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Strong start to the year with beat across all parameters

• Cummins India reported a strong result in 1QFY26, with a beat on all parameters.
• Revenue increased 26% YoY to INR29.1b, beating our estimate by 9%.
• Domestic sales at INR23.4b grew 25% YoY/21% QoQ, whereas export sales rose 34% YoY/9% QoQ to INR5.2b. Exports have been continuously increasing since 4QFY24.
• Gross margin at 37.0% contracted 80bp YoY/20bp QoQ. However, lower employee costs and other expenses led to EBITDA margin expansion of 110bp YoY/20bp QoQ to 21.4%. This was higher than our expectation of 20.1%, which was already above the Street’s expectation of 19%.
• Absolute EBITDA rose 33% YoY/20% QoQ to INR6.2b, a 17% beat to our estimate.
• Adj. PAT increased 32% YoY to INR5.6b (13% above our estimate). During the quarter, the company had an exceptional gain of INR442m related to the sale of 100% stake in its wholly owned subsidiary, Cummins Sales & Service Private Limited (CSSPL). This is included in the reported PAT of INR5.9b.

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