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IDBI Capital Report

Cummins India Ltd.'s Q3 FY26 performance was broadly in line with the brokerage's expectations. While revenue declined by ~1% YoY, Ebitda and adjusted PAT grew by 6% and 5% respectively.

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 ~38% for the quarter. This is a result of the management's assiduous efforts in reducing direct material costs, optimising product mix and a one-time benefit from the supplier's end.

Guidance is of double digit revenue growth in FY26 and FY27 with the strong domestic infrastructure momentum spurring growth.

IDBI Capital maintains Hold rating on the stock with unchanged target price of Rs 4,401 as the brokerage believes valuations have caught up with growth prospects.

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