Cummins India Q4 Results: 5 Important Highlights Investors Should Know

Añadido: 2026-05-31

[00:00:00]We have Shweta Arya who's the managing director of Cummins India joining in. Shweta, good to have you on NDTV Profit and of course good set of numbers. It beats the estimates.

[00:00:13]How long can you sustain the kind of momentum that you have seen which is backed by first domestic play and infrastructure play? For this particular year, given the challenging and uncertain times, are you seeing any discomfort or are these kind of numbers really sustainable for this year and the present quarter?

[00:00:35]>> Thank you.

[00:00:36]Thank you for congratulating us and for the question.

[00:00:39]Definitely [clears throat] demand, as you rightly said, backed by domestic demand and the infrastructure play in the country. We have not seen the demand dwindle yet. Specifically in our power generation segment, railways, mining, our distribution business. We are seeing steady demand now and for the future quarters. We are cautious though because the macroeconomic environment is yet to play out completely. Commodity prices have been on the increase. Fuel shortages is something our suppliers have been grappling with and there are labor shortages at the supplier ends as well. So from a supply perspective, there are certain challenges and the broader macroeconomic environment, just like others in the industry, we are watching. So we are cautious at this point in time although the demand indicators still look good.

[00:01:30]>> Right. So demand indicators are looking good but Shweta, like all exporters, in the current scenario, you know, exports have fallen and that's a challenging time as well. What is the visibility for this year? Are there alternate, you know, measures? Also price discovery, new price discovery as per the higher transportation cost. All those, how are they really working out and what would be your view when it comes to exports coming back?

[00:02:01]>> Exports are challenging.

[00:02:03]The situation right now is not helping exports either.

[00:02:06]For example, we have very broad-based exports to Africa, Middle East, Latin America, Europe, Asia Pacific. But we have seen challenges in specifically the Africa Middle East market and we don't see that coming back yet. On the other hand, Europe and Asia Pacific markets have been doing okay and we have of course been navigating these challenging times by making sure we do corrections in whichever areas we need to as an organization. So yes, challenging times ahead depending on which pocket you're exporting to.

[00:02:41]>> Right, when we talk about your EBITDA margin, that has been flattish on a YOY basis, Shweta. How are you estimating that really panning out for this new financial year?

[00:02:56]>> Although the EBITDA margins have been flat, we see that in the current environment that was there in the quarter gone by, these are good results. We have managed the costs well. Product mix played in our favor.

[00:03:10]So going forward, we do see product mix staying pretty much in the similar range.

[00:03:19]Commodity prices increasing will pose a challenge although we do try to pass it on onto the market. It remains to be seen how the commodity movement happens going forward.

[00:03:30]>> Right, so give us a little perspective on what are the cost pressures because of the uncertain market condition currently that you're really foreseeing and how much of an impact that really can cause to your operational performance and efficiency.

[00:03:48]>> The cost pressures are around the commodity prices increasing. Copper has been on the rise, aluminum has been on the rise, and now there are also issues in terms of a supply of certain very rare materials that we use in our engines.

[00:04:04]Uh Add it to that, labor shortages at our supply chain for our suppliers was challenging.

[00:04:12]Although, we see that as a slightly shorter term issue, hopefully get will get resolved in another quarter or so.

[00:04:19]But, then there are also fuel cost increases that our suppliers have seen.

[00:04:23]Uh because, uh you know, LPG and moving to alternate fuels. Of course, shipping and container prices increases, lead time increases for our suppliers. So, these are the challenges uh which are likely to impact. We are navigating those. We are trying to build in more and more efficiency into our product, pack in more power into our product, so that finally when the product lands at the customer end, we are able to manage those costs. How long is that possible?

[00:04:53]Uh remains to be seen given the fact that uh we still see commodities increasing and fuel prices increasing continuously.

[00:05:00]>> That's right, uh Shweta. And this has become a new normal. And uh you've already crossed like half of this particular first quarter. So, in terms of visibility, is it safe to say that the cost pressures, despite all your operational efficiencies uh and even strong demand that you're still seeing, uh despite all that, uh it will really offset a large part of gains that really come from these two levers when it comes to the cost inflation on the ground and uh therefore the margin could be worse than what you had uh done in the previous quarter?

[00:05:34]>> I would not say that. You did mention two of those cost. We are managing and then commodities going the other way.

[00:05:41]Uh but, there's another thing which is product mix and demand, which helps us leverage our fixed cost really well.

[00:05:48]That's the third thing at play. So, will margins absolutely go down? Uh not really. They will be challenged, but we have those two other factors, which is our own cost control and capturing the demand and executing well, which helps us leverage our fixed cost better. Those two are in our favor when commodity is the other way.

[00:06:07]>> All right. And uh Shweta, if you really look at the near term, the next few quarters, what are the other challenges besides the cost inflation as well as transportation cost, fuel costs that you are really foreseeing in terms of the on-ground demand, the ability of the people to pay because of the various pressure points now on various sectors that you cater to? And the second, also the kind of monsoon uh impact on El Nino impact on the overall economy. How do you put the challenges and give an outlook for the next few quarters?

[00:06:43]>> I I divide the market into some segments. So, for the power generation segment, as we call the high horsepower segment, which could be data centers or manufacturing or mission-critical segments, we do not see a very large impact on these segments due to the factors that you mentioned. But below those ranges, where there is quick commerce, uh you know, they could be residential reality, commercial reality, hospitals, many of those other uh there, we could see projects getting delayed if some of these uh you know, things play out. Not monsoons, but more inflation. So, we could see impact.

[00:07:26]Right now, we are not seeing that, but that is a possibility. Then on the other side, where our customers are mostly government customers, railway projects, mining projects, some of those orders have already come in. So, it depends really how well we can execute. So, no impact on that. Going forward, if the government decides to slow down on their ordering, we will see that impact maybe 6 to 8 months down the line, not in the next 6 months. And then there is the construction segment, which definitely gets impacted by monsoons.

[00:07:59]Uh negatively. So, construction segment, compressor segment, they will get impacted. So, that is broadly how we see it.

[00:08:06]>> All right. So, Shweta Arya, thank you so much for joining us and giving a lot of guidance and perspective into the sectors you cater to. And of course, operational efficiency as well as the margin play in product mix changes.

[00:08:20]That's what is really keeping the momentum going despite the high cost pressure. And that's what Shweta is also guiding for the future. All the best for this quarter, Shweta. Thanks so much for joining in.