Cummins India Ltd (NSE: CUMMINSIND) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Shveta Arya — Managing Director
Analysts:
Unidentified Participant
Parikshit Kandpal — Analyst
Nitin Arora — Analyst
Umesh Raut — Analyst
Mohit Kumar — Analyst
Jason Soans — Analyst
Ruchit Agrawal — Analyst
Amit Anwani — Analyst
Rahul Gajare — Analyst
Chandrakant Kanase — Analyst
Saif Sohrab Gujar — Analyst
Harshit Kapadia — Analyst
Aditya Mongia — Analyst
Anupam Goswami — Analyst
Pulkit Patni — Analyst
Presentation:
operator
Good morning ladies and gentlemen. Welcome to commence India Limited Q1 FY2526 earnings conference call. We hope you all are keeping safe and healthy. As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after the commentary concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch tone phone.
I will now hand the conference to Ms. Shweta Arya, Managing Director Commence India Limited. Thank you. And over to you Ms. Arya.
Shveta Arya — Managing Director
Good morning ladies and gentlemen. Hope you and your family are doing well and are staying healthy. Welcome to The Cummins India Limited Quarter 1 2020-05-26 Earnings Conference Call. I am Shweta Arya, Managing Director of Cummins India Limited. Joining me on the call today is Soma Ghosh, Chief Financial Officer of Cummins India Limited. Thank you all for joining us today on this call. Now I would like to share the financial results of Quarter 1 FY26 for the quarter ended June 30, 2025. With respect to the same quarter last year our sales at 2,859 crores were higher by 26% compared to 2,262 crores recorded in the same quarter last year.
Domestic sales at 2,336 crores are higher by 25%. Exports at 523 crores are higher by 34%. Profit before tax at 726 crores is higher by 32%. Profit before tax after exceptional items at 770 crores is higher by 40% for the quarter ended June 30, 2025. With respect to the last quarter, our sales at 2,859 crores are higher by 18% compared to 2,414 crores recorded in the last quarter. Domestic sales at 2,336 crores Are higher by 21%. Exports at 523 crore are higher by 9%. Profit before tax before exceptional items at 726 crores is higher By 7%.
And profit before tax after exceptional items at 770crores is higher by 13%. The segment wide sales breakup for the quarter ended June 30, 2022. As I will speak now, Power Gen domestic Sales were at 1056 crores 31% increase over last year and 21% increase over last quarter. Distribution business sales were at 777 crores, 19% increase over last year and 23% increase over last quarter. Industrial domestic business sales were 418 crores, 12% increase over last year and 10% increase over last quarter. High horsepower exports were 257 crores, 27% increase over last year and 18% increase over last quarter.
Low horsepower exports were 225 crores, 46% increase over last year and 5% increase over last quarter. While we continue to monitor the geopolitical uncertainty around global tax and trade policies, India’s economy remains stable, remaining cautiously optimistic. We anticipate having double digit growth in the full year 2025 26. I now open the session for questions.
Questions and Answers:
operator
Thank you very much ma’a m. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. First question is from the line of Parikshit Kanpal from HDFC Securities. Please go ahead.
Parikshit Kandpal
Congratulations on a great quarter and great numbers on the board. My first question is on you have introduced the best solution in India. So just wanted to understand are you going to set up a manufacturing footprint? How are you going to set up the supply chain and have you already started booking orders? What kind of TAM does this address and any risk can it cannibalize our existing business? Any flavor on the best opportunity in India would be great.
Shveta Arya
Thank you Pariksha, thanks for the question. We have just launched the best solution in India. We are still building the order board. We are meeting customers at this point in time to share our value proposition on the best. So just recently launched the order board is just getting built. We will see how we are seeing the results in the market. What are the customers asking? What do they need? And accordingly we will take calls on future supply chain and manufacturing. For the time being our focus is to ensure that customers understand our value proposition on the best.
The risk as you mentioned of cannibalization as far as possible we don’t see this. We do see our customers wanting a mix of energy capabilities. So while genset is for their backup power, there is a good mix energy mix that battery energy storage provides especially for customers who might also have solar power in their premises. So the battery can be used to store that solar power. So we see this getting added to our portfolio. As of now we do not see A risk of cannibalization. I hope that answers your question.
Parikshit Kandpal
So this will be largely targeted at the CNI customers for auxiliary power and do you think you can also offer solution at utility grades? Best solutions for utility solutions storage of e nergy for grid stability.
Shveta Arya
W e’re starting with CNI customers. The nodes that we have launched are for CNI customers. Said we will showcase our value proposition to our customers and then take calls of whether we could go to utility grade or not. We will absolutely evaluate that as we go along in the next few months.
