Cummins India Ltd (NSE: CUMMINSIND) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Unidentified Speaker
Shveta Arya — Managing Director
Ajay Patil — Chief Financial Officer
Analysts:
Unidentified Participant
Parikshit Kandpal — Analyst
Mohit Pandey — Analyst
Umesh Raut — Analyst
Mohit Kumar — Analyst
Jason Soans — Analyst
Renu Baid Pugalia — Analyst
Amit Anwani — Analyst
Sumanta Khan — Analyst
Uttam Kumar — Analyst
Subramanyam Yadav — Analyst
Shrinidhi Karlekar — Analyst
Aditya Mongia — Analyst
Sourav — Analyst
Amit Mahawar — Analyst
Presentation:
operator
Good morning ladies and gentlemen. Welcome to Cummins India Limited Q4FY 202425 earnings conference call. We hope you all are keeping safe and healthy. As a reminder, all participant lines will be in the listen 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 your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Shweta Arya, Managing Director, Cummins India Limited. Thank you. And over to you, Ms.
Arya.
Shveta Arya — Managing Director
Thank you. Good morning ladies and gentlemen. I hope you’re all doing well and staying safe and healthy. I am Shweta Arya, Managing Director of Cummins India Limited. Joining me on the call today is Prasad Kulkarni, the interim CFO of Cummins India Limited. Thank you all of you for joining us today on this call. I would now like to share the financial results for the year ended March 31, 2025 and for the quarter financial year 25 quarter four. Starting with the year ended March 31, 2025. Our sales at 10,166 crores are higher by 15% compared to 8816 crore recorded in the last year.
Domestic sales at 8395 crore are higher by 18%. Exports at 1771 crore are higher by 6%. Profit before tax at 2496 crore is higher by 16% compared to the last year. Segment wise Sales breakup Domestic Power Gen Domestic sales at 3,844 crore is higher by 14% compared to last year. Distribution business sales at 2,687 crores is higher by 14% compared to Last year. Industrial business domestic sales at 1,668 crore is higher by 29% compared to last year. From an exports perspective, High horsepower exports at 821 crores higher by 1% compared to last year. Low horsepower exports at 784 crores higher by 12% compared to last year.
Now moving to the quarter ended March 31st, 2025 comparing it to the quarter last year. Our sales for the quarter at 2,414 crores are higher by 6% in comparison to 2,269 crores recorded in the same quarter last year. Domestic Sales are at 1,935 crores, higher by 1%. Exports at 479 crores are higher by 39%. Profit before tax at 681 crores is lower by 3% compared to the same quarter last year. For the quarter ended March 31st, 2025. Comparing it to the previous quarter, our sales at 2,414 crores are lower by 21% compared to 3,041 crores recorded in the last quarter.
Domestic sales at 1935 crores are lower by 25%. Export at 479 crores are higher by 3%. Profit before tax at 681 crores is higher by 2% compared to the last quarter. Segment price breakup for the quarter ended 3-31-2025 for the Domestic Business Power Gen. Domestic sales were 874 crore. 7% lower compared to same quarter last year and 31% lower compared to last quarter. Distribution business sales at 631 crores. 5% higher compared to same quarter last year and 15% lower compared to last quarter. Industrial domestic business sales at 379 crores. 9% higher compared the same quarter last year and 26% lower compared to last quarter.
Exports High horsepower exports at 218 crores are higher by 27% compared to same quarter last year and 8% higher compared to last quarter. Low horsepower exports at 215 crores are higher by 51% compared to last year and flat as compared to last quarter. Going forward, we anticipate double digit revenue growth in financial year 202526 while remaining cautiously optimistic. Given the uncertainty from changes in global tax and trade policies along with the geopolitical issues which we continue to monitor very closely. I now open the session for questions. Thank you.
Questions and Answers:
operator
Thank you very much, ma’ am. We will now begin with a question and answer session. Anyone who wishes to ask questions may press Star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may Press Star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press Star and one to ask questions. The first question is from the line of Parikshit Kantpal from HDFC Securities. Please go ahead.
Parikshit Kandpal
Yeah. Hi Shweta. So my first question is on Power Gen. So there’s a decline of 7% quarter. Sorry yoy. And 31% q and q. So if you can help us understand a little bit more in terms of granularity whether towards the end of Q4 you saw a decline especially in the March month given there was uncertainty of the tariffs coming in on the 2nd of April. So was there any postponement or delays in decision making that led to this decline in the numbers?
