Motilal Oswal reiterates Buy call on Cummins India
Motilal Oswal Financial Services reiterated its Buy rating on Cummins India Ltd and set a target price of Rs 6,400, implying roughly 23% upside from the prevailing share price of about Rs 5,190. The brokerage's note, dated August 25, 2026, ties the constructive call to the company's positioning as a supplier of high-horsepower engines for hyperscale data centers, alongside continuing demand from railways, defense, mining, marine and exports to Europe and Asia Pacific.
Data-center engines cited as the central growth driver
The report frames infrastructure spending, particularly the power-generation requirements of data centers, as the principal tailwind for Cummins India. The company is supplying locally manufactured QSK60 units alongside imported QSK78 and QSK95 models to meet hyperscale data center loads, with Motilal Oswal pointing to data-center demand and industrial-segment order books as the basis for its positive stance.
Margin pressure from raw materials tempers earnings outlook
Counterbalancing the demand story, the brokerage flagged a sharper near-term hit on profitability. In the quarter ended June 2026, Cummins India reported revenue of Rs 3,426 crore, up 18% year on year, while standalone net profit fell 7.9% to Rs 543 crore. Standalone gross profit margins contracted by roughly 350 basis points year on year in the first quarter of fiscal 2027, which Motilal Oswal attributed to rising raw-material costs. The brokerage said it has moderately trimmed its earnings estimates for fiscal years 2027 through 2029 to factor in those input-cost pressures.
Managing Director's resignation adds a leadership watchpoint
Adding a watch-item for investors, current Managing Director Shveta Arya tendered her resignation, with her tenure set to end on August 31, 2026. Motilal Oswal did not name a successor, leaving the succession plan and any continuity of strategy as an open question for the stock. Investors also await the company's ability to pass on rising raw-material costs to customers, the pace of data-center order execution, and any further commentary from the new leadership team.
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