In its September 2025 report, Mirae Asset Sharekhan has reiterated its bullish stance on Cummins India Ltd., advocating a BUY recommendation with a revised price target of Rs 4,500. Cummins India, a subsidiary of Cummins Inc., USA, is at the forefront of the powergen sector, powered by robust demand, sectoral tailwinds, and strategic leadership in high-margin segments. The company’s financial trajectory reveals a consistent uptrend, underpinned by innovation, resilient margins, and market share expansion, even amidst macroeconomic and geopolitical headwinds. As India’s infrastructure ambitions accelerate, Cummins India emerges as an enviable pick for discerning investors, with compelling growth metrics and formidable competitive advantages.

Summary of Cummins India’s Growth Story

Cummins India is experiencing a renaissance in its core powergen business, with demand rebounding across real estate, manufacturing, datacenters, and healthcare. The leadership position is fortified by early adoption of new emission norms and high customer loyalty. Mirae Asset Sharekhan’s research underscores healthy volume recovery, stable pricing, and margin expansion, all set against the backdrop of India's ambitious infrastructure pipeline. Investors are encouraged to consider the broader sector momentum, robust financials, and the company’s resilience, as risks pertaining to exports and supply chains are weighed and actively managed.

Financial Performance and Valuation Highlights

Exceptional Earnings Momentum:
Cummins India posts a streak of double-digit growth, with revenues rising from Rs 7,744 crore in FY23 to a projected Rs 13,802 crore by FY27E. Net profit surges in parallel, expected to exceed Rs 2,546 crore by FY27E, cementing the company’s profitability arc.

Valuation Levels and Multiples:
The current market price stands at Rs 4,052, with a one-year forward Price/Earnings ratio trending at 52x and the price target set at Rs 4,500. Mirae Asset Sharekhan ascribes a terminal valuation multiple of 49x on FY27E earnings, reflecting optimism about both sector prospects and company-specific execution.

Core Metrics Table:

Market Dynamics: Powergen Segment Surges

Revival Arc in Powergen Demand:
Cummins’ powergen business is experiencing a sweeping upturn, fueled by the adoption of CPCB-IV+ emission norms. High horsepower gensets remain in robust demand, spurred by hyperscale datacenters and healthcare expansions. The volume of CPCB IV+ compliant units is tracking at 80–85% of previous CPCB-II levels, with pricing discipline preserved.

Data Center Demand Propels Growth:
India’s burgeoning hyperscale ecosystem, with 200–300 MW annual expansion in datacenters, is generating significant inquiries for Cummins’ high HP products. This structural tailwind is complemented by strong aftermarket support and an innovation-led competitive moat.

Exports and Risk Assessment

Optimism Tempered by Global Headwinds:
While domestic momentum is unequivocal, export demand confronts challenges due to recessionary signals from Europe, Latin America, and Africa. Despite these headwinds, Cummins leverages scale benefits and engaged trade partnerships to navigate global uncertainties.

Supply Chain and Geopolitical Risks:
Operational vigilance remains critical, as any supply-side disruptions or intensifying geopolitical crises could weigh on export volumes and margin prospects.

Investor Levels, Technicals, and Shareholding Structure

Key Stock Levels:

CMP: Rs 4,052

BUY Target: Rs 4,500 (12-month horizon)

52-week High/Low: Rs 4,094 / Rs 2,594

Forward P/E Band: ~44x–52x estimated next two years

Shareholding Overview:
Promoters control 51.0% while FII and DII hold 17.5% and 22.6% respectively, testifying to strong institutional backing and confidence.

Investment Theme and Industry Outlook

Cummins India is uniquely positioned as the market leader in mid- and large-range gensets, holding an enviable 40% share in diesel engines/gensets. Its strategic alignment with market trends and regulatory changes (CPCB-IV+) secures enduring demand, while its eight manufacturing facilities fortify supply-side reliability.

Infrastructure Ambitions Fuel Sector Growth:
India’s target to become a $5 trillion economy by 2030 mandates Rs 4.5 trillion in infrastructure spend, with NIP anchoring sectoral investments. This macro thrust benefits Cummins directly, amplifying sales potential and cross-segment synergies.

Risks and Forward Guidance

Risks Relating to Supply Chain and Exports:
Potential supply-side bottlenecks and lingering global uncertainty, particularly arising out of the Russia-Ukraine crisis, remain watchpoints for investors. Strategic cost initiatives and tech-driven differentiation mitigate some of these risks.

Sector and Valuation Considerations:
Despite premium valuations, the underlying earnings outlook and return ratios persistently improve. Cummins India stands out with sector-leading quality, management depth, and robust balance sheet.

Cummins India – An Unmatched Growth Beacon for Long Term Holding

Mirae Asset Sharekhan’s latest research crystalizes Cummins India as a nonpareil pick in the capital goods space, with secular demand, sectoral optimism, and financial prowess. The BUY call is reaffirmed, establishing Rs 4,500 as a realistic target for investors who value both steady returns and market resilience. Cummins India’s ability to adapt, innovate, and lead through transitionary norms and infrastructure megatrends marks it as a cornerstone in any well-constructed portfolio.