Cummins India Q2 Review: IDBI Capital Downgrades To ‘Hold’ As Valuations Catch Up With Growth

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IDBI Capital Report

Cummins India Ltd. delivered robust performance in Q2 FY26 which surpassed our estimates. Revenue, Ebitda and PAT for the quarter was higher by 26%, 44% and 39% YoY on consolidated basis.

Demand continues to be healthy emanating from verticals such as Quick Commerce, Mission Critical Infrastructure, Real Estate and Data Centres for the PowerGen segment.

Cummins also clocked in healthy gross margin of ~37% for the quarter. This is a result of the management’s assiduous efforts in reducing direct material costs, optimizing product mix and suitable pricing.

Guidance is of double digit revenue growth in FY26 with the strong domestic infrastructure momentum spurring growth.

We revise our rating on the stock from Buy to Hold with unchanged target price of Rs 4,401 as we believe valuations have caught up with growth prospects.

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