Parikshit Kandpal
Okay the second question is on the growth. We have seen the power churn in this quarter so it seems to be quite high and given that even May was impacted by operations indoor and when we were checking on the ground there was some delays in decision making but still you’ve delivered a stellar growth. So just wanted to understand was there any one off project order based revenues booked in this quarter on the power gen side or is it just the core G drive growth which you have delivered? So some flavor on that would be helpful.
Shveta Arya
Yeah Parikshit, this is core G drive growth. There’s been a lot of focus across all segments in the market. A lot of stabilization in the CPCB4+ product and good order building and execution. I would say great execution as well to deliver what the market needed across the board. Nothing.
Parikshit Kandpal
So no major project business booked. So that has not happened in this quarter despite that not in the last quarter. Last question on pricing any any color on the pricing and the utilization and the volumes. CPCB 4 versus CPCB 2 I think last time we said we are tracking at about 85%. So how’s the volume stabilized now in this quarter and also on the pricing have you seen any correction or pricing holding up.
Shveta Arya
From a volume perspective? We are back to pre CPCB4 plus volumes now. So we have reached those volumes in the market now and from a pricing perspective I think there is now good good settlement of pricing in the market. There is a lot of competition still and if that will continue pricing more or less seems to have settled .
Parikshit Kandpal
No cut in prices in this quarter like status quo quarter. On quarter last quarter we said there was no cut in prices. Even this quarter it continues to hold on.
Shveta Arya
Our endeavor is to continue holding on and we always evaluate based on customer needs and deal by deal basis and as and when we have those requirements we attend to those. But we are trying to hold on to our prices. Absolutely.
Parikshit Kandpal
Thank you Shweta. Those were my questions. I’ll join the queue for more.
Shveta Arya
Thanks.
operator
Thank you. Next Question is from the line of Nitin Arora from Access Mutual Fund. Please go ahead.
Nitin Arora
Hi ma’, am, congratulations on strong set of numbers. I have two questions. One is when we look at this power gen growth of 30% plus and you articulated that we have reached to the CPCP4 level kind of volumes, is it very broad based? Can you just throw some contours that which segments do you still think are sustainable of that segment on the power gen side? The way you explain in every quarter. That’s my first question.
Shveta Arya
Finitan. So yes sourgen growth in this quarter was very broad based but I’ll throw some light on the segments that did well for us. So I have shared this that we’ve been focusing on quick commerce and that is one growing segment and we saw that segment growing in this quarter as well. And then the mission critical segment which is also broad based where you can include government infrastructure spend based segments like roads, hospitals, airports, we saw some growth from those segments as well as manufacturing and pharma. So these were some of the key segments but I will still say that the growth is very broad based These are just some of the key segments that I’m highlighting for you.
Nitin Arora
Very helpful. And this looks sustainable to you? The way you articulated in the call?
Shveta Arya
This looks sustainable. Yes.
Nitin Arora
Great. On the second aspect on the export side it looks like it’s coming back. So I just want to know your perspective that given when we met last time also and you did a call and you were a little uncertain. Is it just the export has bumped up because there is pre buying or you are seeing markets little bit settling because when we track a few data of inventory levels. So is it like inventory is now normalizing in the market and demand is coming back how you’re thinking about exports going forward?
Shveta Arya
I would say exports we are still cautiously optimistic. Nitin, there are still various geopolitical issues going around. I would say the reason why exports have been performing for us is because we’ve been focusing on end markets. What do they need, what products they need. I have been sharing that there are specific projects that we are running to make sure that we are continuously improving our product positioning and making sure we are delivering to the customers in those end markets what they need by the time they need. So this is result of focused efforts, not necessarily all markets picking up demand. So that’s why we stay cautious about exports.
Nitin Arora
Got it. And just one thing on the profitability I remember in the last four quarters despite we being doubting on the company that profit margins or the ebitda margin would come under pressure, pricing would come under pressure, but I think it’s been a very consistent delivery in margins as well. Do you see a little bit more operational leverage coming in given it’s a very broad based recovery And I’m sure where you have a higher nodes there you are only the one which is gaining market a lot. I mean competition looks like it’s on the lower node side. So just one comment on the profitability that would be very helpful.
Shveta Arya
Nitin. I would say we do have competition in the higher nodes as well and it’s getting tougher. So while we try to hold on to what we do, which is we continue to work on cost optimization and delivering better on the profitability side, I would definitely say that competition is across the nodes at this point in time, also in the higher nodes. But like I have been saying, we put in efforts to make sure that we do find that cost leverage and cost optimization opportunity. So that will be the endeavor. That’s the best I can provide to you at this point in time, perhaps.
Nitin Arora
That’s very helpful and all the best. Great performance. Thank you.
