PL First Cut – Cummins India (KKC) Q2FY24

PL First Cut – Cummins India (KKC) Q2FY24 – Amit Anwani – Research Analyst, Prabhudas Lilladher Pvt Ltd

Cummins India (KKC) Q2FY24 Results First Cut – Miss on revenue; EBITDA margins and PAT above estimate.

Result summary

✳️Standalone revenue grew 2.6% YoY to ~Rs19bn (PLe of Rs19.5bn estimate of ~Rs19.8bn), likely due to slowdown after pre-Buying of CPCB-IV implementation.

Gross margins expanded 487bps YoY to 36.7% in Q2FY24 on low base.

✳️EBITDA grew 16.5% YoY to Rs3.4bn (PLe ~Rs3.5bn and consensus estimate of ~Rs2.9bn), with EBITDA margins expanding 294bps to 17.8% in Q2FY24 (vs PL estimate of 15.5% and consensus estimate of 14.8%), partly impacted due to higher employee cost as % of sales (10.2% vs 8.2% in Q2FY23).

✳️Adj. PAT grew 30.2% YoY to Rs3.3bn, (PL estimate of ~Rs3bn and consensus estimate of ~Rs2.6bn) aided by higher other income (up 54.7% YoY to Rs1.3bn).

✳️At the CMP, the stock is currently trading at 37.5x/33.3x FY24/FY25E. We have an Hold rating on stock with TP of Rs1,788.