Did you see it coming for Cummins India Ltd? 10.64 % return in one trading session.
If you are an investor and had Cummins India Ltd in your portfolio, you would be all smiles now. The stock opened 10 % higher at 730 from yesterday’s close of 673.30. Profit booking commenced during the last hour with the stock touching intraday high of 769.4 and finally closing 3% lower thereon at 746.85. More than 3 million shares were traded which were 10X its 10-day average. The gains are attributed to Cummins India’s robust Q2 earnings.
Cummins India (CIL) is the leading manufacturer of diesel engines used in generators in India. Cummins India’s quarterly result strongly beat estimated numbers. Revenue at Rs 1,487 Cr witnessed a strong growth of 29 % year-on-year while net profit surged 38.4 % to Rs 211.5 Cr. The healthy growth in sales was due to strong demand across all their three markets — Industrial, Powergen and Distribution.
CIL is well placed to capture the broad revival in industrial and infrastructure capex in India, with its best-in-class product portfolio, wide distribution reach, and technological leadership. The company is confident on the future outlook as demand remains positive, arising from sustained investments by the government in creating infrastructure for the Indian economy. Deutsche Bank has a price target of Rs 880 and a buy rating on the stock. We too recommend buying CIL and adding on dips for a mid to long-term holding.
Tata Motors posted their numbers after the market closed for today. The company reported a net loss of Rs 1,049 Cr for Q2 as its luxury unit Jaguar Land Rover struggled in China. Shares of Tata Motors have dropped more than 60 % so far this year, compared to a 26.6 % fall in the NSE Nifty Auto Index.
“To weather this volatile external scenario, we have launched a comprehensive turnaround plan to significantly improve our free cash flows and profitability. The leadership team at JLR is in mission mode to achieve the deliverables under this plan” says N Chandrasekaran, Chairman, Tata Sons. It is to see how market participants react to their Q2 numbers in tomorrows trading session.
Markets were off to a wobbly start in the morning with investors reacting nervously as reports emerged that the government had begun talks under Section 7 of the RBI Act. However, a statement by the government later eased tensions of market participants. Nifty bounced back and closed up 1.85 % higher at 10,386.60.
Will Urjit Patel meet the same fate as Raghuram Rajan?
