Cummins India’s guidance on the export business and sustainability of margins are key inputs for investors
Moneylife Digital Team 13 May 2013

Cummins India could recoup some of its lost ground on the back of a one-time gain of Rs491 million from sale of investments, says Nomura Equity Research in its First Look on the company’s stock

 
Cummins India reported weak quarterly results in the fourth quarter of FY13 on the back of a sharp fall in EBITDA margins (-236bps year-on-year and -193bps quarter-on-quarter), which resulted in EBITDA missing Nomura’s estimates by 17%. However, at the net profit level, the company could recoup some of its lost ground on the back of a one-time gain of Rs491 million from sale of investments. 
 
Nomura looks forward to Cummins India’s management’s guidance on the export business and sustainability of margins as key inputs for investors in the stock market. The company’s conference call on the subject is slated for 13 May 2013. Overall, Nomura thinks that the stock market would be more focused on improvement in conditions in the export and domestic businesses, which are likely to drive earnings growth on a more sustainable basis. 
 
Cummins India’s performance in FY13 is given in the table below (Rs million):
 
Cummins India, Nomura Equity Research, management guidance, exports, sale of investments, conference call.
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