Structural headwinds may lead to more downsides for Cummins India

Up to 45 per cent of its revenues at risk due to new draft policy

The Cummins India stock has been under pressure over the last months, shedding 12 per cent, on worries that the draft electricity Bill, which focuses on uninterrupted power supply and bringing down the use of diesel gensets (DGs), could risk about 40-45 per cent of revenues.
 
Though no impact is expected in the near term, the move to cleaner fuels/renewables will shrink the firm’s addressable market.
 
The Draft Electricity (Right of Consumers) Amendment Rules 2021 is at an early stage, but it highlights the government’s intention of reducing emissions. “In view of the increasing pollution level particularly in