Data centre demand is emerging as a major long-term growth driver for Cummins India, according to a report by Mirae Asset Sharekhan, which has maintained a ‘Buy’ rating on the company with a target price of Rs 6,700 per share. Cummins India shares were at around Rs 5,700 in the afternoon trade on June 2.
The brokerage highlighted that the company is witnessing strong demand across data centres, healthcare, infrastructure and real estate segments. It believes Cummins’ established presence and competitive positioning in the data centre power solutions market could support sustained growth over the coming years.
“Cummins’ competitive position in the data centre business, coupled with its status as a fully integrated player, makes the segment a long-term growth driver,” the brokerage said. It expects the company to deliver revenue and profit after tax (PAT) CAGR of 17% and 16%, respectively, between FY2025 and FY2028.
Management commentary during the earnings call underscored the growing opportunity in the data centre segment. The company noted that high-horsepower generator sets are being deployed extensively by both co-location operators and hyperscale data centre players. While management remained cautious on supply chain challenges and commodity price volatility, it expressed confidence in the strong demand outlook from data centres.
Cummins India reported a strong set of Q4FY26 results, surpassing analyst estimates across key parameters. Revenue grew 23% year-on-year, supported by robust performance in the power generation and distribution businesses. Operating profit rose 24%, while operating margin improved by 17 basis points to 21.3%. Net profit increased 25% year-on-year to Rs 649 crore.
The company also reported aggressive competition in the power generation segment. Export sales declined 6% year-on-year as demand remained uneven across international markets. In the energy storage segment, Cummins has launched 10-foot and 20-foot containerised Battery Energy Storage System (BESS) solutions and is receiving significant customer enquiries, although order conversion remains slow.
The industrial business remained largely stable, growing 1% year-on-year to Rs 381 crore. Demand from railways, metals and mining sectors remained healthy, while the compressors and construction segments continued to show stable performance.
Mirae Asset Sharekhan cautioned that rising input costs and intense competition across business segments could impact margins. However, it believes strong demand visibility, particularly from the rapidly expanding data centre sector, supports the company’s long-term growth outlook.
