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Last Updated on: 21 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 500480 | NSE: CUMMINSIND

Cummins India Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 20, 2024, 11:08 pm

Market Cap 91,511 Cr.
Current Price 3,301
High / Low4,172/1,834
Stock P/E48.5
Book Value 234
Dividend Yield1.15 %
ROCE35.2 %
ROE28.1 %
Face Value 2.00
PEG Ratio2.26

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Cummins India Ltd

Competitors of Cummins India Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Swaraj Engines Ltd 3,545 Cr. 2,9203,470/2,12624.0 2813.25 %51.6 %38.6 % 10.0
Kirloskar Oil Engines Ltd 16,256 Cr. 1,1201,450/52631.5 2010.54 %15.0 %17.7 % 2.00
Greaves Cotton Ltd 4,050 Cr. 175199/112 58.41.15 %3.72 %1.62 % 2.00
Cummins India Ltd 91,511 Cr. 3,3014,172/1,83448.5 2341.15 %35.2 %28.1 % 2.00
Industry Average28,840.50 Cr1,879.0034.67193.601.52%26.38%21.51%4.00

All Competitor Stocks of Cummins India Ltd

Quarterly Result

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024
Sales1,2471,1841,7271,7351,4941,6871,9512,1811,9262,2091,9002,5342,316
Expenses1,0791,0361,4681,4641,2871,4731,6611,7681,6001,8681,5611,9961,772
Operating Profit167149259270207214291412326341339538544
OPM %13%13%15%16%14%13%15%19%17%15%18%21%24%
Other Income1121876987778685104131117132112204
Interest3223525378766
Depreciation31313435353435343736384242
Profit before tax245303293320244264336479413415426602701
Tax %24%22%25%25%22%25%25%25%23%24%23%24%20%
Net Profit186237220241189199252360318316329455562
EPS in Rs6.708.547.938.696.827.179.1012.9911.4911.3911.8516.4120.26

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Sales4,5893,9774,4064,7095,0775,0825,6595,1584,3296,1407,7448,959
Expenses3,7543,2803,6743,9344,2764,3454,7954,5673,7295,2606,5027,197
Operating Profit8356977327758027388645906008801,2431,761
OPM %18%18%17%16%16%15%15%11%14%14%16%20%
Other Income268178287226208279293308349425406566
Interest541101715162016121627
Depreciation475380818594110119126134140158
Profit before tax1,0518189379109089081,0307598081,1591,4922,143
Tax %27%27%16%17%19%22%30%17%24%24%24%23%
Net Profit7646007867547357087236296188871,1301,661
EPS in Rs27.5721.6528.3527.2126.5025.5626.0722.7022.2931.9940.7659.91
Dividend Payout %47%60%49%51%53%59%65%62%67%58%61%33%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)-21.47%31.00%-4.07%-2.52%-3.67%2.12%-13.00%-1.75%43.53%27.40%46.99%
Change in YoY Net Profit Growth (%)0.00%52.47%-35.07%1.55%-1.15%5.79%-15.12%11.25%45.28%-16.13%19.60%

Cummins India Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2013-2014 to 2023-2024.

Growth

Compounded Sales Growth
10 Years:8%
5 Years:10%
3 Years:27%
TTM:17%
Compounded Profit Growth
10 Years:11%
5 Years:18%
3 Years:37%
TTM:43%
Stock Price CAGR
10 Years:14%
5 Years:42%
3 Years:55%
1 Year:78%
Return on Equity
10 Years:20%
5 Years:20%
3 Years:23%
Last Year:28%

Last Updated: Unknown

Balance Sheet

Last Updated: November 15, 2024, 1:29 am

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024Sep 2024
Equity Capital55555555555555555555555555
Reserves2,3312,5102,8313,4263,6873,9314,0754,1204,3514,7975,3136,1086,421
Borrowings00002512523095043341237312019
Other Liabilities1,2831,2081,4351,0091,0481,2941,4141,2751,2571,5401,7712,2152,383
Total Liabilities3,6703,7734,3224,4905,0415,5315,8545,9545,6976,8057,5128,4988,879
Fixed Assets4939191,2341,2891,5002,0192,0132,2642,1852,2042,2222,2952,339
CWIP12196171519463381598012861419765
Investments6284954653347075492858243696151,0851,2151,203
Other Assets2,4282,2622,4522,3482,3702,9253,3972,7863,0153,9254,1644,8915,271
Total Assets3,6703,7734,3224,4905,0415,5315,8545,9545,6976,8057,5128,4988,879

