Cummins India: A value trap for investors or value buy? Analysts cautious

Likely to be effective from 2022, analysts at IIFL say Cummins India is ahead of the curve to cater to these products

The Cummins India stock has corrected 34 per cent year-to-date. Its valuation at 22x its FY21 estimated earnings is also the lowest in six years. 

For investors, it could imply two things. One, it could be that with the worst behind in terms of growth and the stock probably bottoming out, Cummins India presents a good proposition in the capital goods space. However, the question is whether one has the visibility to call out the bottom yet, with domestic growth estimated at just 3-5 per cent for FY20. 

Second, exports remain on a weak footing, the recovery of which appears