Cummins India share price target raised on data centre opportunity; details here
π Citi raised its price target for Cummins India shares to βΉ6,700 following a March quarter profit beat driven by hyperscale data centre deliveries.
πΌ Jefferies maintained a 'Buy' rating and increased its target price to βΉ7,100, citing robust domestic demand and rising data centre contributions.
π HSBC reiterated a 'Buy' rating with a target of βΉ6,500, noting nearly 20% quarterly profit growth fueled by power generation and distribution businesses.
π Macquarie retained an 'Outperform' rating at βΉ5,750, highlighting 23% year-on-year revenue growth led by a 30% surge in the domestic market.
β οΈ UBS maintained a 'Sell' rating with a target of βΉ3,500 due to valuation concerns despite quarterly performance exceeding analyst estimates.
π Kotak Institutional Equities downgraded the stock to 'Reduce' with a target of βΉ5,600, noting market share losses in certain power generation segments offset by data centre revenue.
π Exports declined 6% amid geopolitical uncertainties, though management remains optimistic about export growth normalizing over time.
π Input cost pressures weighed on gross margins, but brokerages expect sustained distribution growth and localisation to support future earnings.
π Citi highlighted strengthened hyperscaler and colocation demand alongside resilient non-data centre power generation from multiple end-market drivers.
π Jefferies identified three key margin drivers: higher distribution share post-CPCB emissions upgrade, data centre demand, and component localisation.
π HSBC expects a 20% earnings CAGR between FY26 and FY29 driven by data centre demand, distribution growth, and export recovery.
π Macquarie noted that while input costs impacted margins, the domestic market's 30% growth significantly outpaced the overall revenue increase.
π Kotak acknowledged that rising data centre-linked revenue helped offset market share losses in specific power generation segments.
π° Brokerages largely attributed the earnings beat to robust domestic demand and continued strength in the distribution business.
β οΈ Concerns around exports persisted despite strong performance in other segments, with some brokerages citing valuation issues.
π The article was published on June 1, 2026, noting that shares traded lower on Monday despite positive brokerage revisions.
π Citi emphasized the benefits of higher localisation levels and expects the distribution business to provide additional growth tailwinds.
π UBS maintained its target price at βΉ3,500 even as revenue, profit, and margins came in ahead of estimates.
π Kotak said results reinforced Cummins India's ability to capitalize on improving macroeconomic conditions and pass on cost increases.
π The data centre segment is identified as a key growth opportunity driving both demand and margin expansion across multiple brokerages.
- Citi reported that profit for the March quarter exceeded expectations, driven by higher deliveries to hyperscale data centre customers.
- Both hyperscaler and colocation demand have strengthened, while non-data centre power generation demand remains resilient due to multiple end-market drivers.
- Jefferies maintained its 'Buy' rating and raised its target price to βΉ7,100, citing robust domestic demand and rising contributions from the fast-growing data centre segment.
- Jefferies raised its FY27 and FY28 earnings estimates by 5% to 7%, signaling confidence in future growth.
- HSBC reiterated its 'Buy' rating and increased its target price to βΉ6,500, highlighting strong growth in power generation and distribution businesses.
- HSBC expects data centre demand, sustained distribution growth, and a recovery in exports to support an earnings CAGR of around 20% between FY26 and FY29.
- Macquarie retained its 'Outperform' rating with a target price of βΉ5,750, noting that revenue rose 23% year-on-year during the quarter.
- Revenue growth was led by a 30% increase in the domestic market, demonstrating strong local demand.
- Citi highlighted the benefits of higher localisation levels and expects the distribution business to provide additional growth tailwinds.
- Kotak Institutional Equities acknowledged that the quarter surpassed consensus expectations and reinforced Cummins India's ability to capitalise on improving macroeconomic conditions.
- Shares of Cummins India Ltd. were trading lower on Monday, June 1, despite several brokerages raising their earnings estimates and price targets following the company's stronger-than-expected March quarter performance.
- UBS retained its 'Sell' rating with a target price of βΉ3,500, citing valuation concerns even as revenue, profit and margins came in ahead of estimates.
- Kotak Institutional Equities downgraded the stock to 'Reduce' with a target price of βΉ5,600, noting that data centre revenue growth only offset market share losses in certain power generation segments.
- Exports declined 6% amid geopolitical uncertainties, weighing on overall performance despite strong domestic demand.
- Input cost pressures weighed on gross margins, although management remains optimistic that export growth will normalise over time.