1 week ago
Cummins India Buy Rating Retained as Data Centre Demand Grows
A broker believes Cummins India can grow strongly because data centres need high-power generators.
Other parts of the business may grow more slowly.
Construction-related demand is weak, but railways, mining, defence and marine projects may help the industrial business.
The company also expects support from its installed base and customized products.
Europe and Asia-Pacific are expected to help exports, although West Asian markets are weak.
Profit margins fell somewhat in the first quarter because materials became more expensive and costs increased.
The broker expects margins to improve toward 21% in later years.
It kept a Buy recommendation but lowered the target price to ₹6,400.
A management meeting indicated that data-centre demand is supporting high-horsepower genset growth.
Non-high-horsepower segments are expected to grow more slowly, while construction remains weak.
Cummins India may need further price increases because raw-material prices remain volatile.
The broker expects FY26-29 revenue, EBITDA and PAT CAGRs of 18%, 18% and 19%, respectively.
The Buy rating was retained, but the target price was reduced to ₹6,400 from ₹6,500.
- Who
- Cummins India and the brokerage issuing the report.
- What
- The brokerage retained a Buy rating on Cummins India and revised its target price to ₹6,400 from ₹6,500.
- Where
- Growth is expected from data centres, railways, mining, defence, marine markets, and exports to Europe and Asia-Pacific; West Asian markets are described as weak.
- When
- The report was published on August 25, 2026; its forecasts cover FY27-FY29.
- Why
- Data-centre demand is supporting high-horsepower gensets, while other expected drivers include customized offerings, a larger installed base and selected industrial and export markets.
Key facts
- Recommendation
- Buy
- Target price
- ₹6,400, reduced from ₹6,500
- Current market price
- ₹5,230
- Expected FY26-FY29 revenue CAGR
- 18%
- Expected FY26-FY29 EBITDA CAGR
- 18%
- Expected FY26-FY29 PAT CAGR
- 19%
- Expected EBITDA margins
- 19.8% in FY27, 21.3% in FY28 and 21.5% in FY29
- Key risks
- Weaker segment demand, higher commodity prices, stronger competition and weaker-than-expected export recovery
Sources
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