31 October 2020
2QFY21 Results Update | Sector: Capital Goods
Cummins India
Estimate change
TP change
Rating change
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Financials & Valuations (INR b)
Y/E Mar
2020 2021E
Sales
51.6
43.9
EBITDA
5.9
5.4
PAT
6.4
5.1
EBITDA (%)
11.4
12.3
EPS (INR)
23.3
18.3
EPS Gr. (%)
(10.8) (21.3)
BV/Sh. (INR)
150.6
158.8
Ratios
Net D/E
0.0
(0.0)
RoE (%)
15.4
11.5
RoCE (%)
14.0
10.5
Payout (%)
90.3
57.2
Valuations
P/E (x)
18.7
23.7
P/BV (x)
2.9
2.7
EV/EBITDA (x)
20.6
21.8
Div Yield (%)
3.8
2.0
FCF Yield (%)
3.0
2.5
KKC IN
277
120.3 / 1.7
653 / 282
-7/-3/-20
568
CMP: INR434
TP: INR336 (-23%)
Sell
Margin surprise on favorable sales mix; Outlook weak
Further lockdown in Europe and LATAM pose risk to exports
2022E
52.9
6.8
6.2
12.9
22.4
22.3
165.1
(0.0)
13.6
12.4
72.0
19.4
2.6
17.5
3.0
0.8
While Cummins (KKC) reported in-line revenue, EBITDA came in 25% higher
than our estimates. This was largely owing to favorable mix (higher
contribution of distribution segment and export revenue), continued cost
rationalization measures, and cut in employee wages. Further, cost
reduction was aided by the reduction in warranty and royalty expenses.
As sales normalize and lower margin domestic product sales pick up, gross
margin is likely to reverse to historical levels. Also, KKC had reduced
employee wages by 10-20% during the lockdown owing to decline in
demand and volumes. However, with gradual recovery in volumes, these
costs are expected to be reversed. Moreover, warranty provisions will also
come back along with products sales, thereby making current margin levels
unsustainable.
CPCB4+ led export opportunity remains a key positive for KKC. However, with
the likely deferment of implementation by 9-12 months implies that any
benefits from this opportunity would accrue only from FY23E. We increase our
FY21 EPS estimates by 8%, but maintain our FY22/22E estimates with TP of
INR336. Maintain
Sell.
Revenue declined 11% YoY to INR11.6b and was in line with expectations.
EBITDA grew 9.8% YoY to INR1.7b and was
25% ahead of expectations.
EBITDA margin surprised positively and jumped to 14.4% (v/s our expectations
of 11.4%). Other income declined 37% YoY to INR580m and was below
expectations. Adj. PAT declined 21% YoY to INR1.5b and was
14% ahead of
our expectations.
Domestic sales declined 22% YoY to INR7.43b – Powergen was down 35%
YoY, Industrial was down 21% YoY, while distribution was down just 4% YoY.
Export sales increased 18% YoY to INR3.98b, helped by pent-up demand.
Gross margin was up owing to lower sales of low-margin products like LHP,
Powergen, and industrial sales from construction sector. Sales mix was
favorable as products sales are yet to recover in the domestic market,
thereby leading to gross margin expansion.
Telecom is one of the segments where growth outlook is positive on the
exports side with investment in 5G across most Asian countries. Middle East
remains weak with lower oil prices, while large countries in Africa (South
Africa and Nigeria) continue to face slowdown. Management is cautiously
optimistic with global lockdowns coming into effect again.
We largely maintain our FY22/FY23E estimates and our TP of INR336 (15x
Mar’22E EPS). Other income (largely driven by dividend and rental income),
constituted 43% of PBT in FY20 and supported the company’s overall RoE.
Adj. for the same, RoE declined to 8.9% in FY20 from reported 15.4%,
indicating pain in the core business. Maintain
Sell.
