Shares of Cummins India will be in focus today, June 1 as brokerages remain mixed, highlighting strong demand from power generation, distribution, and data-centre businesses, which are expected to support earnings growth and margins, while flagging geopolitical concerns.
The outlook from brokerages come after Cummins India announced its January-March quarter results for fiscal 2025-26 (Q4FY26) on Wednesday, May 27, reporting a steady growth of 22% in its topline (revenue from operations) to Rs 3,012 crore, compared to Rs 2,457 crore in the corresponding period last year. The engine and power solutions maker's net profit (bottomline) rose 27% to Rs 22.6% to Rs 650 crore in the fourth quarter of FY26, compared to Rs 530 crore in the year-ago period.
Jefferies maintained ' Buy' on Cummins India stock, hiking the target price to Rs 7,100, marking a 20.7% upside from closing price of Rs 5,881. Citing impact of geopolitical tensions impacting exports, Macquarie retained 'Outperform' at a target price of Rs 5,750, a 2.2% downside. Golman Sachs reiterated 'Sell' rating at a target price of Rs 3,980, around 32% downside expecting moderate growth ahead. Meanwhile, HSBC maintained 'Buy' rating on the stock and raised the target price to Rs 6,500, marking 10.5% upside.
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Jefferies On Cummins India
- The brokerage maintained 'Buy' and hiked target price to Rs 7100.
- Margin tailwinds ahead
- Rising share of higher margin distribution business
- Higher contribution of data centres
- Indigenization of higher import content for engine upgrade
- Upgrade FY27-28 EPS by 5-7%
Macquarie On Cummins India
- Macquarie retained 'Outperform' and raised target price to Rs 5,750.
- Robust domestically; geopolitics hurt exports
- Gross margin declined 120bps as supply chain disturbances drove higher input prices.
- Management expects export growth to normalise over time
- Lower FY27/FY28 PAT by 3%
Goldmans Sachs On Cummins India
- Goldman Sachs maintained 'Sell' at a target price of Rs 3,980
- Growth moderation ahead; data-center scale up priced in
- Management guided for a moderation in growth across segments in FY27E
- Risk-reward is not favourable and peak growth may be behind, even though growth will continue
- Concerned given the bulk of the company's business depends on ICE (Internal Combustion Engine), an area which is in structural decline
HSBC On Cummins India
- The brokerage maintained 'Buy' and raised target price to Rs 6,500.
- Strong powergen and distribution growth drives 20% PAT growth in Q4.
- Strong data centre demand, sustained distribution growth, and exports recovery to drive20% EPS CAGR (FY26-29e)
- Raised earnings and higher multiple to account for improving ROIC
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