Cummins India (BOM:500480) GF Value Rank : 5 (As of Jun. 09, 2024)

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What is Cummins India GF Value Rank?

Cummins India has the GF Value Rank of 5.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of Cummins India's GF Value Rank

For the Specialty Industrial Machinery subindustry, Cummins India's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Cummins India's GF Value Rank Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Cummins India's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Cummins India's GF Value Rank falls into.

Cummins India GF Value Rank Related Terms

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Cummins India (BOM:500480) Business Description

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CUMMINSIND:India

Address

Cummins India Office Campus, Tower A, 5th Floor, Survey No. 21, Balewadi, Pune, MH, IND, 411045

Website

https://www.cumminsindia.com

Cummins India Ltd is a group of businesses that design and manufacture service engines and related technologies. The company produces fuel systems, air handling, filtration, emission solutions, and electrical power generation systems in facilities across India. It has three business units: Engine Business, Power Systems Business, and Distribution Business. Its engines power a wide range of systems, including trucks, construction equipment, military components, railways, mining, and power generation applications. In addition, Cummins India provides aftermarket support and expertise to customers in different regions. The revenue is derived from India, but the company exports products to North America, Europe, and other Asian countries.

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