Buy Cummins India Ltd For Target Rs. 4,250 by Motilal Oswal Financial Services Ltd
* We expect revenue to grow 6% YoY on a high base of 3QFY24, which witnessed the delivery of a large data center order. Sequentially, we expect 8% overall revenue growth.
* Key monitorables include demand outlook across segments, pricing environment in Powergen, and the export trajectory.
* We expect EBITDA margin to contract ~170bp YoY as 3QFY24 margins had the impact of higher data centre volumes too. Sequentially, we expect a ~20bp expansion.
* Within segments, we expect powergen segment portfolio under transition to benefit from price hikes. We also expect exports to grow 41% YoY on a low base.
* With other players launching their CPCB 4+ products, pricing dynamics across nodes will be key monitorable.
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