🌟 Stock of the Week: Cummins India Ltd.

Hello ,

Each week, we spotlight one stock that’s delivering strong returns backed by robust fundamentals and market momentum. This week’s focus on Cummins India Ltd – A capital goods powerhouse delivering steady compounding, backed by robust fundamentals.

🌟 Stock of the Week: Cummins India Ltd. (NSE: CUMMINSIND)
📅 Featured in: GoalFi Alpha Blend – Market Leaders & GoalFi Momentum Trend Masters
🚀 Return Since Entry : +15.32% | +23.30%
📈 +2.38% Weekly | +5.34% MTD | +20.7% YoY Sales Growth

🏢 About the Company

Cummins India Ltd is part of the Cummins Inc. Group (USA), a global leader in power solutions. The company designs, manufactures, distributes, and services diesel and alternative-fuel engines (2.8L–100L), and high-capacity power generator sets (up to 3000 kW). Its diversified business model spans engines, power systems, components, distribution, and lubricants.

Key Segments:

1. Engine Business (~69% of revenues): Diesel & natural gas engines, remanufactured engines.

2. Power Systems: Standby & distributed power generation for infra, IT, data centers, retail, healthcare.

3. Components Business: Turbo technology, emission solutions, filtration, fuel systems.

4. Distribution Business: Network of 120+ dealerships, 5.7 lakh+ engines serviced, across India, Nepal & Bhutan.

5. Lubricants Division (~31% revenues): JV with Valvoline Cummins Pvt. Ltd.

Exports contribute ~30% of revenue with key markets in the US, UK, Mexico, Singapore, and China. Strong R&D spends (~3.7% of revenues) continue to drive innovation.

📊 Financial Performance

Quarterly Results (₹ Cr)

👉 Strong double-digit topline growth with improving margins (OPM back at 21%). Net profit rose from ₹354 Cr (Jun-23) to ₹604 Cr (Jun-25), showing sustained earnings momentum.

Annual Performance (₹ Cr)

👉 5Y CAGR: Sales +15%, Profit +22%.
👉 EPS surged from ₹25 (FY20) to ₹77 (TTM).

📈 Shareholding Pattern (Jun 2025)

• Promoters: 51.0%

• FIIs: 17.5% (steady increase since 2022)

• DIIs: 22.5% (stable, strong institutional interest)

• Public: 8.9%

The high promoter holding + strong FII inflows reflect market confidence.

✅ Pros & ❌ Cons

Pros:

• Almost debt-free, reduced leverage (Debt = ₹30 Cr only).

• Robust ROCE 36% & ROE 28%.

• Profit CAGR 22% over 5 years.

• Healthy dividend payout track record (63% last 5 years).

Cons:

• Valuations rich: P/E 52x, P/BV 14.8x.

• Other income (~₹754 Cr) forms part of earnings.

🚀 Stock Price Performance

• CMP: ₹4,030 | Market Cap: ₹1.11 Lakh Cr

• 1Y Return: +6%

• 3Y CAGR: 48%

• 5Y CAGR: 54%

Strong long-term wealth creator with compounding returns.

🔎 GoalFi View

Cummins India stands as a high-quality compounder in the capital goods & power space, benefiting from infrastructure push, data center growth, and clean energy transition. With leadership in engines & power systems, robust balance sheet, and superior return ratios, the stock remains a structural long-term play.

Stay calm, stay invested, and let compounding do the magic. ✨

📩 Reach us via chat.goalfi.app ✉ Email: [email protected]

📢 GoalFi Announcement

We’re expanding our GoalFi WhatsApp Community for our valued subscribers!

If you’re a subscriber but not yet part of the community, we’d be happy to welcome you in.

Get access to:
✔️ Daily research updates
✔️ Market insights
✔️ Live alerts
✔️ Direct analyst communication

📩 To join, simply message us at 👉 chat.goalfi.app

Let’s build smarter investing habits, together.
https://goalfiresearch.smallcase.com

We hope this update helps you stay informed and empowered in your investment journey. Feel free to reach out if you have any questions or need personalized advice.

Best Regards,
Team GoalFi

Disclosures: https://goalfiresearch.smallcase.com/#disclosures

Disclaimer: This newsletter is intended solely for educational and informational use. It does not constitute financial advice or serve as a promotional message.