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Informist, Friday, Aug. 8, 2025

By Shakshi Jain 

NEW DELHI – Industry-wide volumes of generator sets compliant with Central Pollution Control Board's IV+ emission norms are near to CPCB II levels and their pricing is largely settled in the market, Managing Director of Cummins India Shveta Arya said at a post-earnings analyst conference call Friday. In the June quarter, CPCB IV+ compliant products accounted for 60% of the company's domestic revenue in the power generation segment.

"We have reached those volumes in the market now and from a pricing perspective, I think there is now a good settlement of pricing in the market. There is a lot of competition still and that will continue," Arya said, adding that the company's endeavour is to continue holding on to the same prices. Cummins India made a switch over to CPCB IV+ compliant products from Jul. 1 last year and the overall industry has benefitted from higher prices of these generator sets. This had pushed sectoral analysts to consider possibilities of a price war amid high competition in the indutry.  

In terms of financial performance in the June quarter, Cummins India Ltd. said its distribution business during the quarter primarily benefitted from better penetration and execution in the railways and power generation categories, even though new products launched in the segment have begun registering contribution. Meanwhile, some projects in the construction segment were affected due to the early arrival of monsoon. Further, the compressor category continued to see steady demand in Apr-Jun alongside demand from data centres, which has been stable since the last few quarters, as per the company. On marine projects, the company said they are tender-based and dependent on government orders but are seeing steady growth.

"Powergen growth this quarter (Apr-Jun) was very broad-based....we've been been focusing on quick commerce and that is one growing segment and we saw that segment growing in this quarter as well. And then the mission-critical segment which is also broad-based where you can include government infrastructure spend-based segments like roads, hospitals, airports. We saw some growth from those segments as well as manufacturing and pharma," Arya said. On demand for data centres, the company said it has a robust orderboard in the category from both domestic and international players. 

For the June quarter, Cummins India reported a net profit jump of over 40% on year to INR 5.89 billion. Its revenue from operations rose more than 26% on year to INR 29.07 billion during the three months. Its domestic sales rose 25% year on year in Apr-Jun to INR 23.36 billion while revenue from exports rose 34% to INR 5.23 billion.

Fielding a question on whether the nascent battery energy storage system business may cannibalise its generator business, Arya said: "...As far as possible, we don't see this. We do see our customers wanting a mix of energy capabilities. So while genset is for their backup power, there is a mix, a good mix, energy mix that battery energy storage provides, especially for customers who might also have solar power in their premises. So the battery can be used to store that solar power... As of now, we do not see a risk of cannibalisation." Cummins India is presently building an orderboard for this segment while meeting customers and presenting the value proposition.

"We will see how we are seeing the results in the market, what are the customers asking, what do they need and accordingly we will take calls on future supply chain and manufacturing," Arya said.

CAUTIOUS OPTIMISM

While the company is seeing stable demand in the domestic business, it remains "cautiously optimistic" on exports while being watchful of geopolitical uncertainties. On the impact of tariffs by the US, Arya said given the company's diverse geographical portfolio, the share of exports to the US is not significant. She added that Cummins India endeavours to hold on to its operating margins and maintained the aim to clock double-digit growth in the ongoing financial year.  

"We have been focusing a lot on our costs as well. And we have been working very hard to optimise our costs to the right level. That from an employee cost or other kinds of spend will continue. On other hand, in our capacity in terms of upgrading the lines, expanding the lines, we have been putting in capital over the last few years continuously," Arya said. The company's capacity utilisation presently stands at 65% to 70%.

Shares of Cummins India Friday closed at INR 3,806.90 on the National Stock Exchange, up 3.6%. The stock hit an over 10-month high of INR 3,900.10 during the day.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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