Shveta Arya
T hank you.
operator
Thank you. Next question is from the line of Umesh Raut from Namura, India. Please go ahead.
Umesh Raut
Hi team, thank you so much for an opportunity. Congratulations for strong set of numbers. My first question is pertaining to distribution segment. So if I look at I think growth for this quarter as well it has remained strong at about 19% and in last year as well we have delivered 22% kind of CAGR. I think it is looking like largely on the count of new product launches especially you had talked about lot on these new products especially in the recent annual report. So if you can share addressable opportunities for some of these new products like DFKids, RAS Power Management Solutions, DGPLU which is the diesel exhaust fluid and hydraulic filters as well and especially on the new product launches and the railway segment track recording car and hotel load converter. So that insight on the new product launches and TAM would be helpful for us.
Shveta Arya
Yeah, thanks for the question. Umesh. Umesh, you asked about the distribution business growth and is it primarily due to these new products? I would say that the distribution business growth is primarily due to our better penetration in power gen and railways, better execution and it’s broad based. The new products have started to contribute but I would not say that the growth is primarily based on new products. It is based on better penetration in the traditional power gen and railway segments and providing better aftermarket solutions to our customers. So that is what the growth is Based on.
Umesh Raut
Got it. And the new product launches on railway side, especially in the industrial segment if you can give us time or opportunity because there we are now compensating for railway electrification. So just wanted to understand from an annual ramp up point of view on the railway side whether we can grow in the range of about 2025% from 500 crores of revenues in 25 as well.
Shveta Arya
Umesh, you’re referring to the hotel load converter. And while we had launched the product, it was still undergoing field trials. So serialized production of the product is yet to start. So it’s early to say the product will be productionized from a serial production perspective very very soon. As of now it was undergoing field trials so it will start contributing in the coming quarters.
Umesh Raut
Got it. Got it. And even with the introduction of CPCB populace, do you think that the consolidation will happen in favor of branded players in aftermarket business more and more and because it is more of electronic based content, so opportunity can be even higher for distribution business for you.
Shveta Arya
You are absolutely right. That gives a better opportunity because the products are technologically more advanced than what we had in the CPCB2 era. So the products are more advanced and they will require better aftermarket support and technically strong teams on the ground to help our customers. So you’re right, it could lead to better opportunities.
Umesh Raut
Got it. My last question is on the export side if you can share geography wise export contribution especially from Asia, Middle East, Europe, North America, Latam and other part was related to whether you are saying any incremental fraction because of now CPG 4/plus things compliant product which is now getting accepted in newer markets and exports.
Shveta Arya
So from an export perspective both the high horsepower and low horsepower ranges are doing have done well in the quarter and the growth is pretty broad based across markets. I will not this particular quarter there’s no specific market to call out. Largely we’ve seen Latin America and Europe performing better as compared to the last quarter and even the last year. But it’s broad based across markets. And on the question on CPCB4 plus products, since we supply our products to many markets around the world, a large part of these markets are still on lower emission norms than CPCB4 so they continue to buy those products. A nd the markets which do buy products which are CPCB4 + we continue to work with them as well. But a large part of these exports are still the lower emission products for now.
Umesh Raut
Got it. Got it. Thank you so much and all the very best.
Shveta Arya
Thank you.
operator
Thank you. Next question is from the line of Mohit from ICICI securities. Please go ahead.
Mohit Kumar
Good afternoon ma’ am and congratulations on a very very good quarter. My first question is, can you give u s the breakup between hhp, MHP and. LHP sales in power chain during the quarter?
Shveta Arya
Yes, sure. So low horsepower for this. Yeah, sorry, give me one second. Yes. So low horsepower for this quarter is 84 crores. Medium range is 229 crores and what we call heavy duty is around 115 crores. And then high horsepower is 628 crores totaling up to 1056 crores for the quarter.
Mohit Kumar
My second question is, ma’, am, has the data center sales contributing more than 20% of the HHP power chain? Is it fair to assume that this is a contribution? And how are you seeing the data center sales in this fiscal year compared to the last?
Shveta Arya
The data center? I would just correct you there. It is 15 to 20% of overall power gen sales, not just high horsepower. So that is the contribution of data centers. And we have been seeing steady growth in the data center market comparable to the rest of power gen segment growth as compared to last year.
Mohit Kumar
Understood. Thank you. Thank you.
Shveta Arya
T hank you.
operator
T hank you. Next question is from the line of Jason Sones from IDBI Capital. Please go ahead.
Jason Soans
Yeah, thank you for taking the question. Just wanted some color on the industrial side of the business as well in terms of, you know, the various subsegments like mining, construction, compressor. Just if you could give some color on that as well as the breakup for that segment.
