- Cummins India reported a 21.9% EBITDA margin in Q2FY26 and aims to sustain it in FY26 and FY27
- Margins depend on product mix, cost reduction efforts, and volume levels in domestic and export segments
- Government infrastructure spending could drive double-digit growth in Cummins India's industrial segment
Engine and power solutions giant Cummins India reported Ebitda margin of 21.9% in Q2FY26 and aims to maintain a similar margin in FY26 and FY27, according to Shveta Arya, Managing Director (MD), Cummins India. However, she explained that sustaining such margins depends on several factors.
On being asked if margins in the 21-22% range are sustainable and what the margin outlook for FY26 and FY27 is, she told NDTV Profit, “If the volumes continue at this level, then we could sustain the margins. Definitely, how exports come in, how different segments play in the domestic segment, leading to what product mixes, those can change our margin profile. Our endeavour is always to maintain this kind of margin profile.”
Arya explained that margins are contingent on the product mix and cost reduction efforts.
“Margin is a function of product mix and some cost reduction efforts that we do. The product mix is really dependent on the orders that get built up. So very difficult to predict and can change from quarter to quarter.”
“Cost reduction efforts for us have been going on for a while and they really help us uh improve our margin profiles, which will continue. Then, in this particular quarter, we did see volumes helping us, there was leverage that we could take advantage of,” she added.
Speaking about the industrial business, she said that government spending on infrastructure could help the company achieve double-digit growth in the segment.
“In the industrial market, all the segments where we operate, rail, marine, mining, defence, oil and gas, these all are very connected to the infrastructure growth in the country and very specifically, the government's outlay on the construction segment. Going forward, if the infrastructure spending by the government continues, we do expect double-digit growth in the industrial business as well,” she said.
Cummins India reported a 24% year-on-year (YoY) increase in exports in Q2FY26. But Arya cautioned that global headwinds are far from over.
“Exports have been a mixed bag for the last few quarters because of the geopolitical conditions in different countries. There are some uh credit issues. There is now an inventory buildup in the channel as well. We see all of those playing out in the next few quarters.”
She noted that end-of-calendar-year corrections by global distributors could affect exports. “People holding on to their own capacity expansions in these different countries, largely owing to where the tariffs will land for them. Those kinds of issues are playing out,” she added.
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