Cummins India Ltd First Take: Very weak margins in 1QFY27; MD resigns

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

05 August 2026

Cummins India Ltd

First Take: Very weak margins in 1QFY27; MD resigns

Neutral

CUMM.NS, KKC IN

Price (05 Aug 26):Rs5,440.00

Price Target (Sep-27):Rs5,882.00

Our First Take: Cummins India (CIL) reported very weak margins in 1QFY27,

with consolidated EBITDA margin at 18%, down 346bps y/y and 370 bps below

JPMe. The margin contraction was due mainly to an increase in CoGS, which rose

351bps y/y (as a % of sales). As a result, consolidated PAT of Rs6.1bn grew just

3% y/y (-10% vs. JPMe) despite 18% y/y revenue growth (+4% vs. JPMe). In

addition, Managing Director Ms. Shveta Arya has resigned to pursue external

opportunities.

India Industrials, Electric Utilities,

and Infrastructure Sectors

Atul Tiwari AC

Key Positives

1QFY27 consolidated revenue of Rs34.3bn grew 18% y/y and was +4% vs. JPMe.

Revenue growth was healthy in 1QFY27.

Domestic revenue grew 22% y/y, while export revenue was flat y/y.

Key Negatives/Question Marks

Weak margins in 1QFY27 were a big negative surprise, especially in the context

of CIL’s relatively low exposure (vs. other industrial names) to commodities like

copper/silver, etc., and a relatively benign demand environment in end markets.

(91-22) 6157-3582

Rishabh Gupta

(91-22) 6157-3429

Muskan Agarwal

(91-22) 6157-3226

J.P. Morgan India Private Limited, J.P. Morgan

Tower, Santacruz(E), Mumbai - 400098, SEBI

Registration: INH000001873, (91-22) 6157-3000.

1QFY27 EBITDA margin was the lowest over the past 10 quarters and, unlike at

other industrial names, CIL’s margins had been holding up better till now.

The key question we expect investors to ask is: Does 1QFY27 mark the end of the

robust margin performance phase, or is it an aberration?

We reiterate our Neutral rating on CIL. Please see our downgrade note here.

Likely Changes to Consensus

Weak margin performance will lead to downward revisions in margin and EPS

estimates, in our view. The extent of the downward revision will depend on

management’s commentary on the call.

Expected Stock Reaction

Weak margin performance and the MD’s resignation will lead to a negative stock

price reaction, in our view.…