Buy Cummins India; target of Rs 840: Motilal Oswal

Motilal Oswal is bullish on Cummins India and has recommended buy rating on the stock with a target of Rs 840, in its August 25, 2010 research report.

“Cummins India (CIL) is among the best performing stocks in the capital goods sector, outperforming the Sensex by 35% over the last six months and by 93% over the last one year. At the current price, stock trades at 23x FY11E and 17x FY12E earnings. Despite the run-up, we believe that the stock offers a good investment opportunity. It is due for a re-rating on account of the following:1) Strong 37% earnings CAGR over FY10-12E 2) Near-term earnings upsides due to possible margin expansion and faster-than expected growth in exports 3) Long-term export opportunity due to increasing preference by Cummins Inc for Indian manufacturing base to meet global demand for engines for non-automotive applications We recommend Buy, with a target price of Rs 840 (20x FY12E earnings, in line with other large-cap engineering companies like BHEL and L&T),” says Motilal Oswal research report.

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From: http://www.moneycontrol.com/news/recommendations/buy-cummins-india-targetrs-840-motilal-oswal_481282.html