd. is Rs 831 Time period given by the brokerage is a year when Cummins India Ltd. price can reach defined target. Yes Securities expects 11.3%/9.3% sales/earnings CAGR for Cummins India over FY16-18E. The growth in earnings will be aided by a gradual recovery in domestic market even as exports slacken in FY17. CIL’s ability to launch energy efficient products better than competition has allowed it to create an expanding economic moat. CIL will continue to command premium valuations owing to its superior product offering, strong balance sheet and return ratios.