Cummins India
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Cummins India is navigating a complex landscape characterized by robust domestic demand, particularly in the power generation segment driven by data centers, which is expected to contribute significantly to revenue growth. Management's positive outlook is supported by a projected 19% CAGR in the powergen segment, although they acknowledge challenges from rising input costs and supply chain bottlenecks that are pressuring margins. The company's strategic focus on expanding capacity for high-horsepower products and leveraging its distribution network is crucial for capturing long-term service revenue. Vista's financial outlook reflects stable revenue growth, albeit with anticipated margin pressures, aligning with management's cautious optimism. The current valuation appears fair, with an expected upside of approximately 18%, supported by strong domestic demand and strategic initiatives. However, potential headwinds include raw material price volatility and competitive pressures in the industrial segment. Over the next 12-24 months, Cummins India must navigate these challenges while capitalizing on growth opportunities in the data center and power generation markets to sustain its competitive position
Why We Like This Stock
- Strong domestic demand in the power generation segment, particularly from data centers, is expected to drive revenue growth
- Management's strategic focus on expanding capacity and leveraging distribution networks supports long-term service revenue potential
- The projected 19% CAGR in the powergen segment indicates robust growth opportunities aligned with market trends
Things To Watch Out For
- Rising input costs and supply chain bottlenecks are exerting pressure on margins, potentially impacting profitability
- Geopolitical uncertainties and raw material price volatility pose risks to export performance and cost structures
- Competitive pressures in the industrial segment may challenge the company's ability to maintain market share and pricing power
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 9,000 | 10,391 | 12,143 | 13,073 | 14,866 |
| Profit Before Tax (Cr.) | 2,205 | 2,587 | 3,168 | 3,216 | 3,771 |
| PBT Margin | 24.5% | 24.9% | 26.1% | 24.6% | 25.4% |
| Net Profit (Cr.) | 1,694 | 1,990 | 2,441 | 2,495 | 2,925 |
| Earnings Per Share | 61.1 | 71.8 | 88.1 | 90.0 | 105.5 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Motilal Oswal | ▲ Buy | 6,400 | 25-Aug-2026 |
| Macguire | ▲ Outperform | 6,150 | 10-Aug-2026 |
| Axis Securities | ▼ Sell | 5,630 | 07-Aug-2026 |
| Jeffries | ▲ Buy | 6,700 | 07-Aug-2026 |
| Prabhudas Liladhar | ► Hold | 5,323 | 07-Aug-2026 |
| Citigroup | ▲ Buy | 6,700 | 06-Aug-2026 |
| HSBC | ▲ Buy | 6,500 | 06-Aug-2026 |
| JPMorgan | ► Neutral | 5,882 | 06-Aug-2026 |
| Nomura | ► Neutral | 6,000 | 06-Aug-2026 |
| Kotak Securities | ▼ Sell | 5,700 | 13-Jul-2026 |
| Moneycontrol | ▼ Underweight | nan | 02-Jun-2026 |
| Goldman Sachs | ▼ Reduce | 3,980 | 01-Jun-2026 |
| HDFC Securities | ▲ Buy | 7,096 | 01-Jun-2026 |
| UBS | ▼ Reduce | 5,500 | 01-Jun-2026 |
| IDBI Capital | ▼ Reduce | 5,046 | 29-May-2026 |
| Geojit Financials | ▲ Buy | 6,160 | 07-May-2026 |
Company Overview
Show Company Profile
Cummins India Limited engages in the design, manufacture, distribution, and service of engines, generator sets, and related technologies in India, Nepal, and Bhutan. The company operates through two segments, Engines and Lubes. It provides accelera, G-drive, fire pump drive, hydrogen, and natural gas and browse engines; and generators and power systems, including integrated power systems, alternators, transfer switches, generator set controls, system level controls and switchgears, remote monitoring, and browse generators. The company also offers engine components, such as fuel systems, turbochargers, and engine braking and valvetrain technologies; and aftertreatment emission solutions, as well as operates component care centers. In addition, it offers drivetrain and braking systems comprising axles, brakes, carriers, drivelines, gearboxes and power take-offs, tire inflation system, precision forged gears, suspensions, transfer cases, trailer solutions, and transmissions; parts and sales and services; software and electronic products; and digital products. The company serves Data Centers, Healthcare, Hospitality, Infrastructure, Realty, Manufacturing, and water treatment industries, as well as end users, original equipment manufacturers, channel partners, dealers, and retailers. It exports to the United States, Europe, Mexico, Africa, the Middle East, and China. The company was incorporated in 1962 and is headquartered in Pune, India. Cummins India Limited is a subsidiary of Cummins Inc.