Prabhudas Lilladher's research report on Cummins India
Cummins India (KKC) delivered a strong quarterly performance with revenue growing 27.2% YoY and EBITDA margin expanding by 261bps YoY to 21.9%. Management guided for double-digit FY26 growth, supported by continued strength in Powergen, while exports are expected to remain muted amid inventory correction. Powergen growth was led by strong execution of data centre orders (40% of Powergen sales) and steady traction across infrastructure, manufacturing, airports, and healthcare propelling core power gen segments (+20% YoY). Industrial performance was impacted by extended monsoons and softer mining demand, partly offset by strength in railways. Export demand remained firm in Europe and the Middle East, though near-term softness persists. Competition in the LHP has intensified, meanwhile KKC maintains leadership in HHP and remains well positioned for sustained growth, aided by strategic investments and expanding opportunities in hyperscale data centers.
Outlook
The stock is trading at a P/E of 47.0x/41.8x FY27/28E. We roll forward to Sep’27E and maintain our ‘Hold’ rating valuing the stock at a PE of 43x Sep’27E (43x Mar’27E earlier) with revised TP of Rs4,172 (TP of Rs3,895 earlier).
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