Cummins India Q4 Results Preview: Company expected to stage a strong show; margin estimated to improve by 110 bps

Cummins India, the largecap entity from the industrial machinery space, is expected to release its Q4 results together with final dividend for the FY 2023-24. Zee Business research desk expects the company to report a strong set of earnings for the March-ended quarter.

The standalone revenue from operations at the company during the reporting quarter is expected to surge 11.1 per cent on-year to Rs 2,140 crore on the back of consistent robust demand in the Powergen segment. The company posted a revenue of Rs 1,926 crore in the same period last year.

EBITDA, a metric of operational profitability, is also seen to log a significant double-digit gain of 20 per cent on a year-on-year basis (YoY) to Rs 390 crore as against Rs 326 crore during the same period last year. Furthermore, for the quarter under review, margin is estimated to scale higher by 110 bps to 18 per cent as against 16.9 per cent in the corresponding period last fiscal. Analysts expect a greater contribution from the company’s HHP line of business to aid margin expansion.

Nevertheless, the export business of the company may log 10 per cent de-growth during the review period.

Furthermore, the company’s parent Cummins Inc has continued with its earlier guidance for the India business with revenue seen edging higher by 9 per cent on the back of 
strong power generation and on-highway demand.

Key monitorables

The impact of the elections on demand and pricing discipline after the CPCB4+ implementation will be closely watched. Demand outlook across segments, particularly in powergen for CPCB 4+ products and export will also be on the radar.

Cummins India share price performance

Shares of the company have given multibagger return of 117 per cent in the last one year. Ahead of its results tomorrow, shares of the company traded weak by as much as 1 per cent at Rs 3,770.9 apiece.