Shveta Arya
Thanks for the question Parikshit. As you mentioned decline of 7% in power gen year on year. This is largely owing to the fact that the same quarter last year had pre buy sales of CPCB2. So this is not with respect to just this year. Last year saw higher sales because of the and from a quarter on quarter perspective we usually see that the quarter which ends on December there is good velocity of sales where lots of inventory moves in to the goem and then out into the market. Also now we are seeing full CPCD4 plus sales in the market.
So I think these are all the factors as we compare last year and last quarter sales in power gen.
Shveta Arya
Just to give you some more numbers on the volume. So now in Q4 I mean if I compare with CPCB 2 volumes and CPCB now in full distance, so are the volumes back to 100% started growing and any initial trend on that will be helpful. The volumes in CPCB4 plus are not completely matching up to CPCB2 but every quarter we are seeing increase in the volume trend. I think another quarter or two to see the volumes crossing CPCB2 numbers? Not yet but they will be still tracking around 85 to 90% or significantly lower. I mean early 80s. So any sense any color on that? Yeah, close to 80 to 85% is what the tracking would be.
Parikshit Kandpal
Okay, any color on pricing now? I mean given there has been some time now post implementation of the C2 C4 so you seeing any softness in pricing or still the prices are holding on versus the point that they were implemented. So any color on that.
Shveta Arya
Pricing is still settling down in the market. Parikshit we have seen all competition products in the market now we are still seeing pricing settle down. We do think that it will take another quarter or two for the pricing to completely settle down. That being said, we have been largely able to hold on to our pricing in the market, but I would say that competitive intensity has increased and pricing will settle down in another three quarters now.
Parikshit Kandpal
Okay, just one last question. Was there any one off in this quarter both on the EBITDA line as well as in the top line? Any I mean was there any impact of large data center orders or was that number missing in this quarter? So you can help us understand that?
Shveta Arya
No, no one off like that. Okay, so no major order on the data center side this quarter which could have helped maybe slightly better growth no. Demand across sectors and all different segments have contributed to the growth. So I won’t be able to call out one particular one off segment.
Parikshit Kandpal
Okay, sure. Those were my questions. Thank you. I’ll join the queue for more questions.
Shveta Arya
Thank you, Pritchett.
operator
Thank you. The next question is from the line of Mohit Pandey from Macquarie. Please go ahead.
Mohit Pandey
Yeah, ma’ am. Thank you for the opportunity. My first question would be on gross margins. If you can give color on what has driven the strength, is it largely linked to commodity in the fourth quarter.
Shveta Arya
From a gross margin perspective, if you look at the whole year, we have done better as compared to last year. And what I would say is there’s a lot of effort put in in terms of our work on the direct material cost and bringing the cost of our products down. Also as I mentioned, we are watching pricing carefully and we have been able to hold on to pricing as well. So it’s a mix. And product mix also plays a part in how finally our gross margin comes up. So all of those three have worked. Definitely a lot of work on our end to improve our direct material costs.
Mohit Pandey
Okay. Okay. So ma’ am, the gross margins that we achieved this year, so you think in FY26 they’re more or less sustainable?
Shveta Arya
That is our endeavor, Mohit. That is our endeavor. We continuously work on cost related efforts so that we can improve on these. That is exactly the direction in which we are working.
Mohit Pandey
Understood, ma’ am. Ma’ am, also if you could share the breakup of domestic power gen that you typically do across low, medium, heavy and high HP.
Shveta Arya
Yes, I will do that for the financial year 2425. Breaking up the power gen sales. Low horsepower is at 272 crores. Medium range is at 733 crores. Heavy duty is at 376 crores. And high horsepower is at 2,463 crores leading to a total of 3,844 crores for the year.
Mohit Pandey
Okay, ma’ am. Ma’ Am, and one final question from my side with regards to data center linked genset demand, are you seeing any slowdown there? That would be my last question.
Shveta Arya
No, we are not seeing a slowdown there. We are actually seeing a lot of activity inquiries and orders coming in. So we are not seeing a slowdown in the data centers in the India market yet.
Mohit Pandey
Okay ma’ am. Thank you so much and I’ll come back in the queue.
Shveta Arya
Thanks Mohit.
operator
Thank you. The next question is from the line of Umesh Raut from Nomura India. Please go ahead.
