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Revenue miss offset by strong margins

* Cummins India reported a miss on revenue and EBITDA, while PAT was in line with our estimate.

* Revenue increased 6% YoY to INR24.6b, lower than our estimate due to weak domestic revenue.

* Domestic revenue at INR19.4b grew 1% YoY. We await the segmental details of domestic revenue across powergen (project and product), industrial, and distribution. While exports at INR4.8b grew strongly by 39% YoY. Exports have been continuously moving up since 4QFY24.

* Gross margin at 37.2% saw a 120bp YoY/240bp QoQ expansion, while EBITDA margin for 4QFY25 stood at 21.2%, which was much better than our expectation of 19.1%. This was fueled by a better-than-expected gross margin.

* Absolute EBITDA dipped 5% YoY to INR5.2b, a 5% miss on our estimates.

* PAT declined 7% YoY to INR5.2b, however, it was broadly in line with our estimate of INR5b due to higher-than-expected other income and lowerthan-expected tax rate.

* For FY25, the company’s revenue/EBITDA/PAT surged 15%/17%/15% YoY to INR103.4b/20.7b/19.1b, while margin expanded 30bp YoY to 20%, which was better than the company’s guidance of 19.0-19.5%.

* The company’s OCF/FCF increased 32%/46% YoY to INR16.9b/INR14.6b due to lower net working capital.

* As of 31st Mar’25, the company was debt-free.

* The Board approved a final dividend of INR33.5 per share for FY25 in addition to the interim dividend of INR18 declared on 5th Feb’25.

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