Cummins India Limited Q4 FY25-26 Earnings Conference Call

Financial Performance Overview

Full Year FY26 Results (Year ended March 31, 2026):

  • Sales: ₹11,950 crores, increased by 18% YoY from ₹10,166 crores
  • Domestic Sales: ₹9,961 crores, increased by 19% YoY
  • Exports: ₹1,989 crores, increased by 12% YoY
  • Profit Before Tax (before exceptional items): ₹3,104 crores, increased by 24% YoY
  • Profit Before Tax (after exceptional items): ₹3,054 crores, increased by 22% YoY

Segment-wise Performance FY26 (Domestic):

  • Power Generation: ₹4,758 crores, increased by 24% YoY
  • Distribution Business: ₹3,278 crores, increased by 22% YoY
  • Industrial Business: ₹1,650 crores, marginally lower by 1% YoY

Segment-wise Performance FY26 (Exports):

  • High Horsepower Exports: ₹984 crores, increased by 20% YoY
  • Low Horsepower Exports: ₹807 crores, increased by 3% YoY

Q4 FY26 Results (Quarter ended March 31, 2026) vs. Same Quarter Last Year:

  • Sales: ₹2,963 crores, increased by 23% YoY from ₹2,414 crores
  • Domestic Sales: ₹2,513 crores, increased by 30% YoY
  • Exports: ₹450 crores, decreased by 6% YoY
  • Profit Before Tax (before exceptional items): ₹820 crores, increased by 20% YoY
  • Profit Before Tax (after exceptional items): ₹852 crores, increased by 25% YoY

Q4 FY26 Results vs. Previous Quarter:

  • Sales: ₹2,963 crores, marginally lower by 1% QoQ from ₹3,006 crores
  • Domestic Sales: ₹2,513 crores, lower by 1% QoQ
  • Exports: ₹450 crores, lower by 5% QoQ
  • Profit Before Tax (before exceptional items): ₹820 crores, increased by 14% QoQ
  • Profit Before Tax (after exceptional items): ₹852 crores, increased by 44% QoQ

Q4 FY26 Segment-wise Breakdown:

Domestic Business:

  • Power Generation: ₹1,294 crores (48% increase YoY, 21% increase QoQ)
  • Distribution Business: ₹766 crores (21% increase YoY, 18% decrease QoQ)
  • Industrial Business: ₹381 crores (1% increase YoY, 18% decrease QoQ)

Exports:

  • High Horsepower: ₹217 crores (1% decrease YoY, 7% decrease QoQ)
  • Low Horsepower: ₹127 crores (18% decrease YoY, 5% decrease QoQ)

Management Commentary and Outlook

The company expects moderate growth across segments in FY 2026-27. While domestic demand remains stable, management expressed caution due to ongoing geopolitical developments and their potential impact on the broader economy.

Key Business Highlights from Q&A Session

Data Center Business:

  • Data centers contributed 30-35% of Power Generation domestic revenue in FY26
  • In Q4 FY26, data center contribution was approximately 35% of Power Generation domestic revenue
  • Inquiry velocity increased significantly since October 2025, particularly from Colocation players
  • Localization content for data center products is already very high, with only some components imported
  • Lead times for imported components have increased due to global demand

Segment-wise Demand Outlook:

  • Power Generation: Strong demand from manufacturing, solar cell plants, pharma, quick commerce dark stores, luxury residential realty, and commercial realty
  • Industrial Business: Robust demand from railways; mining showing recovery with new tenders; construction segment stable; compressor segment entering down cycle
  • Distribution Business: Focus on providing service packages for CPCB IV+ products coming out of warranty from June 2026 onwards

Capacity and Capital Expenditure:

  • Overall capacity utilization hovering around 70%
  • Company has invested over ₹1,000 crores in the last 5 years for modernization and line capability expansion
  • No major capital expenditure plans; continuing with ongoing modernization investments

Competitive Landscape:

  • Competition intensity remains stable in high horsepower segment
  • Company differentiates through end-to-end solution offering, including installation support, service, predictive maintenance, and diagnostics
  • Local competition hiring from Cummins is not new and doesn't significantly impact business

Battery Energy Storage Systems (BESS):

  • Significant interest and inquiries, but limited sales so far
  • Positive long-term outlook, but no local supply chain yet
  • Working towards localization as market develops

Commodity Inflation and Pricing:

  • Experiencing commodity price increases across the board
  • Attempting to pass on increases with some lag and challenge
  • Pricing largely sustained across CPCB IV+ range, though competition remains intense in lower ranges

Supply Chain:

  • Supply constraints due to labor shortages, commodity pricing, fuel costs, and geopolitical issues
  • Electronics supply not currently a challenge
  • Parent company investing $450 million to increase capacity by 20 gigawatts by 2030, which should compress import timelines