Umesh Raut
Hi ma’ am. Good morning. My first question is pertaining to a demand outlook for a genset business as per the end user market. So in terms of residential and commercial reality, where we are currently sitting at, in terms of cycle and how exactly you are seeing demand shipping up from this particular major end user market at the same time, how you are seeing emerging segments like data center from current base, how exactly growth would be and on the export side as well, looking at the sequential recovery last year, last few quarters, how you are looking at sales stabilizing export markets.
Shveta Arya
Thanks Umesh. For the questions, let me start answering them. Demand outlook for the genset going from here.
Umesh Raut
Ma’ am, I’m sorry to interrupt you. Yeah, Umesh, I would request you to mute your line please. Ma’ am, please continue.
Shveta Arya
Yeah, thank you. Your first question around demand outlook for the genset market. So we are seeing demand and this demand is continuing from the segments, all the segments that we serve. So there is demand in residential reality, commercial reality, infra related segments in data centers. So we are seeing all the demand there. In the power gen market, there is no specific trend that I can call out. We’re seeing demand across segments, some emerging segments as you said. The emerging segments that we are seeing is actually quick commerce, so the likes of Zepto, Blinkit when they are setting up their warehouses and fulfilling their needs.
So we are seeing some of order and inquiries coming from these kind of segments as well. Otherwise across the board we are seeing demand and in fact power gen business does see some seasonality during the summer months and as we have seen in the past and every year, we are seeing that kind of inquiry generation and order generation. So that’s from a demand outlook from a genset market perspective and the emerging segments. You asked about exports going forward. So we have been putting in efforts to grow our exports across different markets and we have been working with our teams to specifically position our products rightly in different markets.
And because we serve various different markets around the world, our initiatives for each market are very different. We started this journey some quarters ago and we are on that journey. So from our effort perspective and the work that we are doing is showing results and there is definitely uncertainty in the global markets as you will anticipate because of the tariff, the geopolitical situation and how the trade deals are being negotiated, our efforts are definitely continuing in the direction of positioning our products rightly based on specific market requirements.
Umesh Raut
Got it. My second question is pertaining to competition. How you are saying competition, competition now in the data center market and any color on market share that you have in data center. And do you also serve to export markets for data center in the market? So, data center market competition. Thanks.
Shveta Arya
Thanks for putting yourself on mute Mesh. So from a data center market perspective we do see competition but we have been working in the data center market for a long period of time and our product is very well accepted by the data center players. We also provide aftermarket support, very specialized to the data center market. So we are seeing good acceptance of our product as we combine the product and aftermarket services together for for the specific needs of data center segments. That being said, yes, we do see competition, but our product is very well accepted.
I won’t be able to comment on the market share from an export perspective. We do provide components that get into the gensets that are sold in the data center market for sure.
Umesh Raut
Understood. My last question is on the bookkeeping side. If I look at coming Inc number I think they reported about 11% decline in power generation sales for India while you have reported about 7% decline for the quarter. So what explains this particular difference?
Shveta Arya
Thanks Amish. The only difference is foreign exchange. We are reporting our numbers in INR and they are reporting the numbers in US dollars. There is no other reconciliation between those two. It’s only a dollar versus inr.
Umesh Raut
Got it. Thank you so much ma’ am. All the very best.
Shveta Arya
Thank you Mish.
operator
Thank you. We’ll take the next question. Before we take the next question, ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow up question, please rejoin the queue. We’ll take the next question from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Mohit Kumar
Hi, Good morning. Good morning and thanks for the opportunity. My question is on the implied expense. The employee expense was lower this quarter compared to compared to last compared to previous quarter and prior year. Is there any one off in that?
Shveta Arya
Thanks for the question Mohit. From a quarter to quarter perspective, yes, there is some actuarial benefit impact that is there. From a quarter perspective there is also some reclassification done for better representing the results. So there is that in the quarter on quarter numbers. But if you compare year on year numbers from an employee cost perspective, the the biggest thing over there is the efficiency improvement that we have been able to do and the leverage benefit because of the volumes that we’re getting. So that stays from an overall year number perspective also quarter on quarter last Quarter had the true up of our variable pay that we did one time which is not there this year.
So yeah, those are comparisons between quarter on quarter and year on year. Is it possible to quantify that number?
