CUMMINS INDIA 2023-24 Annual Report Analysis

Tue, 16 Jul

CUMMINS INDIA has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

CUMMINS INDIA Income Statement Analysis

• Operating income during the year rose 15.8% on a year-on-year (YoY) basis.
• The company's operating profit increased by 39.7% YoY during the fiscal. Operating profit margins witnessed a fall and down at 22.4% in FY24 as against 18.5% in FY23.
• Depreciation charges increased by 12.1% and finance costs increased by 68.7% YoY, respectively.
• Other income grew by 22.4% YoY.
• Net profit for the year grew by 40.1% YoY.
• Net profit margins during the year grew from 15.8% in FY23 to 19.1% in FY24.

CUMMINS INDIA Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	77,721	90,002	15.8%
Other income	Rs m	3,095	3,789	22.4%
Total Revenues	Rs m	80,816	93,791	16.1%
Gross profit	Rs m	14,401	20,123	39.7%
Depreciation	Rs m	1,420	1,592	12.1%
Interest	Rs m	162	274	68.7%
Profit before tax	Rs m	15,913	22,046	38.5%
Tax	Rs m	3,631	4,840	33.3%
Profit after tax	Rs m	12,282	17,206	40.1%
Gross profit margin	%	18.5	22.4
Effective tax rate	%	22.8	22.0
Net profit margin	%	15.8	19.1

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CUMMINS INDIA Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 21 billion as compared to Rs 19 billion in FY23, thereby witnessing an increase of 8.8%.
• Current assets rose 17% and stood at Rs 59 billion, while fixed assets rose 7% and stood at Rs 30 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 90 billion as against Rs 79 billion during FY23, thereby witnessing a growth of 13%.

CUMMINS INDIA Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	57,582	66,123	14.8
Current Liabilities	Rs m	18,904	20,569	8.8
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	79,186	89,705	13.3
Current assets	Rs m	50,973	59,395	16.5
Fixed Assets	Rs m	28,202	30,283	7.4
Total Assets	Rs m	79,186	89,705	13.3

CUMMINS INDIA Cash Flow Statement Analysis

• CUMMINS INDIA's cash flow from operating activities (CFO) during FY24 stood at Rs 13 billion, an improvement of 56.8% on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs -3 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -11 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -968 million from the Rs 2 billion net cash flows seen during FY23.

CUMMINS INDIA Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	8,197	12,853	56.8%
Cash Flow from Investing Activities	Rs m	691	-2,682	-
Cash Flow from Financing Activities	Rs m	-6,873	-11,343	-
Net Cash Flow	Rs m	2,193	-968	-

Current Valuations for CUMMINS INDIA

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 62.1, an improvement from the EPS of Rs 44.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,907.8, stands at 73.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 16.4 times, while the price to sales ratio stands at 12.0 times.
• The company's price to cash flow (P/CF) ratio stood at 33.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	280.4	324.7
TTM Earnings per share	Rs	44.3	62.1
Diluted earnings per share	Rs	44.3	62.1
Price to Cash Flow	x	33.0	33.2
TTM P/E ratio	x	44.3	73.4
Price / Book Value ratio	x	6.4	9.4
Market Cap	Rs m	368,967	624,095
Dividends per share (Unadj.)	Rs	25.0	38.0

Ratio Analysis for CUMMINS INDIA

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.9x during FY24, from 2.7x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 81.5x during FY24, from 99.0x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 26.0% during FY24, from 21.3% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 33.8% during FY24, from 27.9% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 19.5% during FY24, from 15.7% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	2.7	2.9
Debtors’ Days	Days	8	8
Interest coverage	x	99.0	81.5
Debt to equity ratio	x	0.0	0.0
Return on assets	%	15.7	19.5
Return on equity	%	21.3	26.0
Return on capital employed	%	27.9	33.8

To see how CUMMINS INDIA has performed over the last 5 years, please visit here.

CUMMINS INDIA Share Price Performance

Over the last one year, CUMMINS INDIA share price has moved up from Rs 1,917.4 to Rs 3,907.8, registering a gain of Rs 1,990.5 or around 103.8%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 74,780.5 (down 0.1%). Over the last one year it has moved up from 41,347.4 to 74,780.5, a gain of 33,433 points (up 80.9%).

Overall, the S&P BSE SENSEX is up 23.6% over the year.

(To know more, check out historical annual results for CUMMINS INDIA and quarterly results for CUMMINS INDIA)