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Business Standard
an hour ago
- Business
- Business Standard
Buy-on-dips a better strategy as Cummins' strong prospects seem priced in
Cummins India (Cummins) reported good results for the first quarter of 2025-26 (Q1FY26), comfortably beating consensus. Revenue growth was fuelled by growth in powergen and export business segments, with some gain in market share in powergen. Demand improvement in the powergen segment may be on the horizon with prices stabilised. Consolidated revenues increased 26 per cent year-on-year (Y-o-Y) to ₹2,910 crore. Domestic sales at ₹2,340 crore grew 25 per cent Y-o-Y (21 per cent quarter-on-quarter, or Q-o-Q), whereas export sales rose 34 per cent Y-o-Y (9 per cent Q-o-Q) to ₹520 crore. Exports have been continuously increasing since Q4FY24. Gross margin at 37 per cent contracted 80 basis points (bps) Y-o-Y (20 bps Q-o-Q) due to an increase in project business. But lower employee costs and other expenses led to Ebitda (earnings before interest, taxes, depreciation and amortisation) margin expansion of 117 bps Y-o-Y (20 bps Q-o-Q) to 21.4 per cent. Absolute Ebitda rose 33 per cent Y-o-Y (20 per cent Q-o-Q) to ₹620 crore. Adjusted profit after tax (PAT) increased 32 per cent Y-o-Y to ₹560 crore. Cummins also had an exceptional gain of ₹44 crore related to the sale of 100 per cent stake in its wholly owned subsidiary Cummins Sales & Service Private Limited (CSSPL). Reported standalone PAT was thus up 40 per cent Y-o-Y at ₹589.27 crore. At consolidated level, the exceptional gain on account of the stake sale was ₹12.6 crore, and PAT was up 31 per cent Y-o-Y at ₹604.80 crore. Powergen revenues grew 31 per cent Y-o-Y during Q1FY26. Powergen volumes are getting the benefit of a broad-based demand revival. Sequentially, powergen revenues below the 750 kilovolt-ampere (kVa) category have grown 29 per cent. Cummins appears to have gained market share in Q1FY26. In the above-750 kVa category, revenues rose 24 per cent Y-o-Y, reflecting market leadership. Data centres account for 15-20 per cent of overall powergen sales. Industrial segment growth stood at 12 per cent Y-o-Y for Q1FY26, with sub-segments, such as railways, mining, and compressors, contributing to growth while the construction growth was hit by monsoons. Growth should pick up going forward. Cummins' distribution segment revenue grew by 19 per cent Y-o-Y (23 per cent Q-o-Q) to ₹780 crore in Q1FY26, supported by penetration in powergen and railways. New products such as DF (dual fuel) kits, power management solutions, AdBlue (diesel exhaust fluid), hydraulic filters, and innovations in the railway segment are contributing. The CPCB IV+ transition has increased the technological complexity of gensets, favouring branded players with strong technical teams. CPCB IV typically refers to the Central Pollution Control Board IV emission standards for diesel generators in India. While near-term growth is driven by deeper penetration and execution, the rampup of new products could add incremental upside. Export revenues surged 34 per cent Y-o-Y in Q1FY26, with both HHP and LHP categories performing strongly. Growth was broad-based across geographies, led by Latin America and Europe. Despite geopolitical and trade policy risks, the underlying demand in key markets remains healthy, according to the management. Potential opportunities in the US, for engines like QSK38 and QSK50, offer potential additional upside. Key risks would come from lower-than-expected demand for key segments, higher commodity prices, increased competitive intensity, and lower-than-expected recovery in exports. The management's outlook is confident. Despite uncertainty around the full impact of global tax and trade policies on the economic landscape in the near- to mid-term future, the management is confident that Cummins can meet these challenges with its diversified portfolio of products that conform to evolving emission norms, access to the latest technology, trusted brand, advanced manufacturing capabilities, good distribution and service network, and cost management. The management remains cautiously optimistic in the near term and sees a very positive outlook for sustained long-term growth. Cummins' Q1FY26 outperformance was driven by demand from markets like data centres and mission critical applications. Exports also witnessed robust growth. The management reiterates double-digit growth target for FY26. It also believes pricing across various nodes has stabilised and that market leadership should translate into more gains. According to Bloomberg, 11 of the 17 analysts polled post-Q1FY26 are bullish while three each are either neutral or bearish. Their average one-year target price is ₹4,047.59 for the stock, which closed at ₹3,756 on the BSE on Tuesday, registering a gain of 2 per cent over three sessions after the results were announced last Thursday evening.
