Rs 6,600: that is the target price Motilal Oswal Financial Services kept on Cummins India in a June 9, 2026 company update, along with its BUY rating. The note followed investor meetings with management. Measured against the reported market price of Rs 5,626, the target implies upside of about 17%.
At that price the stock traded at 52.6x FY27E and 43.6x FY28E earnings. The brokerage set its target using an average of a 45x P/E and a DCF valuation built on September 2028 estimates, a choice meant to capture long-term gains from the fastest-growing segments.
Powergen leads, data centres drive it
Motilal Oswal expects balanced growth across Powergen, distribution, industrial operations and exports, backed by a strong installed base, a broad product range and a widening geographical presence. Powergen is the main driver, with demand spread across high-horsepower (HHP) and non-HHP engines.
Non-HHP growth in FY26 came from manufacturing, pharmaceuticals, quick commerce, luxury residential and commercial real estate. HHP growth is increasingly about data centres. The brokerage projects India’s data-centre capacity rising from 1.5 GW in FY26 to 8 GW by FY30, which should create room for both equipment sales and project revenue as colocation operators and hyperscalers add capacity.
Colocation sites mostly want QSK60 nodes, which Cummins India now makes entirely in India. QSK78 and QSK95 nodes will keep being imported for a few years, until volumes justify new production lines. For Powergen, the brokerage forecasts revenue growth of 20% a year (CAGR) from FY26 to FY28.
Distribution, industrial and exports
Distribution should keep its momentum through the installed base, new products, new geographies, RECD installations and telematics for CPCB 4+ products. Maharashtra’s mandate for RECD devices on older CPCB 2 gensets could open another opening, and telematics can be fitted to that older base too. Warranty renewals for CPCB 4+ products start in July 2026. Motilal Oswal forecasts distribution revenue CAGR of 22% over FY26 to FY28.
Industrial is the patchier segment. Mining, marine and railways are growing, while construction and compressors may stay weak in the near to medium term. Those two lines made up about 48% of industrial revenue in FY26. The compressor business is in a weak cycle after three strong years, and road construction is soft even though smart-city projects are growing. The brokerage projects industrial revenue CAGR of 11%.
Exports spread across low-horsepower and HHP engines, with telecom leading the low-horsepower side. Latin America, Europe and Africa are growing steadily. Middle East and Asia-Pacific markets face supply-chain and logistics problems. Motilal Oswal expects a 16% export CAGR but calls the near term patchy.
Numbers and margins
For FY26, Cummins India reported standalone revenue of Rs 12,143 crore, EBITDA of Rs 2,595 crore and adjusted PAT of Rs 2,433 crore. The EBITDA margin was 21.4%.
The brokerage left its estimates unchanged: CAGRs of 18% for revenue, 20% for EBITDA and 21% for PAT over FY26 to FY28. It expects higher pig-iron and steel costs to be passed on to end-users, with product mix absorbing any short-term lag, so FY27 margins stay broadly stable year on year.
Sources
- Cummins India Powergen Growth from Data Centres | Motilal Oswal
- Motilal Oswal Sets Cummins India Target at Rs 6,600
