Cummins India Posts Strong July-September on Data Centre Push

Cummins India Ltd. reported a solid July-September 2025-26 with data centre demand driving most of the gains, while exports and distribution also delivered steady growth. The only drag was the industrial segment, which felt the impact of the monsoon. Order inflows were healthy and broad-based across sectors, supported by demand for backup power across all horsepower categories. Aftermarket services continued to grow off both CPCB-II installed base and newer CPCB-IV products.

The market reacted positively to the revenue and earnings beat, although management cautioned that the quarter had some lumpiness due to the execution of a large hyperscale project. They also flagged that similar project revenues are unlikely to repeat in July-December 2025-26 and warned of a likely export slowdown in October-December 2025-26 as customers work through inventory.

Standalone revenue rose 27% year-on-year to ₹31.2 billion in July-September 2025-26. The power generation segment grew 50% year-on-year, with data centre projects making up 40% of PG revenue. PG excluding data centres rose 20%. Exports were up 24% year-on-year to ₹550 crore, supported by traction in Europe, Latin America and West Asia.

Distribution revenue increased 21% year-on-year, while the industrial segment slipped 5%. Operating profit rose to ₹6.9 billion, with margin expanding to 21.9%. Adjusted net profit grew 41.5% year-on-year to ₹6.4 billion, helped by higher other income.
PG is expected to grow at a healthy clip through 2025-26, led by data centres, real estate and quick commerce, although the pace may moderate. Hyperscale data centre orders remain lumpy and typically depend on site clearances, with execution timelines of one to two years.

Data centres contributed 25 to 30% of PG revenue in January-June 2025-26, largely driven by one big hyperscale project. Industry watchers note that colocation makes up around 90% of India’s data centre market, with hyperscalers at only 8 to 10%.
Industry players say hyperscale demand is cooling relative to colocation and Chinese players are stepping up competition. Cummins is working to improve lead times and expand capacity for data centre-related demand.

A slowdown in hyperscale projects could weigh on growth, though PG revenue excluding data centres still grew 20%. Management expects double-digit growth in 2025-26 despite potential weakness in exports. Beyond data centres, demand remains firm across infrastructure, manufacturing, airports and healthcare. The industrial segment could pick up through railway orders, and construction and mining should improve after the monsoon.