Time of India
6 days ago
- Business
- Time of India
Centre flags misuse of agriculture urea in AP
Vijayawada: The Union Govt has raised serious concerns over the rising use of agriculture-grade urea in several states, including Andhra Pradesh, amid suspicions of diversion for non-agricultural and industrial purposes. Responding to directives from the Union agriculture secretary and cabinet secretary, the Andhra Pradesh agriculture department is preparing to issue strict guidelines to curb misuse. Director of agriculture Dilli Rao said the Centre observed a sharp increase in urea usage during the current Kharif season — 3.88 lakh metric tonnes compared to 3 lakh metric tonnes last year — an excess of 88,000 metric tonnes. Urea, intended solely for crop cultivation, is reportedly being diverted for use in industries such as plywood, varnish, paint, AdBlue solution, beer, illicit liquor manufacturing, aquaculture, poultry and animal feed. Some of it is allegedly smuggled across borders into neighbouring states. In Andhra Pradesh, several districts — including NTR, Eluru, Palnadu, Kurnool, Anantapur, Sri Sathya Sai, Chittoor, Tirupati, ASR, Manyam, Visakhapatnam, and Srikakulam — share borders with Telangana, Karnataka, Tamil Nadu, Odisha, and Chhattisgarh, raising the risk of cross-border transportation. A high-level meeting, led by the chief secretary, will soon finalise enforcement strategies. Coordination with the transport department is also being planned to monitor movement across state lines. Dilli Rao added that district-level meetings will follow, involving district collectors, joint collectors and industrial stakeholders. Sales data will be scrutinised to identify unusual buying patterns.
Economic Times
02-07-2025
- Automotive
- Economic Times
Gabriel India shares surge 44% in 2 days, hit 52-week high on restructuring plan
Shares of Gabriel India surged 20% on Wednesday to hit a fresh 52-week high of Rs 1,011.45 on the BSE, extending their two-day rally to 44% as investors cheered the company's recently announced strategic restructuring plan. ADVERTISEMENT The rally, which began on Tuesday, July 1, was triggered by Gabriel India's announcement of a composite scheme of arrangement approved by its Board of Directors on June 30. Under the scheme, Gabriel will consolidate key group operations by absorbing the automotive business undertaking of Asia Investments Private Limited (AIPL), including its subsidiary Anchemco India Private Limited. The acquired business spans product lines such as brake fluids, radiator coolants, diesel exhaust fluid (DEF or AdBlue), and PU/PVC-based adhesives. The deal also brings under Gabriel's fold AIPL's strategic investments in Dana Anand India Private Limited, Henkel ANAND India Private Limited, and ANAND CY Myutec Automotive Pvt Ltd. To facilitate the merger, Gabriel will issue 1,158 equity shares of Re 1 each for every 1,000 equity shares of Rs 10 each held in AIPL by its Tuesday, the stock had already surged 20% to Rs 842.75 in early trade, rising sharply from its previous close of Rs 668.70. ADVERTISEMENT Since then, buying interest has intensified. With Wednesday's gains, Gabriel India's share price has now climbed 110.4% over the past year, risen 101.8% in the last six months, jumped 70.7% in the past three months, and added 53.6% over the last month a technical perspective, Gabriel India remains in strong uptrend territory. The stock is trading above all key short-term and long-term moving averages, including the 5, 10, 20, 30, 50, 100, 150, and 200-day SMAs, signaling entrenched bullish momentum. ADVERTISEMENT However, some caution may be warranted. The 14-day Relative Strength Index (RSI) stands at 84, significantly above the threshold of 80, indicating the stock is now in overbought territory and may be due for a current levels, Gabriel India trades at a price-to-earnings ratio of 41.18 and a price-to-book ratio of 8.53, reflecting elevated investor expectations and strong sentiment following the restructuring plan. ADVERTISEMENT Also read | Gabriel India share price surges 20%, hits 52-week high on strategic restructuring plan (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
02-07-2025
- Automotive
- Time of India
Gabriel India shares surge 44% in 2 days, hit 52-week high on restructuring plan
Shares of Gabriel India surged 20% on Wednesday to hit a fresh 52-week high of Rs 1,011.45 on the BSE, extending their two-day rally to 44% as investors cheered the company's recently announced strategic restructuring plan. The rally, which began on Tuesday, July 1, was triggered by Gabriel India's announcement of a composite scheme of arrangement approved by its Board of Directors on June 30. Under the scheme, Gabriel will consolidate key group operations by absorbing the automotive business undertaking of Asia Investments Private Limited (AIPL), including its subsidiary Anchemco India Private Limited. