1. At a Glance
Cummins India is that quiet nerd in the capital goods class—always topping charts, barely noticed until the final results come in. FY25 net profit ₹2,000 Cr, ROCE 36.4%, dividend payout 71%, and now, they’ve added battery storage to their fossil-fueled portfolio. The torque is real.
2. Introduction with Hook
Picture this: a company that makes industrial engines and gensets, quietly throws ₹714 Cr “other income” into its profit engine, declares a ₹33.50 final dividend, and then—surprise—launches a battery energy storage line. That’s Cummins India.
- 23% 5Y profit CAGR
- FY25 revenue ₹10,391 Cr
- OPM touching 20% — unheard of in diesel world
If reliability had a brand mascot, it would be Cummins with a wrench and a dividend cheque.
3. Business Model (WTF Do They Even Do?)
Cummins India Ltd is a subsidiary of Cummins Inc. USA. It designs, manufactures, and services:
- Engines (69% of revenue): Diesel, natural gas, and hybrid for industrial use
- Power Systems: Generator sets up to 3,000 kW
- Components: Filters, turbochargers, emissions systems
- New Segment: Battery Energy Storage (launched June 2025)
The company serves sectors like railways, defence, real estate, construction, and export OEMs. Quietly powering India, literally.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹7,772 Cr | ₹9,000 Cr | ₹10,391 Cr |
| Net Profit | ₹1,228 Cr | ₹1,721 Cr | ₹2,000 Cr |
| ROCE | 27% | 34% | 36.4% |
| OPM | 16% | 20% | 20% |
| Dividend Payout | 56% | 61% | 71% |
Observation: Cummins doesn’t just grow—it compounds. Profits up 62% in 2 years.
5. Valuation
| Metric | Value |
|---|---|
| Market Cap | ₹99,136 Cr |
| EPS (FY25) | ₹72.15 |
| P/E Ratio | 49.6x |
| Book Value | ₹273 |
| P/B | 13.1x |
Fair Value Estimate:
- Base: 35x PE = ₹2,525
- Bull: 50x PE = ₹3,607
- Ultra Bull (Battery biz kicks in): 60x = ₹4,330
FV Range: ₹2,500 – ₹4,300
Current price ₹3,576 = near upper end. Don’t expect cheap diesel.
6. What’s Cooking – News, Triggers, Drama
- Battery Energy Storage: Launched June 2025 – Cummins finally enters clean tech.
- CFO Reshuffle: Jan 2025 saw Ajay Patil exit and Prasad Kulkarni take over as interim CFO.
- Dividend Bomb: ₹33.50 final + high payout = shareholder love.
- Sale of Subsidiary: Cummins Sales & Services Pvt. Ltd. (WOS) sold. Leaner ops ahead?
7. Balance Sheet
| Item | FY24 | FY25 |
|---|---|---|
| Equity Capital | ₹55 Cr | ₹55 Cr |
| Reserves | ₹6,557 Cr | ₹7,506 Cr |
| Borrowings | ₹127 Cr | ₹30 Cr |
| Total Assets | ₹8,971 Cr | ₹10,168 Cr |
Takeaway: Basically debt-free. Cash-rich, low leverage. A banker’s dream date.
8. Cash Flow – Sab Number Game Hai
| Item | FY24 | FY25 |
|---|---|---|
| Operating Cash Flow | ₹1,285 Cr | ₹1,685 Cr |
| Investing Cash Flow | ₹-248 Cr | ₹-582 Cr |
| Financing Cash Flow | ₹-1,134 Cr | ₹-1,168 Cr |
| Net Cash Flow | ₹-97 Cr | ₹-65 Cr |
Despite generous dividends, they still manage strong OCF. Capex rising = new capacity?
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 36.4% |
| ROE | 28.2% |
| Debtor Days | 80 |
| Inventory Days | 56 |
| Payables Days | 87 |
| Cash Conversion | 49 days |
Lean working capital. ROCE high enough to make IT firms jealous.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | Net Profit | EPS | OPM % |
|---|---|---|---|---|
| FY21 | ₹4,360 Cr | ₹635 Cr | ₹22.91 | 14% |
| FY22 | ₹6,171 Cr | ₹934 Cr | ₹33.68 | 14% |
| FY23 | ₹7,772 Cr | ₹1,228 Cr | ₹44.31 | 16% |
| FY24 | ₹9,000 Cr | ₹1,721 Cr | ₹62.07 | 20% |
| FY25 | ₹10,391 Cr | ₹2,000 Cr | ₹72.15 | 20% |
Consistent rise in both topline and bottom line. OPM moved from 14% to 20% in just 4 years.
11. Peer Comparison
| Name | ROCE | OPM | P/E | Div Yld | Market Cap |
|---|---|---|---|---|---|
| Cummins India | 36.4% | 20% | 49.6x | 1.44% | ₹99,136 Cr |
| Elgi Equipments | 21.8% | 14.9% | 50.0x | 0.40% | ₹17,515 Cr |
| KSB | 23.8% | 13.3% | 59.6x | 0.46% | ₹15,172 Cr |
| Shakti Pumps | 55.3% | 24.0% | 28.3x | 0.07% | ₹11,574 Cr |
| Ingersoll-Rand | 60.0% | 25.5% | 50.0x | 1.89% | ₹13,390 Cr |
Cummins leads in size and stability. Others may beat it in growth, but not in consistency.
12. Miscellaneous – Shareholding, Promoters
| Shareholder Type | Mar ’25 |
|---|---|
| Promoters | 51.00% |
| FIIs | 17.21% |
| DIIs | 22.84% |
| Public | 8.85% |
FII stake rising steadily since FY23. Institutions love this diesel deity.
13. EduInvesting Verdict™
Cummins India is the rare old-school manufacturing stock that delivers like a techie. High ROCE? Check. Fat dividends? Double check. Cash flows to die for? Yep. And now batteries too?
Yes, it’s expensive (13x book value), but so is a Rolex.
Verdict: If diesel’s the past and batteries the future, Cummins is selling tickets to both.
Metadata
– Written by EduInvesting Research | 15 July 2025
– Tags: Cummins India, Power Systems, Battery Storage, Capital Goods, ROCE Monsters, Dividend Yielders, EV Transition, P/E Giants
