The Cummins India Limited (NSE:CUMMINSIND) First-Quarter Results Are Out And Analysts Have Published New Forecasts
Last week saw the newest quarterly earnings release from Cummins India Limited (NSE:CUMMINSIND), an important milestone in the company's journey to build a stronger business. It was a workmanlike result, with revenues of ₹34b coming in 4.5% ahead of expectations, and statutory earnings per share of ₹85.20, in line with analyst appraisals. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Cummins India's 16 analysts is for revenues of ₹141.6b in 2027. This would reflect a notable 12% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 8.9% to ₹93.01. Before this earnings report, the analysts had been forecasting revenues of ₹142.4b and earnings per share (EPS) of ₹101 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Check out our latest analysis for Cummins India
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹5,759, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Cummins India at ₹7,108 per share, while the most bearish prices it at ₹3,504. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 16% growth on an annualised basis. That is in line with its 17% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 13% per year. So it's pretty clear that Cummins India is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Cummins India. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Cummins India analysts - going out to 2029, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Cummins India that we have uncovered.
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