Prabhudas Lilladher's research report on Cummins India
We revise our FY26/27 EPS estimates by -1.2%/-2.1% given the cautious export outlook amid tariff and geopolitical uncertainties. Cummins India (KKC) reported a revenue growth of 6.4% YoY, while EBITDA margin shrunk by 235bps YoY to 21.2% against a high base. The pre-buy of CPCB IV+ compliant gensets in base quarter saw a YoY decline in powergen segment. While volumes and pricing of CPCB IV+ products are expected to stabilize over the next few quarters, powergen continues to benefit from strong demand across end industries, including emerging opportunities in power backup for quick commerce. Meanwhile, the Industrial segment growth is being driven by traction in Railways & construction while cyclicality of compressors and shifts towards private miners warrant a cautious stance on the compressor and mining sectors. On the export front, Europe and Latin America remain the primary growth drivers while tariff related and geopolitical uncertainties muddle the water. Management guided for double-digit growth in FY26 with sustained margins aided by cost saving initiatives.
Outlook
We roll forward to Mar’27E and maintain ‘Buy’ rating with a revised TP of Rs3,646 (Rs3,309 earlier), valuing the company at a PE of 42x Mar’27E (40x Sep’26E earlier).
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