Cummins India Share Price Rises 3% Post Q4 Results, ₹33.50 Dividend Announcement: Do You Own?

Mumbai, May 29, 2025 – Shares of Cummins India Ltd surged by nearly 3% in early trade on Thursday, a day after the company announced robust Q4 FY25 earnings coupled with a final dividend of ₹33.50 per share. The stock climbed to an intraday high of ₹2,762 on the NSE, reflecting investor enthusiasm on the back of strong financial performance and shareholder rewards.

Strong Q4 Performance Boosts Sentiment

Cummins India reported a standalone net profit of ₹405 crore for Q4 FY25, a 22% year-on-year increase compared to ₹332 crore in the same quarter last year. Revenue from operations stood at ₹2,375 crore, registering a growth of 15% YoY, driven by robust demand in domestic and export markets.

According to the company, growth was mainly supported by strong sales across power generation, industrial, and distribution segments, with domestic sales rising 18% YoY and export sales posting a modest 6% gain.

“We have seen consistent momentum in key sectors such as infrastructure and manufacturing, which has led to strong order inflows,” said Anjali Bansal, Independent Director, Cummins India. “Our diversified portfolio and localization efforts continue to support profitability despite global uncertainties.”

₹33.50 Dividend Signals Strong Cash Position

In a significant announcement, Cummins India’s board recommended a final dividend of ₹33.50 per equity share for FY25. This brings the total dividend payout for the year to over ₹47 per share, including interim dividends already paid.

This substantial payout indicates a strong cash position and reflects management's confidence in future earnings.

“Dividend yields like these reinforce Cummins India's reputation as a consistent value creator,” said Rajesh Shah, Senior Analyst at Angel One. “Such a high dividend payout is rare in the engineering sector and makes the stock attractive not just for growth investors but also for income-focused ones.”

Market Context and Peer Comparison

Cummins India’s performance comes amid a positive phase for the capital goods and engineering sector. The ongoing government focus on infrastructure, manufacturing expansion through PLI schemes, and private capex recovery have all contributed to tailwinds for the sector.

In comparison:

• Thermax Ltd saw a 12% YoY rise in Q4 profit.

• ABB India also reported strong margin expansion and a 15% jump in orders.

• Bharat Heavy Electricals (BHEL) turned profitable in Q4 after several subdued quarters.

Cummins India’s continued market leadership in diesel and gas engines and its early bets on green technologies like hydrogen fuel cells give it a unique edge among peers.

Analyst Views: Is the Stock a Buy?

The stock has gained nearly 18% in the last six months, significantly outperforming the Nifty 50 and Nifty Industrials indices.

“We maintain a BUY rating with a revised target of ₹2,900,” said Megha Jain, Lead Capital Goods Analyst at ICICI Securities. “The company’s strong balance sheet, high ROE, and consistent dividend payout make it a core portfolio stock.”

However, she also cautioned that input cost pressures and global supply chain constraints remain key monitorables.

Motilal Oswal and HDFC Securities also have positive outlooks, citing long-term growth levers such as:

• A growing focus on energy efficiency

• Increasing share of high-margin products

• Opportunities in data center and railway electrification segments

Investor Outlook: Should You Own Cummins India?

With a market capitalization now exceeding ₹76,000 crore, Cummins India remains one of the top picks in the mid-to-large-cap engineering space. The combination of earnings visibility, strong order backlog, debt-free status, and generous dividend policy makes it an appealing proposition for long-term investors.

Retail and institutional investors are particularly bullish on its ability to scale in new energy technologies, including hybrid systems and alternate fuel engines.

Verdict:
For investors seeking a blend of steady returns, dividend income, and exposure to India's infrastructure growth story, Cummins India offers a compelling case. While short-term volatility may persist due to macro uncertainties, the long-term fundamentals remain strong