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INVESTMENT INSIGHTS

Check Before You Invest : Cummins India Ltd

BSE: 500480 NSE: CUMMINSIND ISIN: INE298A01020
  |   Sector:  Automobiles   |   Industry:  Diesel Engines

Snapshot

Q.1 Which industry/sub-sector does Cummins India Ltd belong to?
Cummins India Ltd belongs to the Automobiles sector, operating specifically within the Diesel Engines segment.
Q.2 Is Cummins India Ltd a good quality company?
Cummins India Ltd is a quality company, based on a 10 year financial track record.
Q.3 Is Cummins India Ltd undervalued or overvalued?
Cummins India Ltd appears Overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Cummins India Ltd a good buy now?
Cummins India Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Cummins India Ltd?
Cummins India Ltd revenue growth is 15.5% for FY-2025 , which is above its 5 year CAGR of 14.9% , indicating faster growth.
Q.2 Gross Profit margin of Cummins India Ltd?
Cummins India Ltd Gross profit margin which is the profit after deduction of direct costs, is 23.7% for FY-2025 , which is above its 5 year median of 19.3% , indicating increasing margins.
Q.3 Operating Profit Margin of Cummins India Ltd?
Cummins India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 20.01% for FY-2025 , which is above its 5 year median of 16.04% indicating increasing margins.
Q.4 Net Profit Margin of Cummins India Ltd?
Cummins India Ltd Net Profit Margin is 19.25% for FY-2025 , is above with its 5 year median of 15.8%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 23.7 19.3
Operating Profit Margin 20.01 16.04
Net Profit Margin 19.25 15.8
Q.5 Return on Asset of Cummins India Ltd?
Cummins India Ltd Return on Asset is 20.9(x), which is above its 5 year historical median of 16.34(x), indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Cummins India Ltd?
Cummins India Ltd Return on equity is 28.22% for FY-2025 , which is above its historical median of 22.53%, indicating the business is making better use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Cummins India Ltd?
Cummins India Ltd Return on capital employed is 36.55% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Cummins India Ltd?
Cummins India Ltd Cash conversion cycle is 41 , below its historical median of 44 , indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1.11 1.06
ROE 28.22 22.53
ROCE 36.55 27.6
Cash Conversion Cycle 41 44
Q.9 Debt to Equity ratio of Cummins India Ltd?
Cummins India Ltd Debt-to-Equity ratio is 0.00 , which is lower with the industry average of 0.02 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Cummins India Ltd?
Cummins India Ltd Debt to cash flow from operations is 0 , which is at a healthy level, indicating the business is able to service its debt comfortably.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Cummins India Ltd?
Promoters hold 51.00% of the Cummins India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Cummins India Ltd vs industry peers?
Cummins India Ltd revenue CAGR is 14.89% , compared to the industry median CAGR of 14.89% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 10,390.7 7,772.1
Gross Profit 2,462.7 1,500
Operating Profit 2,080 1,246
Net Profit 2,000 1,228
Operating Efficiency
Current Level Industry Median
Asset Turnover 1.11 1.06
ROE 28.22 22.53
ROCE 36.55 27.6
Cash Conversion Cycle 41.12 44

Valuation & price assessment

Q.1 Stock return of Cummins India Ltd over the last decade?
Over the last 9 years, the stock has delivered a CAGR of 18.6% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 18.6% 42.9% 47.7% 77.5%
Q.3 Valuation ratios of Cummins India Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 63.53 21.66 52.27
Price to Book 17.11 2.95 7.77
Price to Sales 12.48 3.08 1.86
EV to EBITDA 47.25 18.00 19.90

Check more companies

1. Maruti Suzuki
2. Mahindra & Mahindra
3. Bajaj Auto
4. Eicher Motors
5. TVS Motor
6. Tata Motors
7. Hyundai Motor India
8. Cummins India
9. SamvardhanaMotherson
10. Tata MotorsPassenger
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