Cummins India has released its Q3 FY26 financial results, showcasing resilient performance with stable revenues and improved profitability metrics, while maintaining optimistic projections for domestic market growth despite export uncertainties.

Financial Performance Highlights

For the quarter ended December 31, 2025, the company delivered stable financial performance with revenues remaining broadly flat compared to the previous year. The results demonstrate the company's ability to maintain profitability despite challenging market conditions across various segments.

Segment-wise Performance Analysis

The company's diversified portfolio showed mixed results across different business segments. Power Generation domestic sales faced headwinds primarily due to the lumpy nature of data center business, while Distribution business demonstrated robust growth momentum.

Power Generation and Industrial Segments

The Power Generation segment's decline was attributed to the absence of major data center executions that occurred in the previous quarter, while the underlying core business maintained steady growth. Distribution business achieved all-time high quarterly revenues, representing 31% of total sales.

Strong Margin Performance

The company achieved historic high gross margins of approximately 38%, driven by multiple factors including product mix optimization, supplier cost improvements, and one-time supplier benefits. However, management noted that certain elements contributing to this performance may not be repeatable.

Data Center Pipeline Remains Robust

Despite quarterly fluctuations, Cummins India maintains a strong data center pipeline with positive outlook for the next three to four years. The recent tax incentives announced in the budget are expected to further boost data center investments, though the company awaits conversion of these policy benefits into actual orders.

Forward-Looking Guidance

Management expressed confidence in achieving double-digit revenue growth for FY26, supported by demand across key segments. For FY27, the company targets double-digit growth in the domestic market, leveraging India's projected GDP growth of around 7% and positive budget allocations for infrastructure development.

However, export outlook remains uncertain due to ongoing geopolitical issues and tariff-related challenges, making it difficult to provide specific guidance for international markets. The company continues to evaluate the impact of recent trade policy changes, including EU trade agreements and revised US tariff structures.

Cummins India has outlined ambitious growth projections for both FY26 and FY27, expecting double-digit revenue expansion driven by strong demand across its main business segments and favorable economic conditions.

FY26 Revenue Growth Expectations

The engineering and manufacturing company expects to achieve double-digit revenue growth for FY26 compared to the previous year. This growth projection is fueled by robust demand across the company's main operational segments, indicating strong market traction for Cummins India's products and services.

FY27 Domestic Market Outlook

For FY27, Cummins India aims for double-digit growth specifically in the domestic market. The company's optimistic outlook is supported by several key economic factors that create a favorable business environment.

Economic Drivers Supporting Growth

The company highlights multiple positive economic indicators that underpin its growth projections. The strong Indian economy, with GDP growth of about 7.00%, provides a solid foundation for business expansion. Additionally, favorable budget allocations for infrastructure development are expected to create significant opportunities for the company's engineering and manufacturing capabilities.

Cummins India's dual-year growth strategy reflects management's confidence in both immediate market demand and longer-term economic fundamentals, positioning the company to capitalize on India's robust economic trajectory.