The shares of a Mid-Cap company specializing in designing, manufacturing, distributing, and servicing diesel and natural gas engines, power generation systems, and related components and technologies, declined by upto 7 percent after its parent company cut its future earnings guidance.
With a market capitalization of Rs. 77,316.62 crore on Tuesday, shares of Cummins India Limited declined upto 7.6 percent, making a low of Rs. 2714.40 per share compared to its previous closing price of Rs. 2940.75 per share.
Cummins India Limited, the country’s leading manufacturer of diesel and natural gas engines, has seen a bearish trend in today’s session because its parent company in the U.S. (Cummins Inc.) withdrew its revenue forecast for the year.
The withdrawal is due to global uncertainties, including trade tensions like the U.S. tariff war. In India, Cummins had expected 10 percent revenue growth, including from its joint ventures, but that plan is now been suspended.
For the March quarter, total revenues in India (including JVs) fell 14 percent on a YoY Basis, and PowerGen revenue specifically dropped 11 percent from the same quarter last year. Since Cummins India’s performance closely follows the PowerGen segment, this downturn has also affected the stock.
Finanacials & Others
The company’s revenue rose by 21.4 percent from Rs. 2,640.77 crore to Rs. 3,207.54 crore in Q3FY24-25. Meanwhile, the Net profit increased from Rs. 498.91 crores to Rs. 558.46 crores during the same period.
The company is debt-free and financially strong, with an average Return on Equity (ROE) of 16.78 percent and Return on Capital Employed (ROCE) of 20.22 percent over the last three years. It has also delivered consistent growth, with a 3-year average net profit growth of 22.6 percent.
Cummins India Ltd is a part of the Cummins Inc. Group USA. It designs, manufactures, distributes, and services diesel and alternative-fuel engines from 2.8 to 100 liters, diesel and alternative-fueled power generator sets of up to 3000 kW (3750 kVA), as well as related components and technology.
Written by Sridhar J
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