Shveta Arya
Yes, for the quarter. So for this quarter, the construction segment, 147 crores, rail 148 crores, compressor 56 crores and then the remaining totaling up to 418 crores for this quarter. So a little bit of color on this segment. Railways performed really well for us owing to orders for the diesel electric tower cars and power cars.
Construction segment, steady growth. However, in this particular quarter we did see some projects getting affected due to early monsoon and then compressor segment just continuing on steady demand, very comparable to the last quarter. Those were the key highlights.
Jason Soans
Sure, thanks for that Shweta. And also just in relation to the exports, just wanted to understand, you know, in light of this tariff thing. So I mean is there any exposure of us to the US markets or some products that feed into the US markets? Any color on the development in terms of this tariff increase?
Shveta Arya
Jason, we are evaluating at this point in time. We are quite diversified in terms of the markets that we export to. Yes, we do export to the U.S. but since we have quite a Diversified portfolio. The share of what we export to the US will not be very high but we are evaluating how this will impact our exports to the us.
Jason Soans
Sure. Thank you. Those were my questions. Thank you so much.
Shveta Arya
Thank you.
operator
Thank you. Next question is from the line of Ruchit Agarwal from Unifi Mutual Fund. Please go ahead.
Ruchit Agrawal
Hello ma’, am. Thank you for the opportunity and many congratulations on the strong set of results. Just one question from my side. As you alluded to the fact that we are seeing prices settling down now and the endeavor is to hold on to prices. Can we say that the margins that we’ve had in the last two quarters are sustainable and any color on that?
Shveta Arya
Ruchith, thanks for the question. So that is our endeavor but then we always have to be competitive in the market. So we wait and watch depending on the competition activity and to provide the best value to our customers. So bylaw endeavor is to hold on to the margins for sure.
Ruchit Agrawal
Sure, that helps. And just one question on the competitive intensity. As you mentioned, if you can give some on our market share especially in the high HP nodes, are we seeing some foreign players entering the market and have we had any impact on the same?
Shveta Arya
We have quite a few players in the market Richard. There are domestic players as well as foreign players. Yes. And that intensity has been increasing for sure. We continue to watch. We do. I can’t comment on the market share but we do have good brand presence and acceptance because we have been around in the country for a long period of time. So there is a lot of brand acceptance and customers do prefer our products. But you’re right, there is a lot of competitive intensity including from foreign players in this segment.
Ruchit Agrawal
Okay ma’ am, that helps. Thank you for addressing the questions and wish you all the best.
Shveta Arya
Thank you.
operator
Thank you. Next question is from the line of Amit Anwani from PL Capital. Please go ahead.
Amit Anwani
Hi, thanks for the opportunity. My question is on exports. You did highlighted that late time in Europe the demand is very broad based. So I think in past 4 to 5 years I think only FY23 we did about 2000 plus crore export. Can we expect sustainable export numbers from here? And despite there are challenges and we understand that you’re still evaluating the tariff impact maybe for certain sales from US but given Europe and Latam doing good, is it sustainable? And can we see 2000 crore plus numbers in any annual sales? Maybe this year. And second, which user industries? All segments which are contributing to broad based numbers in the export market.
Yes.
Shveta Arya
From an exports perspective we are a little Cautious. And while we do see in the last quarter that all the markets, be it Latin America or on the high horsepower side, Europe, on the low horsepower side, all the markets like Africa, Middle east, all of them, we saw growth coming in due to a lot of efforts we have been putting. But the geopolitical situation does keep changing and that’s why we are cautious about exports. Optimistic because we are putting in a lot of efforts but still cautious and evaluating the current situation. Could you repeat your second question on the industries?
Amit Anwani
Yeah. So in Europe and Latin, especially since you highlighted which are the segments, end users where we’re getting a good demand from i n this markets.
Shveta Arya
T hese are power gen segments, largely cni. In both these markets there could be some rental players, there could be some CNIF layers. Power gen largely in all the markets that we sell to.
Amit Anwani
Second question on a guidance of double digits since we have done extremely well with respect to numbers in Q1 and we did about 25% number. So just for understanding perspective, we’re seeing kind of high tens or maybe 15 to 20% growth since Q1 is already very strong. If you can give some color with respect to the growth.
Shveta Arya
There is. We do see domestic demand continuing but as I mentioned we are cautious on the exports. So at this point in time I would say double digit growth does remain our outlook and endeavor. Beyond that it is difficult to give you a range.
Amit Anwani
Understood. And on the gross margin will this be sustainable since you’re seeing export is cautious. So in domestic also are there margin accretive products contributing and is this gross margin we can assume that is possible to sustain.