Mohit Kumar
We won’t be able to quantify that number. Sorry, go ahead. My second question of the guidance I think you give double digit guidance, my only my question is that is it between 10 to 15% or 15, 20%? Can you give us some color?
Shveta Arya
Mohit? I will have to say that we are maintaining double digit guidance while we see demand in the local market. You will appreciate that there are uncertainties in the global markets and the impact of tariffs is not completely baked in yet. So it will be very difficult to give you a very specific answer on that. Double digit is the guidance that I can give right now.
Mohit Kumar
Understood. Thank you ma’ am and all the best. Thank you.
operator
Thank you. We’ll take the next question from the line of Jason Swans from IDBI Capital. Please go ahead.
Jason Soans
Yeah Ma’ am. Yes Shweta. Thank you for taking the question. My question was actually just wanted to discuss what specific and measurable steps we are taking to basically keep the competition at bay. I understand, you know, in a, basically in a mainstay segment of hhp considering how lucrative it is, I understand that every step cannot be disclosed. But I’m just saying just if you could provide some color on how, you know, we are keeping the competition at bay and what steps are we taking towards the same.
Shveta Arya
Thanks for the question Jason. So from a what we are doing to make sure that our products are better accepted by the customer. So there are a few things that we are doing very specifically. One of the things we are working on for power gen segment is looking at segments and providing a full fledged solution for the segment tailored to the segment. So what do they need from a product perspective? What value adds do they need in the product, what aftermarket support we provide and how we provide all of that tied in together is tailored to the segment and we do a lot of data and analysis from that perspective.
So that is one of the things that we do. We also continuously keep looking at the product and getting field data to ensure that product improvements are happening continuously from a quality perspective, from a cost perspective and you know that is across segments. You rightly pointed out high horsepower but that work happens across segments and we keep in touch with our customers to hear their voices continuously on what they would need from a value add perspective and how they are changing their buying behaviors to align with them. Those are the very specific Things that we do.
Jason Soans
Okay, thanks for the detailed answer Shweta. My next question was in terms of capex we have FY25, we basically invested around 230 crores. So just wanted to know in FY26 how much capex are we looking at and what areas are we looking for? What areas are we looking to augment?
Shveta Arya
Yeah Jason, if you could go on mute and I’ll then answer you. So from a CAPEX perspective we will continue in the coming financial year in the same range and this is largely sustenance capex. We will continue to look at our lines and upgrading them as per the requirements. This is what our CapEx will go toward. It will continue almost in the same range as you saw in the current financial year.
Jason Soans
Okay, thanks. Just my last question would just want to know if you can share you know, revenue and pat numbers for Commons generator as well as valuable income and if any outlook for the associated with jv.
Shveta Arya
Yeah, I’ll just let Prasad answer that question.
Ajay Patil
Hi Jason, the revenue for Cummins Generator technologies was somewhere around 1980 crores and the same for Valvoline Cummins was somewhere around 2,350 crores for the full year. And Pat.
Shveta Arya
We don’t share those specific numbers Jason. Okay, sure.
Jason Soans
Thanks. Thanks. Those who are my questions. Thank you.
Shveta Arya
Thank you. Thanks Jason.
operator
Thank you. The next question is from the line of Renu Bed Bugalia from IIFL Capital Services. Please go ahead.
Renu Baid Pugalia
Yeah hi, good morning team and congratulations on the strong performance. My first question is last quarter we have seen the transition in the industrial segment for range of products. So if you can share market inputs in terms of how was the product acceptance, any potential share gain or loss with respect to OEMs and the pricing. Impact is the second. That’s the first question.
Shveta Arya
Thanks Renu. Renu, our presence in that segment is very limited. What we have seen is there is acceptance of the product but our presence is very limited and as compared to the remaining segments it’s a small portion of our overall sales. Any color on the pricing impact of our solutions in this segment? Nothing specific and no specific trend that we’ve observed. Renu, just as any other emission change, pricing takes a while to settle down in every single segment and that’s what’s happening there. So there’s no specific trend or no specific information that I can share at this stage.
Renu Baid Pugalia
Sure. Secondly, if you can also share some inputs in terms of how has been. The sub segment performance within the industry. Bucket and on an annualized basis how. Do the revenues stack up across construction, marine, mining, railways compresses the key categories that you operate.
