Cummins India Shares Jump 9% as Company Sees Strong Growth in Data Centre Business

Synopsis: Cummins India shares rebounded over 9% from today’s low after management’s optimistic earnings call, highlighting double-digit domestic revenue growth by FY27 and robust data center segment expansion, supported by global demand and favorable regulations.

The shares of this company engaged in the business of manufacturing, trading, and selling engines and allied activities and offers engines for various applications, including power generation, railways, defence, etc are now in focus after it rose by 9% from its low following management’s positive commentary on the company’s prospects in the data center segment.

With a market capitalisation of Rs. 1,20,552 cr, the shares of Cummins India Ltd were trading at Rs. 4,379 per share, increasing 9% from today’s low of Rs. 4,026.70, making a high of Rs. 4,409.45, up from its previous close of Rs. 4,200.85 per share. 

The stock’s performance over different periods is as follows: it gained 49.92% in the past year, declined 2% year-to-date, rose 21.79% over the past six months, and increased 1.61% in the past month.

Cummins India Ltd shares surged 5% today, rebounding more than 9% from intraday lows. The sharp recovery came after management’s positive commentary on the company’s prospects in the data center segment during its recent earnings call, which reassured investors and triggered buying momentum.

Growth Outlook

The company’s management provided a bullish revenue outlook, guiding for double-digit domestic revenue growth across all segments by FY27. They specifically highlighted the data center business as a key growth driver, with expectations of double-digit expansion fueled by increasing inquiries from hyperscalers. This guidance reflects the company’s confidence in both domestic and global demand trends over the coming years.

Cummins India anticipates sustained positive momentum in the data center segment over the next 3–4 years, driven by stronger domestic demand and ongoing global opportunities. 

Currently, data centers account for approximately 25% of the company’s power generation revenues, underscoring their strategic importance. The management emphasized that the data center business is experiencing robust growth globally, particularly in the US and China, where the company has an active presence. They also noted that US tariffs have not materially affected export operations, maintaining confidence in international business prospects.

Management indicated that no new emission norms for power generation units below 800 kWh are expected in the next 3–4 years, reducing regulatory concerns for the business. Additionally, they highlighted the tax incentives for data centers announced in the recent budget as a positive development, which could further support growth in this high-potential segment.

Cummins India designs, manufactures, and services diesel and alternative fuel engines (2.8–95L) and generator sets up to 3,000 kW. Part of the US $23.6B Cummins Inc, it serves customers through 3 GOEMs, 21 dealerships, and over 120 branch offices across India.

The company is almost debt-free and has delivered strong profit growth of 22.4% CAGR over the last five years. It maintains high returns with a ROCE of 36.3% and a 3-year average ROE of 26.3%, while rewarding shareholders with a healthy dividend payout of 63%.

The company reported a slight decline in sales, down 1% YoY to Rs. 3,055 cr in Q3FY26 from Rs. 3,096 cr in Q3FY25. EBITDA rose 6% to Rs. 634 cr, while net profit decreased 13% to Rs. 486 cr from Rs. 558 cr. EPS fell 13% to Rs. 17.53, compared to Rs. 20.15 a year ago.

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