UBS analyst Steven Fisher upgraded Cummins from Neutral to Buy, raising the price target to $850. The previous target was $565. The upgrade reflects increased confidence in the company's performance potential.

Rating Change

The move from Neutral to Buy signals a shift in outlook. The new price target of $850 represents a significant increase from the prior level.

Cummins India reported an 18% increase in sales to ₹11,950 crore for the financial year ended March 31, 2026, compared to ₹10,166 crore in the previous year. Domestic sales grew 19% to ₹9,961 crore, while exports increased 12% to ₹1,989 crore. Profit before tax after exceptional items rose 22% to ₹3,054 crore. The company expects moderate growth across segments in FY27, citing stable domestic demand but caution regarding geopolitical developments and commodity inflation.

Financial Performance

For the quarter ended March 31, 2026, sales increased 23% to ₹2,963 crore from ₹2,414 crore in the same quarter last year. Domestic sales for the quarter rose 30% to ₹2,513 crore, whereas exports declined 6% to ₹450 crore. Profit before tax after exceptional items for Q4FY26 grew 25% to ₹852 crore.

Segment Performance

Power Generation domestic sales for FY26 reached ₹4,758 crore, a 24% increase, while Distribution business sales grew 22% to ₹3,278 crore. Industrial domestic business sales marginally decreased by 1% to ₹1,650 crore. In exports, high horsepower sales rose 20% to ₹984 crore, and low horsepower sales increased 3% to ₹807 crore.

Operational Outlook

The data center business contributed between 30% and 35% of overall power generation domestic revenue for the full year, and approximately 35% for the quarter. Management noted robust demand from the domestic market but highlighted supply constraints, labor shortages, and commodity pricing as areas of caution. The company’s overall capacity utilization is around 70%, and it continues to invest in modernization and line expansion.