Shveta Arya
So from a breakup for the industrial business unit quarter, I’m talking only about the quarter four construction segment we had 168 crores of sales, rail 114 crores, mining 14 crores, compressor 50 crores and then the others. And from a full year number perspective we have construction segment at 624 crores, rail at 471 crores, mining at 131 crores, compressor segment at 203 crores and then there are others. So I hope that helps with the breakup.
Renu Baid Pugalia
Sure. And the outlook across some of these segments, including new product introductions.
Shveta Arya
Yes. So from a rail market perspective, we do have orders across the power car and diesel electric tower car and the order velocity has been sustaining.
So we maintain a positive outlook on rail. Construction segment is continuing at a stable growth that we have been seeing in the last few quarters. Compressor business is actually a cyclical business and from our understanding perspective we should see a dip coming in in the compressor segment which we have not cited yet but we anticipate based on the last few years of our analysis the compressor segment to get into the cyclical phase. Mining, we were anticipating mining order board to start building up. What we are seeing is a shift and we have been seeing this for the last few quarters more shift towards private miners and coal India tenders are getting shifted out.
The tenders which were supposed to be released in these quarters have not been released. So our anticipation was better outlook for mining when we started the calendar year. But it’s not turning out to be like that. We are watchful and we are working with the private miners. But the coal India tenders are not coming in as we anticipated. So I hope that gives you a color around mining, construction and rail which is the larger segments. And just follow up on this on Vande Bharat and related new products for the rail market by when do we expect commercial orders to kick in in this segment of the market? Yeah, so we are done with field trials of one of the products that we had launched a while ago which was called the hotel load converter.
And we are just on the anvil of getting regular orders for that product. As you can probably appreciate that some of these require extended field trials for more than a year or so. So we are anticipating orders for the Hotel Load converter. We are now getting into the production work for another application of the railways which is called the accident relief train. And this will take a few years for the production and the trials to happen and after that we will start seeing regular orders. So work ongoing.
Renu Baid Pugalia
Thanks much and best wishes to you. Thank you.
Thank you.
operator
Thank you. The next question is from the line of Amit Anwani from PL Capital. Please go ahead.
Amit Anwani
Hi, thanks for taking my question. My first question is on export. Despite this quarter was quite strong relatively and we have been talking about the cautious chance on export. So wanted to have more color which geographies geography wise. If you could highlight which geographies we are expecting to decline or improve over next 12 to 15 months and any color on contribution of geographies in export this year.
Shveta Arya
Yeah, thanks for the question Amit. So from an exports perspective for this year, the year went by. I can share with you that Latin America and Europe did really well for us, have continuously been doing well for us. We provide our products around the world and it is difficult to say that in the next financial year which particular geography will continue to grow for us. We have seen definitely that Europe and Latin America consistently been growing in the past every quarter for us. Will that continue in the future? Is a difficult question to answer. Like I said, there is uncertainty in the global environment.
The different trade deals and now the tariff impact in the US are still being worked out. Geopolitical situation is still not absolutely normal and our efforts to position the right products continue for every market at this point in time. Very difficult to tell you which segments we anticipate growth from.
Ajay Patil
Right. Second question again on the margins. So we did a great job with respect to the. As I said a lot of efforts went into with respect to value add products and the contributions and the gross margin has been improving from past 23 years. Wanted to understand is there further scope of improvement and can this margins sustain at current level since we are focusing on more value added products some color on directionally what we are looking for next two years.
Shveta Arya
Thanks Amit. So Amit, we have been working as I mentioned on cost reduction efforts of our products and providing value add to the customers. That endeavor continues and that is what is exactly where we can put in our efforts. Other things that impact our gross margin are the product mix and how the pricing plays out in the market. So we continue to watch that our endeavor is definitely to sustain or better these margins and our cost optimization efforts are ongoing. That’s. That’s the best I can share at this point in time. And what’s the current capacity utilization. Between current capacity utilization would be very close to 65%.
Amit Anwani
Yeah, thank you so much for answering my questions. Thanks.
Shveta Arya
Thanks Amit.
operator
Thank you the next question is from the line of Sumanta Khan from Edelweiss Mutual Fund. Please go ahead.
Mohit Pandey
Good morning. Thanks a lot for the opportunity. Now I understand that you know the pricing on the CPCP for gensets would stabilize. Probably it would need another quarter or two. But don’t you think it’s quite a good outcome that you know you’ve been still been able to hold on to the pricing and I think it’s been almost six months that we are only selling CPGB4 now.
