Cummins India shares crash 15% after Q2 net profit falls 19% YoY, margins take 680 bps hit

Shares of Cummins India nosedived as much as 15% to their day’s low of Rs 4,037 on the BSE on Thursday after the company reported a sharp 19% decline in Q2 net profit to Rs 507 crore in the second quarter of FY27 from Rs 622 crore in the same quarter last year.The company’s domestic sales came in at Rs 2,692 crore, up 5% from the year-ago period and down 6% from the first quarter of FY27. Exports revenue increased marginally by 2% year-on-year to Rs 555 crore during the quarter, while registering a 6% sequential growth.

The company’s EBITDA margin contracted sharply to 13.9% in Q2 FY27 from 21% in the corresponding quarter last year, marking a decline of 680 basis points. Meanwhile, standalone revenue from operations grew 4.1% year-on-year to Rs 3,247 crore, compared with Rs 3,121 crore in Q2 FY26.

Adegbile Adewunmi, Managing Director of Cummins India Limited, said domestic demand remained healthy across key markets, supported by data centres, manufacturing, real estate and continued expansion in the distribution business. Exports also registered growth compared with the previous quarter. However, commodity and freight inflation, along with an unfavourable product mix, weighed on margins. The benefits of pricing actions are expected to materialise gradually.

He added that the company remains focused on disciplined order execution, price realisation and cost management while maintaining its commitment to delivering dependable and reliable products to customers.

Looking ahead, Cummins India expects demand across key domestic and export markets to remain steady. However, the operating environment continues to face uncertainties arising from geopolitical developments, inflationary pressures, commodity price fluctuations and changing supply-chain dynamics.

The company said it would continue to prioritise disciplined execution, price realisation, cost control and operational efficiency while closely tracking external developments. Supported by a healthy balance sheet and a stable cash conversion cycle, it remains focused on prudent capital allocation, disciplined execution and cost management.

Cummins India added that its established technologies, experienced workforce, trusted brand, relevant product portfolio, manufacturing capabilities and extensive distribution and service network continue to support its commitment to creating long-term value for customers and shareholders.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here