Pent-up demand aids export revenues
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Sep-20 Jun-20
51.0
51.0
29.3
28.9
8.2
8.6
11.5
11.6
Sep-19
51.0
30.1
8.3
10.6
Key management call highlights
FII Includes depository receipts
Valuation and view
Nilesh Bhaiya – Research Analyst
(Nilesh.Bhaiya@MotilalOswal.com)
Pratik Singh – Research Analyst
(Pratik.Singh@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Cummins India
Quarterly Performance
Y/E March
Sales
Change (%)
EBITDA
Change (%)
As of % Sales
Depreciation
Interest
Other Income
PBT
Tax
Effective Tax Rate (%)
Adjusted PAT
Change (%)
Extra-ordinary Income (net)
Reported PAT
Change (%)
1Q
13,430
1.1
1,514
-29.5
11.3
291
52
769
1,940
525
27.1
1,415
(22.7)
-
1,415
(22.7)
(INR M)
FY20
2Q
3Q
4Q
13,084 14,534 10,528
-12.0
-3.3
-21.5
1,525 2,158
667
-39.2
-4.8
-61.2
11.7
14.8
6.3
293
296
308
55
47
49
926
723
898
2,102 2,538 1,208
269
551
-5
12.8
21.7
(0.4)
1,833 1,988 1,213
(13.4)
6.2 (13.9)
-
(125)
(30)
1,833 1,862 1,183
(13.4)
(0.5) (16.0)
1Q
4,982
-62.9
29
-98.1
0.6
303
43
666
349
72
20.7
277
(80.4)
249
526
(62.9)
FY21E
FY20 FY21E MOFSL
2Q
3Q
4Q
2QE
11,602 14,534 12,747 51,577 43,865 11,776
-11.3
0.0
21.1
-8.9 -15.0 -10.0
1,674 2,138 1,573 5,863 5,415 1,341
9.8
-0.9 136.0 -20.2 -30.1 -12.1
14.4
14.7
12.3
11.4
12.3 11.4
327
325
323 1,187 1,278 310
40
50
67
203
200
50
580
600
726 3,315 2,571 650
1,887 2,363 1,909 7,789 6,508 1,631
431
520
408 1,341 1,432 359
22.9
22.0
21.4
17.2
22.0 22.0
1,456 1,843 1,501 6,448 5,076 1,272
(20.6)
(7.3)
23.7 (10.8) (21.3) (30.6)
-
-
- (155)
249
-
1,456 1,843 1,501 6,293 5,325 1,272
(20.6)
(1.0)
26.8 (12.9) (15.4) (30.6)
Var.
(%)
-1.5%
24.9%
15.7%
14.4%
14.4%
Exhibit 1: Domestic revenue declined 21% YoY in 2QFY21
Domestic revenue (YoY)
36%
12%
-8%
3% 0%
-5%
15%
22%
15%
-6%
Exhibit 2: Exports increased 18% YoY in 2QFY21
Exports revenue (YoY)
30%
13%
21%
5%
18%
3%
-6%
-23%
-21%
-17%
-7%
-16%-20%
-17%
-26%-25%
-61%
-64%
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 3: Overall revenue declined 11% in 2QFY21
Revenue (YoY)
30%
7%
-11%
0%
4%
-1%
14% 11%
4%
-10%
-3%
-21%
-11%
Exhibit 4: EBITDA margin increased owing to favorable
revenue mix and sustained cost control measures
EBITDA margin
16.2 16.9
15.1
14.8
14.6 14.5 14.5 14.0
12.8
11.3 11.7
6.3
0.6
-63%
14.4
Source: Company, MOFSL
Source: Company, MOFSL
31 October 2020
2
 Motilal Oswal Financial Services
Cummins India
Story in charts
Exhibit 5: FY20 revenue break-up
Exports,
26%
Power gen,
29%
Exhibit 6: Overall revenue expected at 4.5% CAGR over
FY20-23E
Revenue (INR b)
YoY Growth (%)
Distribution
, 26%
Industrial,
19%
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 7: Domestic segment to post ~4% CAGR over FY20-
23E
Domestic (INR b)
YoY (%)
Exhibit 8: Exports expected at ~6% CAGR over FY20-23E
Export (INR b)
YoY (%)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 9: EBITDA expected at 10.5% CAGR over FY20-22E…
31.7
11.3
19.8
-8.7
5.5 5.4 3.4
-16.5
-8.7
-32.2
-7.6
EBITDA (INR b)
YoY (%)
18.0
25.8
16.3
Exhibit 10: …as EBITDA margins are likely to expand owing
to cost-cutting measures and rebound in exports
EBITDA (%)
Source: Company, MOFSL
Source: Company, MOFSL
31 October 2020
3
 Motilal Oswal Financial Services
Cummins India
Exhibit 11: PAT growth expected at 3.3% CAGR over FY20-
23E
33.1
22.9
7.1
-9.5
-8.7
4.4 5.9 5.4 6.6
6.0
-4.0
-2.6
-11.2
PAT (INR b)
31.0
YoY (%)
22.3
10.8
-10.8
-21.3
6.2 7.1
5.1
28
Exhibit 12: RoE/RoIC have gradually declined over FY10-20
52
55
39
42
24
26 28
27
ROE (%)
ROIC (%)
14.6
33
23 22
23
25
22
20
15 16
7.9 7.5 7.3 6.5 7.2 6.4
16 17 15
11 10 12 13
12
14 15
Source: Company, MOFSL
Source: Company, MOFSL
Highlights from management commentary
Exports
Pent-up demand aided export growth, with management cautiously optimistic
on demand.
Next six months are expected to be very turbulent.
Over a period of 2-3 years, KKC aims to improve global market share, offer new
products and add value to its customers.