Shveta Arya
So on the gross margin side we did get a lot of leverage benefit in this quarter. So if the volumes continue, we expect to sustain the gross margin from this perspective, that is gross margins based on volumes and the product mix will be a play. So our endeavor is to maintain it at these levels.
Amit Anwani
Understood. Thank you Shweta. Thanks for answering my questions.
operator
Thank you. Next question is from the line of Rahul Gajare from Hightown Securities. Please go ahead.
Rahul Gajare
Yeah. Hi Shweta, congratulations on a strong quarter. You know my first question is, you know, you already touched upon certain sectors and segments you know which are driving growth. I wanted to know specifically, you know, if you have been able to cater to all the demand which is coming from data center specifically given most of the higher nodes for you all are imported. And I also understand that Caterpillar has been able to pick up a lot more orders recently and improve its market share given their shorter timelines of delivery. So what are you doing to shorten the timelines for imports, especially of nodes of upwards of 3,000, 3,500? So those are the questions that I’ve got. Thanks.
Shveta Arya
Thanks for the question. There’s a lot of work that we are doing to shorten our lead times as well on those nodes, not just for our market, but for around the world. So there’s work going on on shortening the lead times for our product deliveries. And on the other hand, we are working with our customers so that we can generate the orders in advance and make sure that we deliver to them based on their own site readiness. So those efforts are going on. We have been able to fulfill the demand that has come our way since you asked that question. We have definitely not lost because of our inability to deliver.
Rahul Gajare
Okay, and you think that, you know, the demand from data center will continue this way given that you’ve not specifically called out data center. You know, when you talked about some of the earlier sectors.
Shveta Arya
The demand from data centers is continuing. Yes, I specifically did not call out data centers because that has been steady for the last few quarters. I only some of the segments that actually did really well in this quarter. But yes, data center demand is steady and continuing for the time being.
Rahul Gajare
Okay. And continuing with this question, you know, are there any specific areas where you see, you know, that demand has drastically collapsed or you know, significantly reduced, including inquiry levels?
Shveta Arya
No, we haven’t seen any segment dropping demand to the level that it comes to our notice. It’s been quite broad based. Yeah, no, not segment like that.
Rahul Gajare
Okay, thank you very much and all the best.
Shveta Arya
Thank you.
operator
Thank you. Next question is from the line of Chandrakhan Kanase from Ericsson. Please go ahead.
Chandrakant Kanase
Yeah, good afternoon, madam. I have a question regarding this flexible fuel engines. Are we ready to launch them in India and what is the potential for those flexible fuel engines?
Shveta Arya
Chandrakant flexible fuel engines. We have something that we are working on at this point in time globally which we call there’s a platform which we call helm which we are working on. But right now we do not yet see the need to launch it. And we are working on that to see if there is a need for the time being for our company. Given power gen segment is the most important segment and growing segment which might require some options for beyond diesel.
There is a dual fuel kit that’s available to help customers who would like to try diesel along with gas and thereby have to option off the dual fuel kit. So the dual fuel kit is already launched in the market and that’s how we are catering to the customer requirement. Who would want to try gas as well as diesel as a fuel?
Chandrakant Kanase
Yeah. And my next question was regarding the railway segment. Basically the powertrain part of the railways based on hydrogen fuel. What is the potential for coming there and what could be the timeline there?
Shveta Arya
So there is definitely potential. However hydrogen the fuel on the railway side would be a hydrogen fuel cell discussion which is still some years to come. We have electrified railway tracks. So the Indian Railways is really focusing on that and trains which can work on those electrified railway tracks. So there are conversations around hydrogen fuel cell. But it is some time to come, you know, at least more than a decade from now.
Chandrakant Kanase
Okay. And it will come out of accelerate pulp.
Shveta Arya
We will evaluate at that point in time when we are ready and when we are having the conversation with railways. At this point in time there are very little discussions on hydrogen fuel cells.
Chandrakant Kanase
Thank you ma’a m. A decade is too long. Yeah. Thank you.
Shveta Arya
Thank you.
operator
Thank you. Next question is from the line of Sev Saurabh Gujar from ICICI Prudential amc. Please go ahead.
Saif Sohrab Gujar
Yeah, thanks for the opportunity. So just one question on the exports. So comments. Globally UK is a very big hub for them. Globally. Right. And since then, now there is a India UK fda. Is there an increased mandate from parent for supplying to UK since basis annual report. Also we see transactions with Cummins Limited which have been growing anyways. Right. The UK entity you have proposed to increase it by 26% from 1167 crore which is big. Right. So is there a direction in that towards supplying more to UK entity basis the discussions with parents.
Shveta Arya
Thanks for the question Saif. So we are looking at it. We you know we are trying to see how we can improve our presence in that market. Given. Given the announcements made. Definitely that is something we are evaluating with our global counterparts.
