|
Quantamental
Equity Research on CUMMINS INDIA LTD | Release: 30 Nov 2018 18:08:40
UTC+05:30 | Reporting Currency: INR | Trading Currency: INR |
Exchange:NSE/BSE NSE CODE:CUMMINSIND and BSE CODE:500480 |
| Last Close: |
INR 801 |
| Fair Value: |
INR 366.9 |
| Est. Price by Mar 19: |
INR 676.65 |
| Market Capitalization (INR
Crs): |
22203.72 |
| Industry: |
Industrial Machinery |
| Rating: |
SELL |
| Downside: |
-16% |
| Company Profile |
|
|
| Cummins India is principally engaged in the business of
manufacturing, trading and selling of engines and allied activities. |
| Growth Per Share |
|
|
| Particulars |
1-Year |
3-Year |
5-Year |
|
| Revenue % |
0% |
30% |
52% |
|
| EBIT % |
0% |
-2% |
-13% |
|
| Earnings % |
-4% |
-10% |
-7% |
|
| Book Value
% |
7% |
38% |
67% |
|
| Stock Total
Return % |
-23% |
-14% |
49% |
|
|
| Share holding
pattern |
| Particulars |
%age |
|
| (A) Promoter
& Promoter Group |
51.00 |
|
| (B) FII/FPI |
12.64 |
|
| (C)
DII/Insurance Companies |
23.46 |
|
| (D) Public holding < 2 lakhs of cap. |
8.86 |
|
| (E) Others |
4.04 |
|
| Grand Total |
100.00 |
|
|
| Fundamentals
(Historical and Estimated) |
| Particulars |
Mar-10 |
Mar-11 |
Mar-12 |
Mar-13 |
Mar-14 |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Price |
378 |
496 |
482 |
500 |
568 |
869 |
875 |
972 |
744 |
677 |
752 |
823 |
899 |
951 |
|
| Return on
Equity |
28% |
33% |
29% |
32% |
23% |
27% |
22% |
20% |
18% |
17% |
18% |
18% |
18% |
18% |
|
| Price to
Earning |
23.6 |
23.3 |
22.6 |
18.2 |
26.3 |
30.6 |
32.2 |
36.7 |
29.1 |
25.2 |
25.2 |
25.2 |
25.2 |
25.2 |
|
| EVTI |
3.3 |
3.2 |
3.0 |
2.7 |
3.7 |
5.0 |
4.8 |
5.0 |
3.8 |
3.0 |
3.0 |
3.0 |
3.0 |
3.0 |
|
| EVTIFM |
23.6 |
23.3 |
22.6 |
18.2 |
26.3 |
30.6 |
32.2 |
36.7 |
29.1 |
25.2 |
25.2 |
25.2 |
25.2 |
25.2 |
|
| Price to Book
Value |
6.7 |
7.6 |
6.5 |
5.8 |
6.1 |
8.3 |
7.0 |
7.2 |
5.2 |
4.4 |
4.5 |
4.5 |
4.5 |
4.4 |
|
| Debt to
Equity |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.1 |
0.1 |
0.1 |
0.1 |
0.0 |
0.0 |
0.0 |
|
| Dividend Yield |
2% |
2% |
2% |
3% |
2% |
2% |
2% |
1% |
2% |
2% |
2% |
2% |
2% |
2% |
|
| Cash Flow to
Firm |
11% |
6% |
3% |
5% |
3% |
2% |
1% |
3% |
2% |
4% |
4% |
5% |
6% |
6% |
|
|
| Detailed Estimates |
| Title |
Mar-18 |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| Sales |
5,082.50 |
5,734.97 |
6,358.83 |
6,925.96 |
7,407.97 |
7,778.36 |
|
| EBITDA |
1,017.04 |
1,250.09 |
1,386.08 |
1,509.70 |
1,614.77 |
1,695.51 |
|
| EBIT |
923.25 |
1,144.26 |
1,272.11 |
1,389.20 |
1,500.46 |
1,587.08 |
|
| PBT |
908.42 |
1,129.43 |
1,254.74 |
1,373.81 |
1,500.46 |
1,587.08 |
|
| NPAT |
708.47 |
745.54 |
828.26 |
906.85 |
990.45 |
1,047.63 |
|
| Price to
Earning |
29.10 |
25.16 |
25.16 |
25.16 |
25.16 |
25.16 |
|
| Price to Book
Value |
5.17 |
4.35 |
4.46 |
4.50 |
4.53 |
4.43 |
|
| Debt to
Equity |
0.06 |
0.07 |
0.06 |
- |
- |
- |
|
| Return on
Equity |
0.18 |
0.17 |
0.18 |
0.18 |
0.18 |
0.18 |
|
| Enterprise Value to Total Income (EVTI) |
3.79 |
3.04 |
3.04 |
3.02 |
3.04 |
3.01 |
|
| Enterprise Value to Total Income to Firm Margin(EVTIFM) |
46.67 |
45.96 |
45.91 |
45.40 |
45.28 |
44.59 |
|
| Price or Est.
