Over the last 18 months, Cummins India has seeded several growth levers, including: i) LHP Products, for Exports (potential revenues of INR10b+, vs INR3.9b in FY13) and Domestic (targeting ~15-20% market share, possible revenues of INR5b+) ii) Reconditioning (Recon), as CPCB-2 implementation will improve economic viability. We model revenue CAGR of 14.6% during FY14-16 largely led by potential ramp-up in LHP products and Recon business; excluding these segments, the growth CAGR stands at just 8.7%. Maintain Buy, with price target of INR560/sh (18x FY16E)
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Blue Chip Powerhouse Stock Cummins Benefits Heavily From New Pollution Norms: Motilal Oswal
Motilal Oswal has released a report that Blue Chip powerhouse Cummins India will be an important beneficiary of the new CPCB-2 norms notified by the Central Pollution Control Board for implementation wef April 1, 2014 for Diesel gensets upto 800kw (~1000hp)
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