This MNC Largecap Stock Gave 188.38% Return In 3-years. Should You Buy?

Cummins India Limited stock price rallied exponentially by a whopping 188.38% in a span of 3-years. Prabhudas Liladhar has recommended investors to currently buy or accumulate this multinational company stock. An analyst from the leading brokerage company tracked this bluechip's quarter 3 numbers and evaluated its valuation numbers, which shows optimism. The company being an MNC, its demand momentum continues.

Cummins Quarter 3 results update

Prabudhas Liladhar's analyst noticed the Cummins quarterly figures and tallied it with the estimates. "Cummins India Q3FY23 results, beat on all fronts, gross and EBITDA margins expand. Standalone revenue grew 25.7% YoY to Rs 21.4 billion as compared to estimate of Rs 19.9 billion and consensus estimate of ~Rs 20.4 billion, driven by strong domestic and export revenue. Demand momentum seen in previous quarters continued across segments, including in international markets. Domestic revenue grew 27.1% YoY to Rs 16.0 billion (~74.8% of total sales), while exports grew 23.0% YoY to Rs 5.4 billion (~25.2% of total sales). Gross margin increased by 52bps YoY to 33.8% in Q3FY23 (vs 33.3% in Q3FY22), owing to moderation in commodity and raw material costs. EBITDA grew 52.4% YoY to Rs 4.1 billion, while estimate was of Rs 3 billion and consensus estimate of ~Rs 3.1 billion, with EBITDA margins expanding 331bps to 18.9% in Q3FY23 (vs 15.6% in Q3FY22), on account of prudent cost management. Adj. PAT grew 49.5% YoY to Rs 3.6 billion aided by strong operational efficiencies."

Cummins Valuation

Prabhudas Liladhar analyst has shared insights about Cummins India outlook and valuation. "Cummins continues to see supply chain challenges, especially for specific electronic and other components. With geopolitical risk and inflation likely to slow down developed markets, the company remains cautiously optimistic about the short to medium-term demand outlook. Considering the uncertainty, Cummins will not provide any guidance for FY24 at this time. At the CMP, the stock is currently trading at 42.8x/37.4x/34.1x FY23E/FY24/FY25E. We have an Accumulate rating on stock with TP of Rs1,514. We may revise our rating post the concall."

Cummins India stock movement

Cummins India stock price closed at Rs 1577.70 per share, it was 6.94% up on intraday basis. It's 52-week low is at Rs 907 and 52-week high is at Rs1,618, plus its free float market captalisation is Rs 21,429.58 crore. If you had invested in the stock of this MNC stock a year ago, you would have gained a profit of 69.17%.

Disclaimer

The stocks have been picked from the brokerage report of Prabhudas Liladhar, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.