CUMMINS INDIA LTD Intrinsic Value
CUMMINSIND · Capital Goods · Current price ₹4,608
Is CUMMINS INDIA LTD undervalued?
We estimate the fair value of CUMMINS INDIA LTD at ₹5,806 per share, against a market price of ₹5,070. That puts the share price about +14.5% below our estimate, at medium confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 1 method: Fair multiple (P/E) (₹5,806). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for CUMMINS INDIA LTD spans ₹5,225 to ₹6,386. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
Margin of safety
Value investors look for a margin of safety: a discount to estimated value that absorbs being wrong. At ₹5,070 against an estimated value of ₹5,806, CUMMINS INDIA LTD trades at +14.5%, i.e. a discount to our estimate. How much margin to demand depends on how much you trust the inputs, which is what the confidence band below is for.
How we got this fair value
Every number below is part of the same estimate for CUMMINS INDIA LTD. Nothing here is a target price or a forecast of where the share price will go.
Workable, with real gaps. Weigh it alongside your own view rather than on its own.
Estimate range ₹5,225 – ₹6,386
Why this method for this business
Cummins India is a capital-intensive industrial company with durable earnings power and a strong moat. A relative P/E is appropriate for its sector, while DCF captures its cash flow generation and capital allocation.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
implied value is <0.2× the price (likely a data error)
- ev_ebitda is less relevant for a capital-heavy business with stable cash flows
- relative_pe is more suitable for a company with a strong moat and predictable earnings
What was missing
- Lack of forward EBITDA estimates
- Limited analyst coverage for precise DCF modeling
What drives it
16 inputs, grouped by how strong each claim is
- Sector-median P/E
- 17×
- Peers used
- 136
- EPS (TTM)
- 85.39 ₹/share
- Own-history median P/E
- 40.14×
peer-median
peer-median
computed
reconstructed (one feature, dampened — not a cap)
- Anchor correction
- peer anchor 17.0x diverges 2.4x from 7yr own-history 40.1x (no size-comparable peer) — anchor blended 0.6 toward own-history → 30.9x
- Term: quality
- +12.7%
- Term: growth
- +40.0%
- Term: capital_allocation
- +15.0%
- Term: financial_strength
- +10.0%
- Term: history
- +9.0%
- Term: sector_rerating
- +0.0%
- Term: rate_regime
- +1.2%
- Term: risk
- +0.0%
peer-anchor mismatch — deep own-history used instead
quality 80/100 (high, stable returns) → premium
durable ~26% CAGR (ROCE 24% > hurdle) → premium
capital allocation: rising ROCE funded by strong FCF → premium
financial strength: effectively debt-free → premium
history: market paid +30% vs sector, dampened ×0.3 (one feature, not the anchor)
sector re-rating: no sector-norm history → not used
rates: risk-free 6.9% below ~7.1% normal → higher multiple
risk: no analyst-dispersion signal available → neutral (lowers confidence, not PE)
- Premium vs sector
- +120.2%
- Fair-multiple confidence
- 87%
- Fair P/E
- 67.99×
fundamentals + macro (not capped at own history)
data completeness + term agreement
sector median × ∏(1+term) — Dynamic Fair Multiple
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for CUMMINS INDIA LTD: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 14 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on CUMMINS INDIA LTD
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.