Saif Sohrab Gujar
And just a clarification from earlier questions. You mentioned 31% power gen growth is without any project business revenue which you typically recognize in 4Q. Right. So there is no project business revenue in this call.
Shveta Arya
There is project business revenue. There is project business revenue in it. There are no one off. The question was around one off growth items. There are no one off growth items. But definitely there is project focused in that.
Saif Sohrab Gujar
Okay. And still the margins have been. Thanks. All the best.
Shveta Arya
Thank you.
operator
Thank you. Next question is from the line of Parikshit Kanpal from HDFC Securities. Please proceed.
Parikshit Kandpal
Thanks for the follow up. Shweta. My question is again on best. So right now the prices on import side is about 1 crore to 1.2 crore per megawatt hour. So do you think that Cummins will be competitive enough to match that kind of pricing? And I mean, do we have any right to win? That is basically my question. I want to know given the pricing is so aggressive now on the import side.
Shveta Arya
Yes, Parikshit. So we are evaluating. They’re working with our customers because our product does have quite a few features which the customers would appreciate on the safety side and on the utilization of the best. So we’re working on that to provide the right value proposition to the customers. And if the need be, we would definitely work on the cost side as well.
Parikshit Kandpal
But on your internal assessment, what kind of TAM could this be? I mean for CNI customers to start with, what kind of opportunity maybe one or two years down the line, do you think this could present.
Shveta Arya
A little t oo early to say very early? Parikshit. We just launched the product about two months ago.
Parikshit Kandpal
This one question which we used to always keep coming earlier and the CTL and CIL merger. So. So any thoughts there again? I mean I’m taking it after a long time, but this was a question used to come on the call. So any thoughts there? I mean how is the parent thinking about it? Any discussions around that?
Shveta Arya
That’s a continuous assessment that the parent does. But at this point in time there’s nothing that I can share which is concrete at all.
Parikshit Kandpal
Okay, you said the project business is now regular. So what was this quantum in this quarter? If you can quantify out of the total power chain business.
Shveta Arya
I won’t be able to share the exact number. But it’s a steady number. It’s not. There is. There is a small number of project execution, but I won’t be able to share the exact number.
Parikshit Kandpal
So high single digit or double digits. Right? At least this much color can give.
Shveta Arya
D ouble digit.
Parikshit Kandpal
Okay. And just one last question on this. What is the composition of the CPCV4 engines now in the total power gen makes revenues you book this quarter. So what will be the quantum? Will it be like 80, 85%?
Shveta Arya
So CPCB 4 plus range? Not 80, 85% from a value perspective. But sorry, I’m trying to decipher your question. So below 910kva is fully CPCB4 +. Did you mean how much is CPCB4+ in the full power gen?
Parikshit Kandpal
Yeah, yeah. So domestic power generation business of thousand otkores was viewed this quarter. So how much was the contribution which came from the CPC before engines?
Shveta Arya
Roughly 60%. Roughly 60%.
Parikshit Kandpal
Okay, 60 will be CPCB 4 and 40 will be non CPC okay?
Shveta Arya
Yes, that’s right.
Parikshit Kandpal
And lastly on this hydrogen electrolyzer so any. Any update? And now you have introduced best so anything you’re hearing from your customers who want like to try out from Cummins electrolyzer product. So any thoughts there? When do you expect this to come into the Indian market for the power backup.
Shveta Arya
Hydrogen electrolyzers are not for power backup hydrogen electrolyzers just to generate hydrogen for the customers so that is not something that we’ve heard too much on in the market in the recent past.
Parikshit Kandpal
Okay, sure. Thank you.
operator
Thank you Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the queue please restrict your questions to two per participant should you have a follow up questions, please rejoin the queue Next question is from the line of Harshit Jitendra from Ilara Capital. Please go ahead.
Harshit Kapadia
Thanks for the opportunity and congratulations for strong set of numbers. Just two questions from my side on the call you mentioned mentioned that till now we are looking at a growth in data center now is this reference to that the demand from one of the large US IT company related to data center has come down because of AI and given that you may have a higher exposure to that particular customer, you are little bit worried of data center growth? Let’s say not in this year but probably in FY2007 28.
Shveta Arya
No, we are not worried about that. We still have robust audio board on the data center from all different kinds of data center players be it the ones from the US or be it the ones from India. So there is a strong audubod on the data center side.
Harshit Kapadia
Understood ma’ am and on the second question was on distribution side till now what we understood was 60% of your distribution was directly through Power Gen and 40% was because of the industrial now given because of the CPCB4 and our electronic item usage in the power gen is going to rise Will we see power gen share increasing significantly in the distribution mix and because of which even margins will also increase.