Share Prices |
743.83 |
676.65 |
751.75 |
823.10 |
899.00 |
950.90 |
|
|
| DISCOUNTED CASH
FLOW |
| Title |
Mar-19 E |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
|
| PBT |
1,129.43 |
1,254.74 |
1,373.81 |
1,500.46 |
1,587.08 |
|
| Interest |
14.83 |
17.36 |
15.39 |
- |
- |
|
| Depreciation |
105.83 |
113.97 |
120.51 |
114.31 |
108.43 |
|
| Cash Flow
Before Tax |
1,250.09 |
1,386.08 |
1,509.70 |
1,614.77 |
1,695.51 |
|
| Tax Rate |
33.99 |
33.99 |
33.99 |
33.99 |
33.99 |
|
| Cash Flow
After Tax |
825.19 |
914.95 |
996.55 |
1,065.91 |
1,119.20 |
|
| Terminal Cash
Flow |
- |
14,004.71 |
|
| Total Cash
Flow |
825.19 |
914.95 |
996.55 |
1,065.91 |
15,123.92 |
|
| Present Value of
Cash Flow |
10,170.26 |
|
| Debt |
- |
|
| Value of Equity |
10,170.26 |
|
| Fair Value Per
Share |
366.90 |
|
|
| Equity |
|
|
|
|
22,204 |
|
| Debt |
|
|
|
|
252 |
|
|
| Beta |
Take from Reuters |
|
|
0.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Risk Free Rate |
Prevailing Yield in India |
|
|
8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Market Risk Premium |
Assuming 8.82% premium
for Equity Investments |
9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest Paid |
|
|
|
|
15 |
|
| Tax Benefit |
|
|
|
|
3 |
|
| Interest Net of Tax |
|
|
|
|
12 |
|
| Debt |
|
|
|
|
252 |
|
| Cost of Debt |
|
|
|
|
5% |
|
| Cost of Equity |
|
|
|
|
15% |
|
| Debt Weight |
|
|
|
|
1% |
|
| Equity Weight |
|
|
|
|
99% |
|
| WACC |
|
|
|
|
15% |
|
|
| Cash Flow of Mar-23 E |
|
|
|
|
1,119.20 |
|
| Growth |
|
|
|
|
6.1% |
|
| Present Value of Terminal
Cashflow |
|
|
|
|
14,004.71 |
|
|
| Peer Comparision |
| # |
Name |
CMP
Rs. |
Mar
Cap Rs.Cr. |
B.V.
Rs. |
Annualized
ROE % |
ROCE
% |
Latest
EVTI |
Latest
EVTIFM |
CMP
/ BV |
P/E |
Debt
/ Eq |
Div
Yld % |
Growth
Rate R % |
SGR
% |
Ann
Total Income |
PQEIOI |
QoQ
Sales % |
Qtr
Sales Var % |
QoQ
Profits % |
Qtr
Profit Var % |
Graham's
Number Rs. |
| 1 |
Cummins India |
801.00 |
22,204 |
145.91 |
27.00 |
21.20 |
3.42 |
37.45 |
5.49 |
30.50 |
0.06 |
1.87 |
11.15 |
10.51 |
6,262 |
51.00 |
167 |
11.97 |
28.87 |
15.61 |
38.36 |
| 2 |
Greaves Cotton |
123.25 |
3,010 |
41.14 |
25.53 |
25.94 |
1.22 |
16.05 |
3.00 |
17.01 |
- |
4.46 |
8.61 |
17.63 |
2,031 |
51.00 |
82 |
8.06 |
9.43 |
23.90 |
9.71 |
| 3 |
Kirloskar Oil |
204.15 |
2,952 |
116.52 |
12.58 |
10.63 |
0.63 |
18.77 |
1.75 |
16.90 |
0.01 |
2.45 |
6.52 |
14.35 |
3,113 |
59.33 |
118 |
-7.07 |
17.83 |
-16.94 |
37.94 |
| 4 |
Swaraj Engines |
1,438.90 |
1,745 |
168.15 |
56.85 |
46.99 |
1.62 |
18.56 |
8.56 |
20.89 |
- |
3.48 |
13.80 |
17.11 |
1,004 |
50.74 |
81 |
5.33 |
18.39 |
10.02 |
7.96 |
| 5 |
G G Engineering |
47.45 |
24 |
12.70 |
- |
22.89 |
1.08 |
1,276.40 |
3.74 |
27.72 |
0.30 |
- |
- |
1.08 |
24 |
67.79 |
-348 |
- |
- |
- |
- |
| 6 |
Graphite India |
933.65 |
18,244 |
232.04 |
271.14 |
57.86 |
1.81 |
3.95 |
4.02 |
6.14 |
0.10 |
1.82 |
209.53 |
-295.54 |
9,556 |
65.22 |
17 |
19.34 |
344.13 |
16.30 |
980.58 |
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