1. At a Glance
₹1.21 lakh crore market cap. Zero debt worth worrying about. ROCE north of 36%. PAT margins that make most capital goods companies quietly cry in the washroom. Cummins India Ltd is that rare industrial beast that sells heavy metal, burns fuel for a living, yet behaves like a consumer compounder on the balance sheet.
The stock has already delivered 50%+ return in one year, trades at a chunky 52x earnings, and still refuses to slow down. Q3 FY26 numbers? Revenue of ₹3,055 Cr, PAT of ₹583 Cr, despite a mild QoQ revenue dip. Dividends flowing like diesel from a freshly serviced engine. Parent Cummins Inc. (USA) owns 51%, keeps technology flowing, and doesn’t mess around with capital allocation stupidity.
If you like boring businesses that quietly become monsters, this one deserves attention. But is it too perfect? Or is the market pricing in a future where every data centre, mine, railway coach, and defence vehicle needs a Cummins heart? Let’s open the bonnet.
2. Introduction
Cummins India is not flashy. It doesn’t sell apps, doesn’t promise AI disruption every quarter, and definitely doesn’t use the word “platform” to justify bad margins. Instead, it does something shockingly old-school: it manufactures engines that actually work, in environments where failure is not an option.
From railways to mining trucks, from data centres to defence tanks, Cummins engines sit inside machines that cannot afford downtime. And when reliability becomes the product, pricing power quietly follows.
The real flex? While most Indian capital goods companies struggle with cyclicality, Cummins India has turned emission norms, regulation, and energy transition into profit levers. CPCBIV+, CAQM norms, higher horsepower gensets, dual fuel kits—each regulation just means customers must upgrade. Guess who sells the upgrades?
The last few years have seen:
- Rising domestic share (83% of revenue now)
- Exploding demand from data centres
- Defence and
- railways becoming serious contributors
- Lubes business throwing steady cash without drama
So yes, the stock looks expensive. But expensive relative to what? A cyclical engineering company? Or a regulated monopoly-like industrial franchise with global tech backing?
Let’s break it down.
3. Business Model – WTF Do They Even Do?
At its core, Cummins India builds engines, gensets, and power solutions. That’s it. No financial engineering. No unrelated diversification.
Engines Segment (81% of FY25 revenue)
This is the big daddy.
Power Generation
- Over 23,000 CPCBIV+ gensets delivered in FY25
- New launches in 1000kVA+, 2000kVA Prime, and 2500kVA DCC for data centres
- Dealer network expanded to 127 dealers
Translation: every hyperscaler spinning up servers needs backup power, and Cummins is the default choice.
Industrial Applications
- Railways: First mover in LHB power car engines + hotel load converters
- Mining: High-tonnage dump trucks, excavators, crushers—engines that live brutal lives
- Defence: Prototype engine delivered for Indian Army light tank
- Oil & Gas: Gas compression engines
- Marine: Defence and commercial vessels
If India is building, digging, or defending something heavy, Cummins probably has a part inside it.
Lubes Segment (19% of FY25 revenue)
Via Valvoline Cummins (50:50 JV).
- Stable, high-margin, boring cash flows
- Brand-led, less cyclical
- Helps smooth earnings volatility
This segment is basically the
