Cummins India shares surged 7% to trade at Rs 3,187 following the announcement of the company's Q4 FY25 results. The company reported a 7.2% year-on-year decline in net profit to Rs 521.37 crore for the quarter ended March 31, 2025, compared to Rs 561.52 crore in the same period last year. Despite the drop in profit, investor sentiment remained positive, driven by strong management commentary and confidence in domestic demand momentum. However, Cummins India is still trading 23% below its all-time high.
In an exclusive post-results interaction, Shweta Arya, MD of Cummins India, shared detailed insights into the company’s performance, future expectations, and long-term strategy. ( Interview by Economic Times)
Q1 Decline Just a Blip, Full-Year Performance Strong
When asked about the decline in bottom-line performance, Arya explained that the dip was limited to this particular quarter and was largely influenced by the project execution timeline and product mix. She emphasized that for the full financial year 2024-25, both margins and PAT remain healthy, showing robust year-over-year growth.
Domestic Demand Solid, Export Market Cautiously Optimistic
Arya highlighted the strength in domestic demand, especially in the power generation market, with active inquiries and orders across segments. She noted that demand in industrial sectors such as railways, mining, marine, and construction also remained steady.
On the export front, Cummins has seen a 40% year-on-year growth, a result of strategic focus on product placement and pricing in key international markets. However, due to geopolitical uncertainties and tariff-related developments, the company is adopting a cautious approach in the future.
Global Parent Withdraws Guidance, Indian Outlook Positive
The global parent company of Cummins has withdrawn its guidance for the remaining months of the year, citing ongoing volatility in global tariff scenarios and geopolitical uncertainty. Arya acknowledged that these rapid changes are under constant evaluation.
In contrast, Cummins India remains optimistic. Citing India's projected GDP growth of 6.5% for FY 2025-26 and continued government spending, Arya confirmed the company’s guidance of double-digit revenue growth for the upcoming year in the domestic market.
Margin Expansion Depends on Several Factors
On the subject of margin outlook for FY26, Arya remained cautiously hopeful. She mentioned that margins are influenced by product pricing, product mix across segments, and export performance. Although the input cost pressure appears to have stabilized, the company is focusing on cost reduction and delivering value to customers to maintain profitability.
Capex Plans to Remain Steady
Cummins India plans to maintain a similar capital expenditure in FY 2025-26 as seen in the previous year. The focus will continue to sustain current capacity, line automation, and incremental expansion.
Green Technology: A Long-Term Strategic Commitment
In response to questions on clean energy initiatives, Arya underlined that transitioning to green technology is a long-term journey. The company is actively working on technology readiness in areas like hydrogen, hybrid engines, and alternative fuels. She emphasized that customer needs differ across applications, and Cummins aims to provide tailored solutions accordingly.
She also stressed the importance of ensuring affordability and accessibility of new technologies for the Indian market. Cummins is closely collaborating with customers to determine the right solutions for their specific use cases, focusing on long-term sustainability rather than a quick shift.
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