Cummins India Q3 PAT misses Street estimates; engine maker optimistic on industrial trends

Engine manufacturer Cummins India on Wednesday reported a consolidated net profit of Rs 486.1 crore for the quarter ended December 31, marking a 13 per cent decline over the corresponding period a year ago. The Pune-headquartered company supplies power generation equipment to industrial players.

The company said its profitability was aided by volume leverage and operational efficiencies.

Its revenue declined 1.5 per cent to Rs 3,006.2 crore, according to a regulatory filing.

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Both net profit and revenue fell short of Street expectations.

According to Zee Business research, Cummins India’s third-quarter net profit and revenue were estimated at Rs 561 crore and Rs 3,264 crore, respectively.

The company said its domestic sales declined 2.0 per cent to Rs 2,535 crore, and exports grew 2.0 per cent to Rs 471 crore.

Its profit before tax (PBT) rose 11 per cent on a year-on-year basis to Rs 670 crore.

The company’s net profit margin — a key measure of profitability — came in at 15 per cent, it noted.

The Consumer Price Index (CPI) remains stable compared to the last quarter, which shows rapid momentum, said Shveta Arya, Managing Director, Cummins India.

“Other macroeconomic indicators like Index of Industrial Production (IIP), crude oil price, show supportive trends. With indirect taxation reforms and further reduction in repo rate, we believe the Indian economy continues to be positioned for an estimated 7.4 per cent GDP growth,” added Arya.

Demand for industrial suppliers is directly linked with economic activity recorded in high-frequency indicators like IIP — which record changes in factory output.

Cummins India said that while domestic demand continues to demonstrate resilience, aided by sustained capex across key sectors, exports face near-term pressures amid ongoing geopolitical uncertainties.

The company said it expects greater stability over the medium to long term.

Cummins India also said it remains watchful of policy developments and sees continued collaboration with trade partners as a key enabler of growth across its end markets.

“Against this backdrop, we are executing with discipline maintaining prudent capital allocation, strong cost controls, and a healthy balance sheet and cash position. Customer satisfaction and shareholder value creation continue to be our primary focus. Backed by reliable technology, talent capabilities, a dependable brand, diverse products, strong manufacturing capabilities, and a wide distribution and service network, the Company is well-positioned to serve customers efficiently,” it said in a statement.

Earlier on Wednesday, the Cummins India stock rose 0.8 per cent to end at Rs 4,200.9 apiece on BSE.

At the current level, the Cummins stock (CUMMINSIND) has declined 6.1 per cent so far this year, underperforming a 1.4 per cent decline in the Nifty 50 index.

In the last one year, Cummins India shares have rewarded investors with a return of 47.2 per cent, outperforming an 8.6 per cent rise in the market benchmark.