Cummins India Limited

Cummins India reported strong financial results for the full year ended March 31, 2026, with sales reaching INR 11,950 crores, an 18% increase over the previous year. Domestic sales grew by 19% to INR 9,961 crores, while exports increased by 12% to INR 1,989 crores. Profit before tax (PBT) before exceptional items^📎 for the full year was INR 3,104 crores, up 24% YoY. For Q4 FY26, sales were INR 2,963 crores, a 23% increase YoY, with domestic sales up 30%. Q4 PBT after exceptional items^📎 showed a significant 44% QoQ increase to INR 852 crores.

The Power Generation domestic segment was a key growth driver, with sales increasing 24% YoY to INR 4,758 crores for the full year and a robust 48% YoY and 21% QoQ increase to INR 1,294 crores in Q4. The distribution business also performed well, growing 22% YoY to INR 3,278 crores for the full year, though it saw an 18% QoQ decrease in Q4. Industrial domestic business sales were marginally lower by 1% YoY for the full year at INR 1,650 crores, and decreased 18% QoQ in Q4 to INR 381 crores. Exports, particularly high horsepower, showed a 20% YoY increase for the full year but experienced a 6% YoY and 5% QoQ decline in Q4.

The data center business contributed significantly, accounting for 30-35% of the overall Power Generation domestic revenue for the full year and approximately 35% in Q4 FY26. Hyperscaler revenue in Q4 alone was INR 250 crores. Management noted a significant increase in inquiry velocity for data centers, from both Hyperscalers and Colo players, since October last year. The company emphasizes its strong value proposition for data center customers, focusing on end-to-end solutions and high localization content for key components, which helps maintain margins.

Within the industrial segment, railways showed strong and growing demand, contributing to a healthy order book. Mining also saw an uptick in order velocity and tender activity in the last six months, leading to a building order book after two years of slower activity. However, the compressor segment is expected to enter a low cycle, similar to its historical patterns. Road construction remains largely stable, with moderate orders compared to the high velocity seen a few years ago.

The company acknowledged challenges from increasing commodity prices and inflation, stating efforts to pass on these costs to the market with a slight lag. Supply constraints, including labor shortages, commodity pricing impacts, and fuel cost increments, along with geopolitical situations, continue to be monitored. Despite these pressures, management indicated that margins have not been dramatically impacted. Pricing for CPCB IV+ products has largely sustained at the higher levels, with competition primarily affecting lower-range, low-cost power products.

Cummins India has invested over INR 1,000 crores in the last five years, primarily for continuous modernization of plants and expanding line capabilities to increase output from existing installed bases. The overall capacity utilization is currently around 70%. The company does not have a major capital expenditure plan for the immediate future, preferring to continue investing in continuous capital to enhance output from its current assets. There are no identified product gaps, with focus on enhancing existing products to offer more value.

Beyond data centers, the company sees demand from manufacturing, particularly solar cell plants and pharma, as well as quick commerce (dark stores) and luxury residential/commercial realty. There is significant interest and inquiries for Battery Energy Storage Systems (BESS), though sales conversion is yet to be seen. For CPCB IV+ products coming out of warranty, the distribution business is prepared to offer comprehensive services and extended warranty schemes, aiming to encircle customers and provide sophisticated aftermarket support.