Shveta Arya
Yes, I can. I mean that’s what our endeavor is. Definitely it will take another quarter or two to settle down and we are watchful and like I mentioned earlier, our focus is to go segment wise in powergen and provide the right product, the right services segment wise. So we do not look at pricing across the board in one particular way. We go and do deeper analysis segment by segment on what the segment needs, what their buying behavior is, what are the value adds they need. And that’s how we define our pricing. And that is probably one reason why we’ve been able to hold on and provide the right value to the customer for which they are ready to pay those kind of prices.
So it is a very, very nuanced strategy that we are following.
Mohit Pandey
Thank you. My second question is again on the exports. Now as I understand, correct me if I’m wrong, there are certain lower emission non products I think and probably below you are one of the few manufacturing units in Cummins Global who still manufacture them. So my question is that are you seeing demand? Have you seen Latam is doing well? Is it this segment which is helping you and the fact that probably you are one of the few entities which continue to manufacture these products.
Shveta Arya
That is right. That is right. We continue to be the place from which we provide these products. Also I did share that it is our effort to position ourselves rightly in those markets. If you look at Europe, Europe by itself is many markets. So Italy behaves differently from France differently to another country. So we have gone down into those kind of details, done an assessment of how we place our products, at what price point, what is competition doing, what are the products they need. So we’ve done a lot of that effort as well. Similarly for Latin America every market behaves differently.
Chile would behave differently from Peru to Colombia. So there are market based efforts and yes you are right, there are these non emissionized products and we are the ones supplying those in these markets.
Mohit Pandey
Thank you. Thanks a lot for the opportunity.
operator
Thank you. The next question is from the line of Uttam Kumar from Evandes Park. Please go ahead.
Uttam Kumar
Good morning. Thank you for taking my question. The first question is with regards to some clarity on the employee calls. I mean two things you had highlighted in your One was on the declassification itself done and the other one was on the variable pay component. Could you just give more color? Is it declassification from the employee to the other cost line item where we are seeing almost 40% increase on a bio basis. And the other one is with regards to the variable pay which you stated. Just want to understand is it in the base here which you’re talking about is in the FY24.
That’s the first question.
Shveta Arya
Okay, Uttam, so reclassification, just like you said, it is a reclassification between employee cost and other expenses. So you’re right. And from available pay perspective, in quarter three of financial year, the last financial year we had this impact of the overall variable paid throughout which is not there in the quarter four of this financial year. So that is the difference.
Uttam Kumar
Okay, this 3Q number is talking is FY24. Am I right? Sorry, I didn’t get that question.
Shveta Arya
Upam this variable component of 3Q which is there, this is of FY24. FY20. FY25. FY25.
Uttam Kumar
Okay. Right. And the next question is with regards to the pavilion again hopping on the pricing trend. So just want to understand, I mean you had already cited that you are pricing adsense are more segment related. You go into specific products and then take a fall on that but on a blended basis. We have to talk about FY25 on the CPC 400 products. What is it? Any color on what is the percentage of price increases which would have taken or any corrections which would have taken in the last year.
Shveta Arya
I’m sorry, your voice wasn’t clear. So I’m going to ask you if this is what you asked. Did you ask that in the last year did we take a pricing increase? Is that what you asked me?
Uttam Kumar
Yes. Any price increase in the pausing segment? If so, to what, to what level or what quantum was the price increase?
Shveta Arya
No price increase. We’ve just held on to our pricing that we had introduced when we had introduced CPCB4 plus product largely.
Uttam Kumar
Got it. Thank you.
Shveta Arya
Thank you.
operator
Thank you. The next question is from the line of Subramanyam Yadav from SBI Life Insurance. Please go ahead.
Subramanyam Yadav
Thank you. Ma’ am. Ma’ am, you have mentioned a double digit growth for next year. If you could give some color on whether what is driving it, whether domestic and Specifically within power this segment, you would be driving the double digit growth.
Shveta Arya
Yeah. So from a growth outlook perspective, we are expecting power generation segment to grow across the board in the different low horsepower, medium horsepower, our segments, our distribution business continues to grow. And from an industrial business perspective there are certain segments like railways and construction segment holding on to its growth. So we are definitely looking at demand in the domestic market across our gen industrial and distribution business and we anticipate double digit growth. From an export perspective, it’s a little uncertain at this point in time. While we our endeavor is to get that kind of growth in exports.