Impact of MEIS scheme withdrawal – KKC provided for INR130m in 2QFY21 on
account of withdrawal of export benefit scheme. Management believes new
incentive rules will be implemented from 1
st
Jan’21, which will help to negate
this loss.
Biggest growth in exports is led by the telecom sector related to 5G rollouts,
especially in Asia.
Europe and LATAM are witnessing a second wave of COVID cases, and hence,
management is unsure of demand from these markets in the near future.
Domestic
This segment is witnessing recovery across segments on MoM/QoQ basis.
However, management is unable to provide for FY21 guidance as yet.
Break-up of domestic revenue: Powergen declined 35% YoY and Industrial
declined 21% YoY while distribution decline was lower at 4% YoY.
Margins
Mix had positive impact of ~2.5%, while cost rationalization of raw material
yielded ~1% advantage.
Other expenses stood lower owing to reduction in royalty, warranties, etc.
Warranty expenses – If usage of product is lower, warranty costs go down. If
usage goes up, warranties will also go up.
Commodity prices are generally passed on to the customer, but in case of
substantial rise, it may prove to be a risk.
31 October 2020
4
 Motilal Oswal Financial Services
Cummins India
Valuation and view
We largely maintain our FY22/FY23E estimates and our TP of INR336 (15x
Mar’22E EPS). Other income (largely driven by dividend and rental income),
constituted 43% of PBT in FY20 and supported the company’s overall RoE. Adj.
for the same, RoE declined to 8.9% in FY20 from reported 15.4%, indicating pain
in the core business. Maintain
Sell.
Exhibit 13: Earnings change summary
Earnings Change
INR m
Revenue
EBITDA
EBITDA margin
Adj. PAT
FY21E
44,365
4,647
10.5%
4,690
Old
FY22E
52,908
6,536
12.4%
6,213
FY23E
58,779
7,588
12.9%
7,082
FY21E
43,865
5,415
12.3%
5,076
New
FY22E
52,908
6,809
12.9%
6,207
FY23E
58,829
7,919
13.5%
7,113
FY21E
-1%
17%
1.9%
8%
Change
FY22E
0%
4%
0.5%
0%
FY23E
0%
4%
0.6%
0%
Source: MOFSL, Company
31 October 2020
5
 Motilal Oswal Financial Services
Cummins India
Financials and valuations
Income Statement
Y/E March
Total Revenues
Change (%)
Raw Materials
Staff Cost
Other Expenses
EBITDA
% of Total Revenues
Depreciation
Other Income
Interest
PBT
Tax
Rate (%)
Adjusted PAT
Extra-ordinary Income
Reported PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Loans
Deferred Tax Liability
Capital Employed
Gross Fixed Assets
Less: Depreciation
Net Fixed Assets
Capital WIP
Investments
Curr. Assets
Inventory
Debtors
Cash & Bank Balance
Loans & Advances
Other Assets
Current Liab. & Prov.
Current Liabilities
Provisions
Net Current Assets
Application of Funds
2018
50,825
0.1
32,581
4,979
5,940
7,325
14.4
938
2,285
148
8,523
2,000
23.5
6,524
561
7,085
-3.6
2018
554
39,306
39,861
2,515
299
42,675
28,665
8,445
20,193
380
5,487
29,253
5,375
13,263
4,709
1,287
4,621
12,637
11,114
1,523
16,616
42,675
2019
56,590
11.3
36,135
5,458
6,356
8,641
15.3
1,103
2,928
162
10,304
3,078
29.9
7,226
0
7,226
2.0
2019
554
40,750
41,305
3,092
988
45,384
29,676
9,548
20,128
1,585
2,853
33,970
6,254
12,727
7,379
0
7,610
13,152
11,450
1,702
20,818
45,384
2020
51,577
-8.9
33,679
5,602
6,434
5,863
11.4
1,187
3,315
203
7,789
1,341
17.2
6,448
-155
6,293
-12.9
2020
554
41,195
41,750
4,854
800
47,404
30,955
8,617
22,338
800
8,240
28,163
5,729
11,316
4,538
0
6,579
12,137
9,650
2,487
16,026
47,404
2021E
43,865
-15.0
27,635
5,113
5,702
5,415
12.3
1,278
2,571
200
6,508
1,432
22.0
5,076
249
5,325
-15.4
2021E
554
43,475
44,029
4,854
800
49,683
32,955
9,895
23,059
800
8,240
27,906
4,873
10,576
6,862
0
5,596
10,322
8,207
2,115
17,583
49,683
2022E
52,908
20.6
33,861
5,624
6,614
6,809
12.9
1,378
2,726
200
7,957
1,751
22.0
6,207
0
6,207
16.6
2022E
554
45,212
45,767
4,854
800
51,421
35,955
11,273
24,681
800
8,240
30,150
5,877
11,596
5,927
0
6,749
12,450
9,899
2,551
17,700
51,421
(INR m)
2023E
58,829
11.2
37,650
5,905
7,354
7,919
13.5
1,498
2,898
200
9,119
2,006
22.0
7,113
0
7,113
14.6
(INR m)
2023E
554
47,204
47,758
4,854
800
53,412
38,955
12,772
26,183
800
8,240
32,033
6,535
12,894
5,099
0
7,504
13,843
11,006
2,837
18,189
53,412
31 October 2020
6
 Motilal Oswal Financial Services
Cummins India
Financials and valuations
Ratios
Y/E March
Basic (INR)
Adj EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation (x)
P/E
Cash P/E
EV/EBITDA
EV/Sales
Price/Book Value
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC
Turnover Ratios
Debtors (Days)
Inventory (Days)
Creditors. (Days)
Asset Turnover (x)
Leverage Ratio
Net Debt/Equity (x)
Cash Flow Statement
Y/E March
PBT before EO Items
Depreciation
Interest & other
Direct Taxes Paid
(Inc)/Dec in WC
CF from Operations
(Inc)/Dec in FA
Free Cash Flow
Investment & Others
CF from Investments
(Inc)/Dec in Debt
Interest Paid
Dividend Paid
CF from Fin. Activity
Inc/Dec of Cash
Add: Beginning Balance
Closing Balance
2018
23.5
28.9
143.8
14.0
65.5
18.4
15.0
16.1
2.3
3.0
3.2
16.4
15.6
15.7
95
39
54
1.2
-0.1
2018
9,084
938
-1,486
-1,823
-338
6,376
-905
5,472
2,677
1,773
8
-100
-4,639
-4,731
3,418
1,291
4,709
2019
26.1
30.0
149.0
16.4
78.6
16.6
14.4
13.4
2.0
2.9
3.8
17.5
16.2
15.0
82
40
53
1.2
-0.1
2019
10,304
1,103
