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Cummins India margins slide as costs rise, pricing actions in focus
Standalone EBITDA fell 1.2% year-on-year to ₹616 crore in Q1FY27, while gross margin contracted about 350 basis points to 33.5% despite revenue rising 18% to ₹3,426 crore.
Cummins India is facing profitability pressure despite steady demand, with rising input costs and competition weighing on margins. In Q1FY27, the engine maker saw standalone EBITDA decline 1.2% year-on-year to ₹616 crore, even as revenue rose 18% to ₹3,426 crore.
Gross margin contracted by about 350 basis points year-on-year to 33.5%, reflecting sharp increases in raw material costs and other expense categories. The company said it implemented a price hike in early July and plans additional actions depending on customer response.
Exports, which account for about 15% of revenue, fell marginally by 0.4% and marked the second straight quarter of decline amid geopolitical headwinds. Cummins also said it has secured board approval for related-party transactions worth ₹3,000 crore for FY27, 56% higher than FY26 approvals, and that actual related-party sales have been running above approved levels over the past two years.
Management transition is also underway, with managing director Shveta Arya resigning effective 31 August. Nomura Global Markets Research said margin recovery will depend on the company’s pricing action and the inflationary environment, revising its FY27 EBITDA guidance down 1% while lifting its revenue projection by 4%.