Cummins India Q2 Profit Falls 18.5% Despite 4.1% Revenue Growth

Cummins India Ltd reported an 18.5% year-on-year decline in consolidated net profit to Rs 507.17 crore in the second quarter, even as revenue from operations rose 4.1% to Rs 3,301.21 crore, as higher material, employee and other expenses outpaced revenue growth.

Quarterly Performance

Total income rose 4.4% to Rs 3,438.44 crore. Profit before tax fell 22.2% to Rs 641.23 crore from Rs 824.03 crore, and earnings per share fell to Rs 18.30 from Rs 22.45.

Material consumption rose 17.4% to Rs 2,118.32 crore, employee benefits expense rose 18.2% to Rs 234.83 crore, and other expenses rose 20.6% to Rs 318.98 crore. Depreciation rose 9.7% to Rs 53.93 crore, and finance costs rose to Rs 3.00 crore from Rs 2.55 crore. The filing does not state the reasons for the increase in costs.

Revenue for the six months rose 10.7% to Rs 6,727.22 crore, while profit before tax fell 11.2% to Rs 1,428.07 crore. Net profit fell 8.9% to Rs 1,116.47 crore, and earnings per share fell to Rs 40.28 from Rs 44.24.

Engines and Lubes

Engines sales rose 10.7% to Rs 6,622.40 crore in the half year, while segment profit before tax fell 12.7% to Rs 1,362.44 crore. Second-quarter engine profit before tax fell to Rs 621.36 crore from Rs 804.51 crore.

Lubes sales rose 49.1% to Rs 2,017.93 crore, and segment profit before tax rose 35.5% to Rs 176.44 crore. Second-quarter Lubes profit before tax was Rs 53.66 crore, against Rs 52.59 crore a year earlier and Rs 122.78 crore in the first quarter.

The Lubes segment comprises Valvoline Cummins Pvt Ltd, a 50:50 joint venture, and the segment table reports its full figures, not Cummins India’s share.

The company’s share of profit from its joint venture and associate rose about 17% to Rs 144.49 crore in the half year, from Rs 123.48 crore.

Net cash from operating activities rose 37.5% to Rs 1,020.75 crore in the half year, from Rs 742.42 crore. Cash generated from operations was Rs 1,315.01 crore, against Rs 1,042.15 crore. Receivables contributed Rs 110.26 crore and payables Rs 257.21 crore, while inventory absorbed Rs 186.15 crore.

Dividend payments rose to Rs 1,272.66 crore from Rs 928.62 crore. Financing outflow rose to Rs 1,281.04 crore from Rs 934.61 crore.

Inventory rose about 16% to Rs 1,354.60 crore from March 31, 2026. Investments rose about 37.5% to Rs 2,129.48 crore. Cash and cash equivalents fell to Rs 166.27 crore from Rs 500.01 crore, while other bank balances were Rs 1,462.48 crore, against Rs 1,874.06 crore.

The company recorded a net expense of Rs 94.20 crore for FY26 from the implementation of four labour codes, classified as an exceptional item. The impact on its joint venture and associate was a net expense of Rs 8.36 crore. 

Cummins India sold its entire stake in Cummins Sales & Service Pvt Ltd, which ceased to be a subsidiary on April 1, 2025. The sale produced exceptional gains of Rs 44.15 crore in standalone results and Rs 12.59 crore in consolidated results in the comparative periods, which affects YoY comparisons.