-1,205
-2,361
-2,341
5,500
-2,734
2,766
5,103
2,369
576
-121
-5,681
-5,226
2,643
4,709
7,379
2020
23.3
27.0
150.6
16.4
90.3
18.7
16.1
20.6
2.3
2.9
3.8
15.4
14.0
11.2
80
41
49
1.1
0.0
2020
7,634
1,187
-1,366
-1,609
144
5,990
-2,366
3,624
-2,392
-4,758
1,762
-154
-5,681
-4,073
-2,841
7,379
4,538
2021E
18.3
23.8
158.8
8.8
57.2
23.7
18.2
21.8
2.7
2.7
2.0
11.5
10.5
9.3
88
41
49
0.9
0.0
2021E
6,508
1,278
-2,122
-1,432
766
4,998
-2,000
2,998
2,571
571
0
-200
-3,046
-3,246
2,323
4,538
6,862
2022E
22.4
27.4
165.1
12.9
72.0
19.4
15.9
17.5
2.3
2.6
3.0
13.6
12.4
11.4
80
41
49
1.0
0.0
2022E
7,957
1,378
-2,526
-1,751
-1,051
4,008
-3,000
1,008
2,726
-274
0
-200
-4,469
-4,669
-935
6,862
5,927
2023E
25.7
31.1
172.3
14.8
72.0
16.9
14.0
15.2
2.0
2.5
3.4
14.9
13.6
12.5
80
41
49
1.1
0.0
(INR m)
2023E
9,119
1,498
-2,698
-2,006
-1,317
4,596
-3,000
1,596
2,898
-102
0
-200
-5,121
-5,321
-828
5,927
5,099
31 October 2020
7
 Motilal Oswal Financial Services
Cummins India
NOTES
31 October 2020
8
 Motilal Oswal Financial Services
Cummins India
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within following 30
days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the Regulations,
is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of
India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details
of
associate
entities
of
Motilal
Oswal
Financial
Services
Limited
are
available
on
the
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at
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report
is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is only available to
professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction where their offer
or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First
Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising
from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of
"accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be
such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Specific Disclosures
1 MOFSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
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The associates of MOFSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
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Cummins India
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other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific
recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even though there
might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies)
discussed herein or act as an advisor or lender/borrower to such company(ies)
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider
demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from clients which are not
considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research
analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be
altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOFSL. The report is
based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from
publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made
as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not
constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated to all the customers
simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or
in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be
used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal,
accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions expressed in this
report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific recipient. This
may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations as it deems necessary to arrive at
an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures,
options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied,
is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is
provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The
Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and
the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform
or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is
already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the
views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or
published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any
locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL to any registration or
licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose
possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall be
liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not
to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses,
costs, damages,
expenses that may be suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai-
400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI:
ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration
No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond,
NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered
through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk
Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,
read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company Law
Tribunal, Mumbai Bench.
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