Shveta Arya
So the distribution business mix is across our gen and industrial business. Yes, but we are seeing growth across both.
operator
Sorry to interrupt, your voice is breaking. Yes, please go ahead.
Shveta Arya
Okay. On the distribution business side we are seeing growth both on power gen side and also on the industrial business side so why power gen CPCD4 does provide opportunities to penetrate.
operator
Ma’, am, your voice is breaking again.
Shveta Arya
Can you hear me better?
operator
Yes, please proceed.
Shveta Arya
I repeat my answer on the distributed business side both power gen and industrial business are growing for us on the Powergen side, CPCB4 plus does offer possibilities of penetrating more. But the same opportunities and in a different way are present in the industrial business side as well. For example in railways, in mining, in marine. So it would not be fair to say that power Gen would outstrip the growth on the industrial business side. Both are growing for the distribution business.
Harshit Kapadia
Thanks for the answer. Just if I can squeeze in one question related to industrials on marine. We have been seeing that we will see a lot of growth on the marine side because of lot of defense related ships are on the rise. Could you give us some thought on what kind of growth we can expect and from which quarter is this growth going to fructify for us?
Shveta Arya
So there is steady growth in that segment and these are dependent on government orders, our tender based projects. So this steady growth happening. There’s nothing that I can say that by this period of time we will see because these are government tender based projects largely.
Harshit Kapadia
Fair enough ma’a m. Thank you very much ma’a m. Wish you all the best.
Shveta Arya
Thank you.
operator
Thank you. Next question is from the line of Aditya Mongya from Kotak Securities. Please proceed.
Aditya Mongia
Thank you. Congratulations for a very strong result.
operator
Mr. Mongya, your voice is very low and it is breaking so please use your handset.
Aditya Mongia
Yeah, I’m on the handset. Is it getting any better for you now?
operator
Yes. Yes this is better sir. Please go ahead.
Aditya Mongia
Thank you so much for that. So the question, the first question was on exports. At least we’ve started seeing KTA 38 and. Sorry QSK 38 and QSK 50 engines started becoming relevant US exports over the last few months. We also see in the annual report mentions of us kind of opening up at the market on these nodes. I wanted to understand the tariffs aside. Can us start becoming a more sizable share of our sales over the next few years?
Shveta Arya
Hi Aditya. Thanks for the question. So remains to be seen the products definitely have been launched and we saw good traction from the market. Now we have to evaluate the current situation and see how that impacts us. But yes, there is a possibility of growth in that market through these products. Definitely understood.
Aditya Mongia
Just a question to this from at 1600-crore run rate of exports we are now coming back to 2000 crores. We assume that bulk of this change that has happened which has happened fairly quickly is because of share gains and the macro is still as weak as it was in the last year. And thus if it were to change there would be a second uptick that happens from here on.
Shveta Arya
Very different market by market there are place, like I was saying, there are places where we have been able to provide the right products through the right channel. It is, I mean these are various markets that we sell to, right? Europe itself is like so many different markets, so is Africa, Middle East. So difficult to say how we would have gained share in each of those different markets and how this would have moved.
Aditya Mongia
Okay, the second question that I had Shweta was just to get as in a bird’s eye view from your lens, as in from there on, which segment is the segment wherein you would want to focus a lot more and where a lot more value creation can happen? Powers and exports and distribution obviously trying to get a sense more on distribution for this question because our sense is that that business at least I was talking about, that’s having a five year kind of, five year kind of future which is fairly decent. But if you have to pick one segment where you want to focus the most, which one would that be?
Shveta Arya
That is a tough question. I would not want to pick one segment because the India domestic market presents opportunities across the board. So in the power gen side there is demand which is growing because there’s need for backup power. The industrial segment because of government spend, infrastructure spend presents opportunities. And when we utilize all these opportunities, the distribution business also continues to grow owing to higher growth of our engines on the ground, higher penetration and new products being launched. So I definitely would not want to pick up one segment because there are opportunities across the board.
Aditya Mongia
Just a minute of a clarification. You said that power gen revenues have come back to CCCP2 levels for you. How far away would the market be at this point of time to be reaching that stage and can that happen this year itself?
Shveta Arya
My comment was not about power gen revenues, my comment was about overall market volumes. Overall market volumes at this point in time are back to CPCB2 levels. That was what my comment was about.
Aditya Mongia
That clarifies and all the very best.
operator
Thank you. Next question is from the line of Anupam Goswami from Sud Life. Please go ahead.
Anupam Goswami
If you could summarize where, how do we look at the growth across the segments and specifically which segment and of course and our product lines Also when you see the industrials and power gen which factors will lead it to little specific on this if you can help it.
