On Friday, Cummins India was under pressure. The Power Ministry has sought comments on the new draft norms, where suggestions were made that consumers will be encouraged to move from diesel generators onto more renewable sources of energy. That is the reason why there has been a sharp decline in the stock.
However, this morning, a lot of brokerages are addressing that these concerns are overstated.
Macquarie has an underperform rating with a target price of around Rs 620. The firm suggests that the stock has overreacted and the demand impact would be limited.
Kotak Institutional Equities has a target price of Rs 1,080 on Cummins India and they do not see any rationale in a big change in demand for diesel generators in India and they also don’t see a big case for a shift towards greener fuels, at least in the near-term.
Though Jefferies are a bit circumspect when it comes to these norms, they say that at least in the near-term, there is no negative outlook. There could be a little bit of negative repercussions in the mid-term but for now, on the whole, it is certainly an overreaction as far as Cummins India is concerned.
Watch the accompanying video of CNBC-TV18’s Agam Vakil for more details.
(Edited by : Dipika Ghosh)
First Published: Oct 4, 2021 10:25 AM IST
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