Cummins India Limited

Industrials — Specialty Industrial Machinery · NSE

₹4,608.00−₹31.00 (−0.67%)

DalalBaazaar Score

81 / 100

🟢 Strong

Verdict

ATTRACTIVE

Risk

Low

Driven by a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with modest growth. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Cummins India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Cummins India Limited engages in the design, manufacture, distribution, and service of engines, generator sets, and related technologies in India, Nepal, and Bhutan. The company operates through two segments, Engines and Lubes.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees3,088

Annual revenue₹11,950 Cr

How does it make money?

Turns over ₹11,950 Cr a year. Of every ₹100 of sales, about ₹20 reaches shareholders as profit, with ₹28 left at the operating level before interest, tax and depreciation. Each of its 3,088 employees supports ₹3.87 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.87 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 35.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 27.9% against a peer median of 17.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE17.1%

What is the outlook?

17 analysts covering the stock expect revenue to grow about 18.2% and earnings to grow about 20.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+18.2%

Est. earnings growth+20.3%

Analysts17

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +56% while net margin moved +23% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+56%

Margin effect+23%

DalalBaazaar Score

81/ 100

Strong

Weighted across six categories. Every point is explained below.

✗ P/E of 54.0x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 57.0x
✗ P/B of 15.07x is a steep premium to book

Quality vs. Valuation

Company Quality

90/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

43/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

54.0x

3Y Median

57.0x

40 monthly readings · mean 59.1x · range 37.8x–89.5x

Sector Median

66.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 57.0x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 18% below the peer median of 66.2x.

vs. its own history

Fair

57.0x median over 40 months · -5%

vs. sector peers

Fair

66.2x median of 4 peers · -18%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

38.5x

PEG

2.22

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 22.5% to 27.7% over 3 years.
Debt is being paid down
Total debt is down 90% over 3 years.
Cash generation is improving
Free cash flow is up 125% over 3 years.
Return on equity is rising
ROE has improved from 21.3% to 27.9%.
Return on capital is rising
ROCE has improved from 26.7% to 35.0%.
High return on capital employed
ROCE of 35.0% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 35.0% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 22.5% to 27.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 90% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹1,483 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

No clear risk case emerges from the available numbers — which is not the same as there being none.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 12% a year✓ 16.1% CAGR
Latest reported year was 17.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 26%✓ 27.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹1,483 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 32%✓ 35.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 2 neutral · 2 weak

Market Cap

₹1.28 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

54.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

15.07x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹85.39

Profitable

Profitable on a per-share basis

ROE

27.9%

Strong

Strong capital efficiency

ROCE

35.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.43x

Low

Conservative leverage

Revenue Growth (YoY)

17.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

0.9%

Modest

Slow profit growth

Dividend Yield

1.43%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹1,483 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

40.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

20.5%

Good

Healthy core-business profitability

Net Margin

18.7%

Good

Strong bottom-line conversion

Current Ratio

3.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.53

Defensive

Steadier than the market

52W Range Position

33%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

4861.8 / 5060.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,641 Cr	₹8,860 Cr	₹10,219 Cr	₹11,950 Cr	+16.1%
EBITDA	₹1,719 Cr	₹2,340 Cr	₹2,743 Cr	₹3,307 Cr	+24.4%
EBITDA Margin	22.5%	26.4%	26.8%	27.7%	—
PAT (Net Profit)	₹1,228 Cr	₹1,721 Cr	₹2,000 Cr	₹2,362 Cr	+24.4%
EPS	₹44.31	₹62.07	₹72.15	₹85.2	+24.4%
ROE	21.3%	26.0%	26.4%	27.9%	—
ROCE	26.7%	32.3%	33.0%	35.0%	—
Total Debt	₹376 Cr	₹127 Cr	₹30 Cr	₹37 Cr	-54.0%
Free Cash Flow	₹658 Cr	₹997 Cr	₹1,457 Cr	₹1,483 Cr	+31.1%

🟢 Revenue has grown at 16.1% a year over 3 years.

🟢 EBITDA has grown at 24.4% a year over 3 years.

🟢 EBITDA Margin has risen from 22.5% to 27.7% over 3 years (+5.2 pts).

🟢 PAT (Net Profit) has grown at 24.4% a year over 3 years.

🟢 EPS has grown at 24.4% a year over 3 years.

🟢 ROE has risen from 21.3% to 27.9% over 3 years (+6.5 pts).

🟢 ROCE has risen from 26.7% to 35.0% over 3 years (+8.3 pts).

🟢 Total Debt has shrunk at 54.0% a year over 3 years.

🟢 Free Cash Flow has grown at 31.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹11,304 Cr

Total Liabilities

₹2,829 Cr

Cash & Equivalents

₹500 Cr

Operating Cash Flow

₹1,734 Cr

Capex

-₹252 Cr

Shareholding (proxy)

Institutional Holding

30.6%

Insider Holding

51.3%

Corporate Actions

Next Earnings

04 Nov 2026

Dividend Rate

₹66

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

15 Buy · 4 Hold · 3 Sell

Target Price (Mean)

₹5,864.23

+27.3% vs CMP

Target Range

₹3,500 – ₹7,177

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive2 mixed3 general

CUMMINS INDIA LTD Option Chain - Live CUMMINS INDIA LTD Option Chain Data, OI & Price

Upstox, 17 Oct

CUMMINSIND Outlook for the Week

Equitypandit, 09 Oct

Income Investors Should Know That Cummins India Limited (NSE:CUMMINSIND) Goes Ex-Dividend Soon

Simply Wall Street, 13 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Cummins India shares fall over 4% as Q1 net profit dips 8% to Rs 543 crore. Buy, sell or hold?

The Economic Times, 06 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Cummins India passes resolution on director commissions via postal ballot

scanx.trade, 17 OctCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Cummins India Ltd. Technical Momentum Shifts Amid Mixed Indicator Signals

MarketsMojo, 18 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Risk

WeakValuation

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you.

All 5 tripwires holding · see Key things to watch ↑