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +5293614986927466345505997887078111,280
Cash from Investing Activity +-21955-56-214-482-13316-20225-57487-247
Cash from Financing Activity +-359-426-423-468-225-473-523-411-872-77-684-1,133
Net Cash Flow-49-91910392943-14-6056214-100

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow835.00697.00732.00775.00551.00486.00555.0086.00567.00468.00-372.00-119.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days687278736995828091747585
Inventory Days678392746360636274656259
Days Payable697381696885837596898089
Cash Conversion Cycle668288786471626768505755
Working Capital Days404356786675787473625353
ROCE %42%33%31%29%25%21%24%17%19%21%27%35%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthDec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024Sep 2024
Promoters51.00%51.00%51.00%51.00%51.00%51.00%51.00%51.00%51.00%51.00%51.00%51.00%
FIIs12.54%10.52%10.35%10.37%12.20%13.99%14.37%16.45%16.51%17.36%17.95%17.50%
DIIs23.76%25.16%25.05%26.54%24.99%23.61%23.76%21.97%23.36%22.86%22.24%22.50%
Government0.20%0.20%0.20%0.20%0.20%0.20%0.20%0.20%0.20%0.14%0.14%0.11%
Public12.50%13.12%13.40%11.90%11.61%11.20%10.67%10.36%8.93%8.63%8.66%8.89%
No. of Shareholders1,00,7391,11,1841,09,0671,19,0271,17,1861,22,4481,19,8831,28,9711,17,9051,20,0431,50,0971,64,943

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
Kotak Emerging Equity Fund - Regular Plan5,863,3994.51920.532,800,7152024-11-20109.35%
HDFC Mid-Cap Opportunities Fund - Regular Plan3,707,3411.911214.322,800,7152024-11-2032.37%
Axis Midcap Fund2,800,7153.44917.362,800,7152024-11-200%
SBI Blue Chip Fund2,700,0001.95884.372,800,7152024-11-20-3.6%
Kotak Equity Opportunities Fund - Regular Plan1,825,0002.78597.772,800,7152024-11-20-34.84%
SBI Long Term Equity Fund1,663,1902.33544.772,800,7152024-11-20-40.62%
Nippon India Growth Fund1,300,0001.59425.812,800,7152024-11-20-53.58%
Sundaram Mid Cap Fund1,245,0573.8407.812,800,7152024-11-20-55.55%
Sundaram Mid Cap Fund - Institutional Plan1,245,0573.8407.812,800,7152024-11-20-55.55%
ICICI Prudential Bluechip Fund1,018,7410.61333.682,800,7152024-11-20-63.63%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue2.002.002.002.002.00
Basic EPS (Rs.)62.0744.3133.6822.9125.45
Diluted EPS (Rs.)62.0744.3133.6822.9125.45
Cash EPS (Rs.)58.9741.9335.2923.4225.39
Book Value[Excl.RevalReserv]/Share (Rs.)238.54207.73185.60167.80158.80
Book Value[Incl.RevalReserv]/Share (Rs.)238.54207.73185.60167.80158.80
Revenue From Operations / Share (Rs.)324.68280.38222.62157.29187.28
PBDIT / Share (Rs.)77.4856.1340.8130.8730.54
PBIT / Share (Rs.)71.7451.0035.9226.2926.19
PBT / Share (Rs.)70.6949.9040.2525.6824.72
Net Profit / Share (Rs.)53.2336.8030.4018.8321.04
NP After MI And SOA / Share (Rs.)62.0744.3133.6822.9125.45
PBDIT Margin (%)23.8620.0118.3319.6216.30
PBIT Margin (%)22.0918.1916.1316.7113.98
PBT Margin (%)21.7717.7918.0816.3213.19
Net Profit Margin (%)16.3913.1213.6511.9711.23
NP After MI And SOA Margin (%)19.1115.8015.1314.5613.59
Return on Networth / Equity (%)26.0221.3218.1413.6516.02
Return on Capital Employeed (%)28.7623.4518.5415.0315.68
Return On Assets (%)19.1815.5013.1210.6611.38
Total Debt / Equity (X)0.010.060.070.000.11
Asset Turnover Ratio (%)1.071.030.960.720.85
Current Ratio (X)2.892.702.532.942.16
Quick Ratio (X)2.432.222.112.431.79
Inventory Turnover Ratio (X)5.195.575.564.134.33
Dividend Payout Ratio (NP) (%)28.9927.0823.7430.5566.78
Dividend Payout Ratio (CP) (%)26.5424.2720.7325.4557.03
Earning Retention Ratio (%)71.0172.9276.2669.4533.22
Cash Earning Retention Ratio (%)73.4675.7379.2774.5542.97
Interest Coverage Ratio (X)78.3895.8193.0351.0640.28
Interest Coverage Ratio (Post Tax) (X)54.9164.7059.4132.1429.70
Enterprise Value (Cr.)81968.9844122.4630121.0524546.279047.57
EV / Net Operating Revenue (X)9.115.684.885.631.74
EV / EBITDA (X)38.1728.3626.6328.6810.69
MarketCap / Net Operating Revenue (X)9.265.815.055.851.74
Retention Ratios (%)71.0072.9176.2569.4433.21
Price / BV (X)12.617.846.055.482.05
Price / Net Operating Revenue (X)9.265.815.055.851.74
EarningsYield0.020.020.020.020.07

