Cummins India Shares Tumble 14% As Q2 EBITDA Falls To ₹507 Crore, Misses ₹690 Crore Estimates; Net Profit Also Disappoints

Cummins India shares took a sharp beating on Thursday, 5 November, after the company's September quarter numbers fell well short of market expectations. The stock dropped as much as 14% during the session, with investors reacting to a steep fall in operating profit and a sharp squeeze in margins.

Standalone revenue from operations increased just 4.1% year-on-year to ₹3,301 crore in Q2 FY27. The company had reported revenue of ₹3,171 crore in the same quarter last year. Analysts, however, were expecting revenue of ₹3,536.5 crore.

The gap was much wider at the operating level. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to ₹507 crore from ₹695.75 crore a year ago, a decline of 27.13%. The analyst estimate stood at ₹690 crore.

Net profit also came in lower. Cummins India reported a profit after tax of ₹467 crore for the quarter, down 26.69% from ₹637 crore in Q2 last year. Analysts had expected a figure of ₹625.5 crore.

Cummins India Q2 Results: EBITDA Margin Falls To 15.36%

The margin numbers were among the weakest parts of the results. EBITDA margin slipped to 15.36% in the September quarter from 21.94% a year ago. That is a contraction of 658 basis points.

The market had expected a margin of 19.51%. The reported figure missed that estimate by more than four percentage points.

Cummins India attributed the pressure to higher commodity costs. Freight expenses also increased during the quarter, while a change in product mix added to the pressure on margins.

The company's sales figures offered little cushion against the decline in profitability. Domestic sales grew 5% to ₹2,692 crore, while exports increased only 2% to ₹555 crore. Both segments recorded modest growth compared with the sharp fall in operating earnings.

Cummins India Shares Performance

At 01.05 PM, Cummins India share price stood at ₹4,150.5 apiece on the National Stock Exchange (NSE), down 12.18%. The day's decline has taken Cummins India's year-to-date loss to around 8%.

The earnings call will now be closely watched for management's assessment of the cost increase and the margin outlook.

Investors will want to know whether commodity and freight expenses are likely to remain elevated, and how soon margins could recover from the September quarter levels.

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