Cummins India margin falls as costs outpace revenue growth
Operating profit declined despite +17.86% YoY revenue growth, while other income and a lower tax rate supported net profit.
Filed 05 Aug 2026, 17:02 IST · after market close · Cummins India Ltd (CUMMINSIND)
Key takeaways
- Consolidated operating margin fell 3.47 percentage points YoY to 17.98% as expenses grew +23.06%, faster than revenue at +17.86%.
- Net profit increased only +0.89% YoY because other income contributed 28.87% of profit before tax and the tax rate declined 0.48 percentage points.
- Cummins India's 17.98% operating margin remained 3.48 percentage points above the 14.5% median for 52 reported Industrials peers.
Price around the results
Revenue growth did not lift operating profit
Consolidated revenue grew +17.86% YoY and +13.78% QoQ, but operating profit fell -1.18% YoY and -4.05% QoQ. The weaker operating conversion was also visible sequentially: revenue rose, while operating profit declined from Rs 642.15 cr to Rs 616.16 cr. Profit before tax was broadly flat YoY at +0.28% but fell -7.62% QoQ.
Cost growth drove the margin compression
Expenses grew +23.06% YoY against revenue growth of +17.86%, narrowing operating margin by 3.47 percentage points; sequentially, the gap was +18.61% expense growth versus +13.78% revenue growth, cutting margin by 3.35 percentage points. Interest expense also increased +47.17% YoY and +60.49% QoQ. Other income accounted for 28.87% of profit before tax, while the tax rate fell 0.48 percentage points YoY and 1.19 percentage points QoQ, cushioning reported net profit.
Margin fell after a brief Q4 recovery
Operating margin had risen to 21.92% in Q2FY26 from 21.45% in Q1FY26, then declined to 20.77% in Q3FY26 and recovered to 21.33% in Q4FY26. The latest 17.98% is therefore a sharper setback than the prior quarter's movement. Even after the decline, Cummins India's margin was 3.48 percentage points above the 14.5% median among 52 Industrials peers that had reported.
No market reaction yet after the post-close filing
In the stock's last eight results-related moves, seven were positive and one was negative, with a median absolute move of 4.5%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,426 cr | ₹3,011 cr | +13.78% | +17.86% |
| Other income | ₹227 cr | ₹263 cr | -13.66% | +7.28% |
| Expenses | ₹2,810 cr | ₹2,369 cr | +18.61% | +23.06% |
| Operating profit | ₹616 cr | ₹642 cr | -4.05% | -1.18% |
| Operating margin (%) | 17.98% | 21.33% | — | — |
| Interest | ₹4 cr | ₹2 cr | +60.49% | +47.17% |
| Depreciation | ₹53 cr | ₹51 cr | +2.94% | +9.72% |
| Profit before tax | ₹787 cr | ₹852 cr | -7.62% | +0.28% |
| Tax | ₹178 cr | ₹202 cr | -12.23% | -1.79% |
| Net profit | ₹609 cr | ₹649 cr | -6.18% | +0.89% |
| EPS (₹) | ₹21.98 | ₹23.43 | -6.19% | +0.87% |
Operating margin of 17.98% compares with a Industrials sector median of 14.50% across 52 peers that have reported Q1FY27.
What to watch
- Whether expenses continue to grow faster than revenue after +23.06% versus +17.86% YoY.
- Whether operating margin recovers from 17.98% after the 3.47-percentage-point YoY decline.
- Whether other income's contribution to profit before tax remains near 28.87%.