Buy Cummins India; target of Rs 4060: Motilal Oswal

buy

Motilal Oswal's research report on Cummins India

Cummins India (KKC)’s 4QFY25 results reflected weakness in revenue, while EBITDA margin and PAT outperformed our estimates. The company reported 6% YoY revenue growth, while EBITDA/PAT declined by 5%/7% YoY, mainly due to a high base of last year. For FY25, industrial, distribution and export segments’ growth was broadly in line with our estimates, while powergen was slightly lower than our expectations. Export markets have been consistently improving QoQ for the last four quarters. We remain positive on KKC as we believe that the company will benefit from 1) better volumes for CPCB 4+ products in FY26 as powergen demand recovers further; 2) improved growth in railways, construction in industrial and increased penetration of distribution-led products; and 3) improving growth outlook in export markets.

Outlook

We marginally trim our estimates by 1% each for FY26/27 to bake in FY25 performance. We reiterate BUY on the stock with a TP of INR4,060 based on 41x Mar’27E earnings.

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Cummins India - 30052025 - moti