Cummins India Limited is a leading manufacturer of diesel and natural gas engines in the country. It is also heavily involved in designing, distributing, and servicing engine-related technologies such as fuel systems, filtration systems, power generation, et cetera.
The market capitalisation of Cummins India Limited, as of June 4, 2018, is a little over Rs.18,740 crore.
Company’s Wealth and Recent Performance
- The net sales of the company for the Q4 FY 2017-18 stood at Rs.1,206 crore, in contrast to Rs.1,156 crore reported in the same quarter of the preceding year. On the whole, the sales improved marginally by 4%. However, when we compare the net sales with the December quarter, we will observe that they have actually declined by 9%.
- The domestic sales in the fourth quarter stood at Rs.816 crore - a 5% decline over the Q4 FY17 and 9% decline over the Q3 FY18. However, Cummins India Limited made up for this small decline by reporting healthy figures in its exports operations. Exports grew by 30% over the same quarter last year and are priced at Rs.390 crore.
- Considering the net sales for the year ended on March 31, 2018, it was reported to be at Rs.4,952 crore, which in comparison with the same period of the previous year, is a marginal decline.
- The net profit before tax for the Q4 FY2017-18 was Rs.195 crore. In comparison to the same quarter of the previous fiscal, this number is 7% higher. However, when compared with the December quarter, the profit has gone down by 5%. Similarly, the net profit before tax for the entire fiscal year was reported to be at 852 crore - a 6% decline over the previous year.
Cummins India Limited Stock Trends in 2018
- The start of January 2018 was marked by Cummins shares trading at levels above Rs.900. The stock price didn’t undergo any major fluctuation in its value over the course of the month. The closing price at the end of the month was Rs.903 on NSE. In February, following turbulence in the international markets, the price dropped sharply to enter the Rs.800 territory. Cummins stocks, just like the BSE SENSEX and NIFTY 50 indices, appeared to be bearish owing to the market conditions. The closing price on February 28 was Rs.795.
- The bear run was seen through the month of March as well. The share price of Cummins continued to fall and by the end of the month, Cummins stocks were trading at levels above Rs.700. In April, the shares staged a recovery but they failed to reach their previous highs. There were no signs of relief in the month of May as well. The price continued to fall bit by bit and at the end of the month, the closing price of Cummins shares on NSE was Rs.701.
Cummins India Limited Stock Trends in 2016 and 2017
- The stock price of Cummins India Limited at the start of January 2016 was Rs.1,038. The shares started off on a high but over the course of the next few weeks, the price went down. An interim dividend of 250% was announced in February but that didn’t do well to appeal to the investors. By early March, the Cummins India stock price was moving at around Rs.850 and it remained that way for the rest of the month.
- In April, the share price of Cummins India Limited rose slightly but failed to break past to Rs.900 level. The stock price continued to exhibit a similar behaviour in the month of May as well with prices staying at levels well below Rs.900. However, the start of June was marked by a sharp nosedive in the Rs.700 territory. Nonetheless, the stock managed to recover by the end of the month.
- A final dividend of 400% was announced in July 2016. It did well to boost investors’ sentiments and along with the help of favourable market conditions, the stock price of Cummins India Limited crossed Rs.900 on September 30.
- However, post demonetisation, the markets entered a bear run and it continued for the rest of the year. In early December, the Cummins India share price was levels above Rs.750. The stocks recovered slightly by the end of the year and the closing price on December 30, 2016, was Rs.818.
- At the start of 2017, the Cummins shares commenced a bull run. The share price rose significantly driven by a positive market outlook. In February, an interim dividend of 250% was announced around which time, the stocks were trading at roughly Rs.900. The prices dipped slightly at the start of March but went on to soar eventually.
- The Cummins India stocks enjoyed a terrific bull run through the months of April and May. The stock price finally crossed the Rs.1,000 mark at the end of April and by mid-May, the shares were trading at levels above Rs.1,060. Unfortunately, this bull run was immediately followed by a sharp nosedive and by early June, the stocks were back to be traded at Rs.900 levels.
- Things remained fairly stagnant in the month of June. It was not until mid-July that the shares starting going up again. A final dividend of 450% was announced later that month and the stock price at that time was Rs.995. However, the start of August was marked by a sharp decline in the price. It shed its recently made gains and went back to be traded at levels well below Rs.950. Things didn’t change a lot in the month of September either. Prices were a bit volatile but they retained their bearings at levels below Rs.950.
