Cummins India's March quarter performance exceeded expectations with profit after tax of ₹650 crore, up 21% year-on-year and 15% above estimates, prompting Citi to significantly raise its target price to ₹6,700 from ₹5,200 while maintaining its 'Buy' rating. The brokerage highlighted that datacentre-linked deliveries accelerated during FY26, with enquiries from colocation operators picking up after October 2025. According to Citi, high-horsepower power generation revenue grew more than 50% year-on-year during the March quarter, supported by deliveries linked to datacentre projects. Datacentres contributed around 30-35% of full-year power generation revenue and about 35% of segment revenue during the fourth quarter, with enquiry activity accelerating sharply after October 2025 led by both hyperscalers and colocation operators.
Despite several brokerages raising earnings estimates and price targets following Cummins India's stronger-than-expected Q4 FY26 performance, shares of Cummins India Ltd. fell 3.5% in trade today after the company reported its quarterly numbers. As per Business Standard, the stock opened positively at ₹5,979.50 on NSE but soon erased gains to trade in the red, hitting a low of ₹5,689. According to reports from CNBC TV18, the mixed market reaction reflects varying analyst perspectives on the company's prospects, with some brokerages maintaining cautious stances despite the positive quarterly results. The latest results were announced on Wednesday, May 27, showing steady growth across key metrics.
Following the Q4 FY26 earnings beat, Jefferies maintained its 'Buy' rating and raised its target price to ₹7,100, marking a 20.7% upside from the closing price of ₹5,881. According to CNBC TV18, HSBC reiterated its 'Buy' rating and increased its target price to ₹6,500, while Macquarie retained its 'Outperform' rating with a target price of ₹5,750. However, Goldman Sachs maintained its 'Sell' rating at a target price of ₹3,980, expecting moderate growth ahead and citing concerns about the bulk of the company's business depending on ICE (Internal Combustion Engine) which is in structural decline. Citi's upward revision reflects stronger expectations for power generation and distribution businesses, with the brokerage increasing its FY27 profit after tax estimate by 8% and FY28 estimate by 14%.
Cummins India reported total sales of ₹2,963 crore for Q4 FY26, up 23% year-on-year from ₹2,428 crore in the same quarter last year. As per Business Standard, domestic sales were ₹2,513 crore, higher by 30% compared to the same quarter last year, while export sales came in lower by 6% Y-o-Y at ₹450 crore in the quarter. The company achieved a profit margin of 21.9% for the reporting quarter. For the entire fiscal year 2026, profit grew by 22% Y-o-Y to ₹2,330 crore, while sales increased by 18% Y-o-Y to ₹11,950 crore. The strong performance was largely attributed to robust domestic demand, rising contributions from the fast-growing data centre segment and continued strength in the distribution business.
The distribution business is entering a favourable phase that could support both growth and profitability, with a structural opportunity emerging from June 2026 as CPCB IV+ engines begin moving beyond their standard warranty periods. According to Citi, the Distribution Business Unit delivered 22% year-on-year growth during FY26, driven largely by volume expansion. The brokerage noted that the company has been actively pursuing this opportunity through extended warranty programmes and specialised maintenance packages aimed at capturing higher-margin lifecycle revenue. Citi expects the distribution business to benefit from a new tailwind beginning June 2026, with the company well-positioned to counter competitive pressures through end-to-end lifecycle solutions and local supply chains. Beyond data centres, the brokerage highlighted that positive demand commentary from broader peers augurs well, with resilience continuing from newer drivers such as solar cell manufacturing plants in Q4 and quick commerce previously in FY26.
