Shares of Cummins India are higher in early trade on February 5 after parent Cummins Inc projected a double-digit revenue growth in India for 2024, riding on strong domestic demand for power generation.
The parent reported fourth quarter results that were above estimate, powered by a rise in power demand from data centers of big tech majors, helping post strong sales growth. However, Cummins Inc said it sees the annual sales falling, as North American heavy-duty truck segment still is sluggish.
"In India, we project total revenue, including joint venture to increase 10% in 2024, primarily driven by stronger power generation demand," said Cummins Inc chairman and CEO, Jennifer Rumsey.
Cummins said it plans to invest more India, along other geographies, to ramp up capacity to meet the power generation demand. " In order to further raise our capacity to meet rising power generation demand, we also intend to invest $200 million across our U.S., England and India manufacturing sites," said the CEO.
"we're currently in the midst of a $200 million investment across our plants in Seymour and Minnesota, U.K., and India to ramp up capacity to meet what is a growing demand for power generation products. And so you're seeing in that guide an expectation that we have been able to take up capacity," Cummins Inc added.
For its India heavy and medium truck business, Cummins has projected a wide range of demand for 2025, from down 5% to up 5%.
The race for artificial intelligence among big tech giants has been a key driver for power demand for Cummins, leading to a revenue growth projection of 5-15% for the company in the global power generation market.
India's per capita electricity consumption has surged to 1,395 kWh in 2023-24, marking a 45.8% rise compared to 2013-14. India’s total installed power generation capacity has surged to 457 GW as of November 2024, according to government data.
Shares of Cummins India are higher by over 2% on February 5, but are down nearly 10% so far this year. Over the last one year, Cummins India shares are higher by 24%. The company has a market capitalization of over Rs 81,000 crore.
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