- The same was the case for the month of October as well. In November, the Cummins share price took another nosedive and went down to be traded at levels around Rs.850. They stayed in this territory for more than a month before finally recovering and moving up to cross Rs.900. The closing price at the end of the year was Rs.913.
Should you invest in Cummins India Limited?
- The variation in the share price of Cummins India Limited has taken the investors on a wild and unpredictable ride. The stocks, which were trading at levels above Rs.900 in March 2017, are trading at levels below Rs.700 in early June 2018. The company’s stock has fallen by more than 15% in this 12-month period. It is worth remarking that in the same period, India’s benchmark stock market index - S&P BSE SENSEX, has improved by the same amount.
- The company’s financials are not that convincing either. In the FY18 financial reported, Cummins India Limited reported a marginal increase in domestic sales and a marginal decline in exports. The net profit before tax also took a hit by 6% over the same period in the previous year.
- At the same time, the management of the company is optimistic about improving its domestic and export business. Through its five-year growth plan, it is expecting to improve its domestic business by 9-11 percent, while the target for exports is set at 0-5 percent. It also expects that its power genset and construction equipment business will improve when the country shifts to new emission norms.
- In comparison to its peers, Cummins India is doing exceptionally well in terms of sales turnover and net profit. From a long-term perspective, you can consider investing in this stock considering that the company is optimistic about its future potential. However, it is recommended that you carry out your own research before investing.
Cummins India Limited is a part of the American company Cummins Incorporation (previously known as Cummins Engine Company Corporation). Cummins Inc. is a Fortune 500 company that designs, manufactures, distributes, and services engines and related technologies. It is worth noting that in 2017, Cummins Incorporation reported sales of $20.4 billion. Its operations in India, under Cummins India Limited, are centred around these aspects.
Cummins India Limited consists of seven legal entities which are involved in research and development and various engine technologies like fuel systems, lubrication, filtration, emission solutions, electrical power generation and distribution systems, and air handling. These seven companies are Cummins Research and Technology India Private Limited, Cummins Sales and Service Private Limited, Valvoline Cummins Private Limited, Fleetguard Filters Private Limited, Tata Cummins Private Limited, Cummins Technologies India Private Limited, and Cummins Generator Technologies Private Limited.
History of the Company
The history of Cummins India Limited can be traced back to the year 1962 when the erstwhile Cummins Engine Company Incorporation and Kirloskar Oil Engines Limited entered into a joint partnership. 50% of this newly formed entity was owned by Cummins, while 25.50% was owned by Kirloskar Oil Engines Limited. The ownership of the remaining 24.50% was floated on the Bombay Stock Exchange. Later in that decade, Kirloskar Cummins commenced export operations in India which marked the beginning of a new chapter in the company’s book. Over the course of next few decades, Kirloskar Cummins established joint ventures with companies like Tata, Newage, and Fleetguard, all of which are operational today.
In 1997, Cummins Incorporation increased its stake to 51% in Kirloskar Cummins, thus becoming the majority shareholder. They followed this with more joint ventures and in the 2000s, Cummins India set up operating plants and colleges of engineering. In 2012, Cummins India completed 50 years of operations in India.
Management of the Company
Sandeep Sinha - Vice President of the India Area Business Organisation and Managing Director of Cummins India Limited.
Rajiv Batra - Chief Financial Officer
Venu Srinivasan - Independent Director
Cummins India Limited Listings in NSE, BSE, and Indices
The stocks of Cummins India are available for trading on the Bombay Stock Exchange Limited, and the National Stock Exchange of India Limited. The respective codes for the same have been mentioned below.
- BSE Code - 500480
- NSE Code - CUMMINSIND
- ISIN - INE298A01020
- Sector - ENGINES
The company, being a crucial player in the automotive segment, comprises many stock market indices. Some of them are:
- NIFTY 100
- NIFTY 500
- S&P BSE AllCap
- S&P BSE Carbonex
- S&P BSE SENSEX Next 50
- NIFTY Next 50
Cummins India Office Campus
Tower A & B, Survey No. 21, Balewadi
Pune - 411-045,
Contact number - 020-67067000
Email: email@example.com, firstname.lastname@example.org
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