Shveta Arya
Hi Anupam. So if you’re talking about the current quarter and what we see in the market, so power gen there are few segments that I called out like quick commerce mission critical segments which are hospitals and roads, airports Some of them manufacturing segments, pharma, some of these have presented opportunities in this quarter and continue to grow at a robust pace that from a power gen perspective it is across the nodes this demand.
So we are seeing that in the industrial business side we are seeing demand from the railway, diesel electric tower car and power cars which we continue to see. Construction segment was impacted a little by monsoons but we do see some steady movement in that. So these would be the key highlights. And other than that distribution business we continue to see similar kind of growth. So those are, those are the key things that we see in the market. And given, given the way the domestic economy is performing, we do believe this, this will continue at least for some time.
Anupam Goswami
Ma’, am, on the let’s say from the last year, what sort of changes are we finding this time? Given the stabilization of CPP4 has happened and any sort of disruption is now b ehind us.
Shveta Arya
What sort of changes? Could you please clarify?
Anupam Goswami
Ma’ am. In terms of growth and demand factors, where do you see the market is opening up and where do we see our USP or our advantage that we are getting?
Shveta Arya
From a market demand perspective. I just shared with you from our USP perspective specifically in the power gen space we do have very good customer relationships which we have built over the years. The brand promise that we deliver on reliability and innovation has been working in our favor. The CPCB4 product being very technologically advanced has been accepted very well by the market and the aftermarket support much needed by the customer on the power gen side specifically for such a technologically advanced product is being well appreciated on the industrial side as well. Our execution, our ability to execute orders which sometimes are very customized based on requirements of the tenders and the ability to deliver after market support for a long period of time for that. These are some of the USPs which are well accepted by the market and are continuing to show us, show us possible growth areas as well.
Anupam Goswami
Thank you ma’ m.
operator
Thank you. Next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead.
Pulkit Patni
Thank you for taking my question. Shweta, when I look at the last couple of years, while we’ve done very well on growth, we’ve also been very tight on cost. Whether it is employee cost, we’ve been, you know, we had a few VRs, etc. Now as you chart out the next 3, 4 years growth trajectory for the company, how should we look at cost for you? You think you are right size or we’ll have to sort of rebuild capacity how do you think about Capex, you know, utilization? So I’m just thinking about, you know, best margins and best growth for the company in the last couple of years. How should that trend from a cost perspective going forward?
Shveta Arya
Hi Pulkit, thanks for the question. So Pulkit, you’re right. We have been focusing a lot on our costs as well and we have been working very hard to optimize our costs to the right level so that from an employee cost or other kinds of spends will continue. On the other hand, capacity in our capacity in terms of upgrading the lines, expanding the lines, we have been putting in capital over the last few years continuously and that will continue for us to ensure that we are providing to the domestic market as well as to help with our exports growth.
So that capital has been coming in continuously and continues going forward. Our capacity utilization at this point in time is around 65 to 70%. But that’s also because we have been continuously putting in capital on line upgrades and line expansions and finding ways to utilize it better. So those are some of the things that have worked for us. The way you should think about it is that going forward we will have leverage gain because we’ve worked on a lot of optimization but we will also continue investing to fuel our future growth. So that is probably the best way to think about it.
Pulkit Patni
And in that context, what should we build in for CapEx for the next couple of years?
Shveta Arya
I won’t be able to give you numbers but like I said, we’ve been continuously investing in capex over the last few years. You could build in a very similar scenario.
Pulkit Patni
Okay, so about 225 watt crore which you spent last year. That’s something we can bake in for the next few years as well.
Shveta Arya
I won’t be able to give you the numbers.
Pulkit Patni
Sure. Thank you. Thank you and good luck.
Shveta Arya
Thank you.
operator
Thank you. Ladies and gentlemen, we will take this as the last question for the day. I would now like to hand the conference Again over to Ms. Shweta Arya for her closing comments. Over to you Ms. Arya.
Shveta Arya
Thank you. Thank you everyone for your participation and engagement and all the questions on the call today. Cummins India believes that the broader domestic economic outlook is stable. India’s GDP estimate for financial year 26 remains at around 6.5% and the CPI has eased over the last quarter. Economic policy reforms coupled with reduction in interest rates and government focus on infrastructure development bodes well for our end markets. However, we do have uncertainties pertaining to global tax and trade policy and we remain cautiously optimistic about the near to medium term demand outlook. With this, I would like to close the call.
Thank you so much everyone for joining us today.
operator
Thank you ma’a m. On behalf of Commence India limited and the leadership team, we would like to thank you for joining us today and making it an engaging session. We are ending the conference call now. You may now disconnect your lines. Thank you.