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like My Doctor Told Me To Take A Spoonful Of This Every Morning. (The Results Were Crazy) Gundry MD Learn More Undo The acquired business spans product lines such as brake fluids, radiator coolants, diesel exhaust fluid (DEF or AdBlue), and PU/PVC-based adhesives. The deal also brings under Gabriel's fold AIPL's strategic investments in Dana Anand India Private Limited, Henkel ANAND India Private Limited, and ANAND CY Myutec Automotive Pvt Ltd. To facilitate the merger, Gabriel will issue 1,158 equity shares of Re 1 each for every 1,000 equity shares of Rs 10 each held in AIPL by its shareholders. Stock on a tear Live Events On Tuesday, the stock had already surged 20% to Rs 842.75 in early trade, rising sharply from its previous close of Rs 668.70. Since then, buying interest has intensified. With Wednesday's gains, Gabriel India's share price has now climbed 110.4% over the past year, risen 101.8% in the last six months, jumped 70.7% in the past three months, and added 53.6% over the last month alone. Technical indicators flash overbought From a technical perspective, Gabriel India remains in strong uptrend territory. The stock is trading above all key short-term and long-term moving averages, including the 5, 10, 20, 30, 50, 100, 150, and 200-day SMAs, signaling entrenched bullish momentum. However, some caution may be warranted. The 14-day Relative Strength Index (RSI) stands at 84, significantly above the threshold of 80, indicating the stock is now in overbought territory and may be due for a pullback. At current levels, Gabriel India trades at a price-to-earnings ratio of 41.18 and a price-to-book ratio of 8.53, reflecting elevated investor expectations and strong sentiment following the restructuring plan. Also read | Gabriel India share price surges 20%, hits 52-week high on strategic restructuring plan ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Business Standard
01-07-2025
- Automotive
- Business Standard
Gabriel India soars after announcing strategic business restructuring scheme
Gabriel India hit an upper limit of 20% at Rs 842.90 after the company's board approved a comprehensive restructuring scheme aimed at transforming the company into a diversified mobility solutions provider. The plan involves the amalgamation of Anchemco India Private Limited into Asia Investments Private Limited (AIPL), followed by the demerger of AIPL's automotive business into Gabriel India. As part of the transaction, Gabriel India will issue 1,158 equity shares of Rs 1 each for every 1,000 equity shares of Rs 10 each held in AIPL. The transaction qualifies as a related party arrangement and is being executed on an arms length basis. The proposed composite scheme of arrangement is expected to take 10 to 12 months for completion, assuming timely approvals. The transaction includes the manufacturing operations of Anchemco, which produces brake fluids, radiator coolants, diesel exhaust fluid (DEF), AdBlue, and PU/PVC-based adhesives. The scheme will also bring AIPLs strategic investments in Dana Anand India, Henkel ANAND India, and ANAND CY Myutec Automotive under Gabriel India. According to the filing, this move is designed to streamline the group structure, eliminate intra-group transactions, enhance operational efficiency, and reposition Gabriel India as a diversified and technology-driven mobility solutions provider. The integration is expected to support expansion into new product segments, geographies, and the aftermarket and railway categories. The shareholding structure of Gabriel India will shift post-merger, with promoter shareholding increasing from 55% to 63.53%, while public shareholding will decline from 45% to 36.47%. The equity shares issued under the scheme will be listed on both BSE and NSE. The completion of the transaction is subject to necessary approvals from shareholders, creditors, regulatory authorities, and the National Company Law Tribunal (NCLT). The company expects the process to conclude within 10 to 12 months, assuming timely clearances. Anjali Singh, chairperson of Gabriel India, said: "This Scheme of Arrangement is in line with our Groups strategy towards re-aligning the corporate structure, which will result in its improved competitive position and Gabriel India will play a pivotal role. We see Gabriel India as ANAND Groups vehicle for future growth with its ability to provide a platform to capture the value creation for all its shareholders. At a Group level, we have set ourselves a revenue target of Rs. 50,000 crores by 2030 and we see Gabriel India leading the way." Atul Jaggi, managing director of Gabriel India, added: "Gabriel India had traditionally been a single product company within suspension parts and shock absorbers as its key product portfolio. In 2023, we added Sunroof business as a first step towards our strategic intent to be a multi-product company. Now, with these strategic initiatives we shall have a presence in manufacturing and sale of multiple products such as brake fluid, radiator coolants, diesel exhaust fluid (DEF) / Ad-blue for 2W, 3W, 4W and truck applications and PU/ PVC based adhesives. Additionally, with equity holdings in Dana Anand, Henkel ANAND and ANAND CY Myutec Automotive, Gabriel participates in drivetrain products including transmissions for EVs, Body- In-White and NVH products and solutions, as well as automotive synchronizer rings and aluminum forgings. This will strengthen Gabriels positioning as a preferred partner for global OEMs and expands its aftermarket presence." Gabriel India is one of India's most trusted names in automotive component manufacturing. It has evolved as a market leader in ride control products, including shock absorbers, struts, and front forks, serving every major automotive segment - two and three-wheelers, passenger cars, commercial vehicles, and railways. On a consolidated basis, net profit of Gabriel India rose 31.24% to Rs 64.36 crore while net sales rose 17.03% to Rs 1073.15 crore in Q4 March 2025 over Q4 March 2024.
