Cummins India's (CIL) comparable Q4FY09 net revenue and net profit reported decline of 8% and 12% respectively. After Q3FY09 results the management had indicated that net revenue and net profit are likely to fall due to recession in domestic and global markets. Export revenue (50% to total revenue) is expected to decline in FY10E while we expect improvement in domestic revenue on the back of initial positive signals and likely focus on infrastructure projects which will help construction, mining, marine, power generation segments. We estimate CIL to report EPS of Rs.19.4 for FY10E which is a 17% decline. We assign 'Reduce' rating on the stock with a target price of Rs 237.
Thermax is Indian engineering MNC providing solutions in Energy and Environment sector. In FY10, it is likely to report an EPS of Rs 27. Investors can 'BUY' at CMP for a target of Rs 460 i.e. 17 PE on FY10 estimates.Disclosure: I do not have any personal holding in these stock.