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Cummins India Ltd as of November 21, 2024 is: 3,225.74

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of November 21, 2024, Cummins India Ltd is Overvalued by 2.28% compared to the current share price 3,301.00

Intrinsic Value of Cummins India Ltd as of November 21, 2024 is: 3,916.73

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 21, 2024, Cummins India Ltd is Undervalued by 18.65% compared to the current share price 3,301.00

Last 5 Year EPS CAGR: 21.42%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a high average ROCE of 27.00%, which is a positive sign.
  2. The company has higher reserves (4,146.23 cr) compared to borrowings (174.85 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (5.00 cr) and profit (504.50 cr) over the years.
  1. The stock has a high average Working Capital Days of 62.58, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 67.33, which may not be favorable.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Cummins India Ltd:
    1. Net Profit Margin: 16.39%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 28.76% (Industry Average ROCE: 26.38%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 26.02% (Industry Average ROE: 21.51%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 54.91
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 2.43
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 48.5 (Industry average Stock P/E: 34.67)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 0.01
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Cummins India Ltd. is a Public Limited Listed company incorporated on 17/02/1962 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L29112PN1962PLC012276 and registration number is 012276. Currently Company is involved in the business activities of Manufacture of general purpose machinery. Company’s Total Operating Revenue is Rs. 6140.40 Cr. and Equity Capital is Rs. 55.44 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
EnginesCummins India Office Campus, Pune Maharashtra 411045cil.investors@cummins.com
http://www.cumminsindia.com
Management
NamePosition Held
Mr. Jennifer Mary BushChairperson
Mr. Ashwath RamManaging Director
Mr. Nasser M MunjeeIndependent Director
Ms. Rama BijapurkarIndependent Director
Ms. RekhaIndependent Director
Ms. Lira GoswamiIndependent Director
Mr. Sekhar NatarajanInd. Non-Executive Director
Mr. Farokh N SubedarInd. Non-Executive Director
Mr. Donald JacksonNon Executive Director
Mr. Bonnie Jean FetchNon Executive Director

FAQ

What is the latest intrinsic value of Cummins India Ltd?

The latest intrinsic value of Cummins India Ltd as on 21 November 2024 is ₹3225.74, which is 2.28% lower than the current market price of ₹3,301.00.

What is the Market Cap of Cummins India Ltd?

The Market Cap of Cummins India Ltd is 91,511 Cr..

What is the current Stock Price of Cummins India Ltd as on 21 November 2024?

The current stock price of Cummins India Ltd as on 21 November 2024 is ₹3,301.

What is the High / Low of Cummins India Ltd stocks in FY 2024?

In FY 2024, the High / Low of Cummins India Ltd stocks is 4,172/1,834.

What is the Stock P/E of Cummins India Ltd?

The Stock P/E of Cummins India Ltd is 48.5.

What is the Book Value of Cummins India Ltd?

The Book Value of Cummins India Ltd is 234.

What is the Dividend Yield of Cummins India Ltd?

The Dividend Yield of Cummins India Ltd is 1.15 %.

What is the ROCE of Cummins India Ltd?

The ROCE of Cummins India Ltd is 35.2 %.

What is the ROE of Cummins India Ltd?

The ROE of Cummins India Ltd is 28.1 %.

What is the Face Value of Cummins India Ltd?

The Face Value of Cummins India Ltd is 2.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Cummins India Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE