Weak demand, margin pressure set to worsen for Cummins India; stock falls

New emission norms to further add to demand challenges

Weak demand and competitive pressure, both in the domestic and export markets, have been weighing on Cummins India’s performance. This has led to a 25 per cent fall in its stock over the last three months. 

In fact, the slowing pace of growth had prompted the firm — a major player in medium-to-high horsepower range of diesel engines — to cut its FY20 growth estimates. 

For its domestic business, it has guided for 8-10 per cent growth (from 10-15 per cent earlier). The export situation has worsened, leading to a guidance of 12-15 per cent decline, against the flat-to-marginal decline earlier. 

While the