Cummins India Q4 FY26 Results Analysis: PAT Jumps 22.7%, ROE Expands to 29.5%

Cummins India Ltd's Q4 FY26 numbers came in strong, with revenue of Rs. 3,011.18 Cr (+21.90% YoY) and PAT growth of +22.70% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Cummins India delivered 21.9% YoY revenue growth and 22.7% PAT growth in Q4 FY26, meeting its own double-digit growth guidance for FY16.9%. Operating leverage of 220bps in FY26, debt-free balance sheet, and ROE expansion to 29.5% demonstrate superior capital goods execution. However, working capital deterioration with OCF/PAT at 0.74x and pending regulatory orders warrant monitoring.

Key Investment Insights

Key Positives

• Revenue grew 21.9% YoY to Rs.3,011 Cr in Q4 FY26
• PAT grew 22.7% YoY to Rs.649 Cr in Q4 FY26
• FY26 revenue growth of 16.9% met management's double-digit guidance
• 220 bps positive operating leverage in FY26 (expenses +14.7% vs revenue +16.9%)
• EBITDA margin expanded 40 bps YoY to 25.3% in Q4
• Net profit ratio improved 80 bps YoY to 19.2% for FY26
• ROE improved 230 bps YoY to 29.5%
• Company remains debt-free with strong cash balance of Rs.2,374 Cr

Risk Factors

• OCF/PAT ratio of 0.74x indicates earnings quality concern due to working capital drag
• Trade receivables grew Rs.445 Cr, outpacing revenue growth and tying up cash
• Q4 revenue declined 1.4% QoQ confirming lumpy execution pattern flagged by management
• GST penalty orders of Rs.232.73 Cr and income tax demands of Rs.45.82 Cr received in March 2026