Cummins India Shares Rise on Strong Growth Forecast
Cummins India Ltd. shares rallied more than 2% Monday after its parent, Cummins Inc., US, projected revenue growth of 10% for the Indian arm in 2024, largely due to high demand for electricity generation. At the same time, the global power generation firm said it planned to invest a total of $200 million on manufacturing sites, including India.
Cummins Inc. reported better-than-expected fourth-quarter results, driven by robust power demand from data centers of major tech firms. The company, however, expects annual sales to decline in North America due to slow demand in the heavy-duty truck segment.
"In India, we expect total revenue, including joint ventures, to rise 10% in 2024, primarily driven by stronger power generation demand", said Jennifer Rumsey, Chairman & CEO, Cummins Inc.
The company is expanding capacity to meet surging electricity needs, investing heavily in the U.S., the U.K., and India. The company said it is currently in the middle of a $200 million investment in its Seymour and Minnesota plants, the U.K., and India to ramp up capacity.
Meanwhile, the heavy and medium truck segment of India is said to have mixed demand in 2025 as per the projections by Cummins, but the estimates range from decline of 5% to rise of 5%.
Cummins' growth drivers have primarily been on account of the rapid expansion of AI infrastructure, with a projected 5-15% growth in its revenue in the global power generation market.
India's electricity consumption rose 45.8% to 1,395 kWh per capita between 2013-14 and 2023-24. Government data also indicate that the country's total installed power generation capacity has increased to 457 GW as of November 2024.
Though it shows a huge growth today, the stock of Cummins India has dived nearly 10% year-to-date. As such, however, it has risen by 24% over the past year and has a market capitalization of more than Rs 81,000 crore.