But the tariff impact not being fully evaluated is still uncertain. So we’re more certain about the domestic demand at this point in time than expats.
Subramanyam Yadav
Okay, ma’ am. Remember the power gen base has been very high for last year and we have seen that impact in this quarter quarter also. Still we believe that this segment would be growing about 10 odd percent next year. Power gen in power gen continues to grow in the country at that pace. Subramaniam. There’s nothing different that we are seeing this year. I’m sorry if I didn’t get your question. If you can repeat it once more.
Shveta Arya
No, mama. Because in this quarter you mentioned that there were Pre buying in Q4 last year, right? Which has impacted our domestic. So already the base for FY25 is higher. So I’m expecting that the similar base effect will impact our power chain in FY26.
Subramanyam Yadav
No, no, no, no. Actually I mentioned in one of the answers earlier that CPCB4 volumes are still not all the way up to what we had seen as CPCB2 volumes. So I don’t think there’s a base effect. In fact we anticipate the volumes to.
Shveta Arya
Grow and then if you can highlight any project revenue in this quarter and for full year also. There’s nothing specific to note there. Subramaniam. It continues. It comes in certain quarters. It doesn’t come. It’s based on project execution. But overall from a year perspective there’s nothing specific to share from a project business perspective.
Subramanyam Yadav
And lastly ma’ am, if you can, how do we read into this LHP in export? Because that has been growing last quarter and this quarter. How does that impact our margin is? The margin in LHP is also very high in the export market.
Shveta Arya
It’s a blend. So I won’t be able to exactly say Subramaniam, but it’s a blend. And since we serve the entire world and these are priced differently in different markets so it won’t be easy to say that.
Subramanyam Yadav
Okay. Thank you very much, ma’ am. Yeah.
operator
Thank you. The next question is from the line of Srinidhi Karlkar from hsbc. Please go ahead.
Shrinidhi Karlekar
Hi. Thank you for the opportunity. My first question is related to a slowdown in the growth rate for the distribution segment. It used to grow at quite significantly higher number compared to 5% that we reported. Would it be possible to throw some light on this?
Shveta Arya
You’re looking at the quarter on quarter number. If you look at the whole year number, the distribution business has grown 14% quarter on quarter. There are different things that can happen. Shundali. So the December quarter does tend to be a very high volume quarter for the distribution business for various reasons. So I would suggest you look at the year on year number. And the distribution business continues to grow at a very healthy rate. 14% full year growth as compared to the last year.
Shrinidhi Karlekar
Isn’t this quarter also. YOY is 5%. Did I note that out correctly? YUI growth in this quarter.
Shveta Arya
You are right. You are right. You’re right. As compared to the last year. Yes. Yeah.
Shrinidhi Karlekar
But don’t this number. Ma’ am, I was wondering like we were even adjusted for seasonality Because I’m considering yoy number.
Shveta Arya
I understand that there can be. There can be shifting of demand between between quarters. There are large rebuild orders sometimes that we get which get executed in one quarter versus the other and they can switch the revenues. So there’s nothing from an overall market or demand perspective. I would request you to read into this. This is really based on some large order executions.
Shrinidhi Karlekar
That is very clear. And my second question is related to UK end market as we understand it is one of the large end markets for Commence India. Wondering does this whole free trade agreement between UK and India, does that help or. It doesn’t help much.
Shveta Arya
I would call out and say Europe overall Europe is a large market for us. It is not specific uk. So does the trade agreement impact us as much? It’s not such a huge contributor to the overall Europe. Mainland Europe contributes more to our revenues.
Shrinidhi Karlekar
Okay. Those were my questions. Thank you for asking them.
Shveta Arya
Thank you.
operator
Thank you. The next question is from the line of Aditya Mongya from Kotak Securities. Please go ahead.
Aditya Mongia
Yeah. Thank you for the opportunity. I’ll go ahead with my questions. The first one you talked about the current run rate in power gen being 80 85% of the usual number. Could you give us a sense of what has been the full year number in this context? And I’m assuming this is only applicable to the CPCB4 portion of power Gen. Could you also give us that number for the full year?
Shveta Arya
I won’t be able to give you that number. That was my estimate that around 85% of CPCB2 volumes in their CPCB4plus has reached. But given that the market is comprised of both CPCB2 and CPCB4 plus I won’t be able to give you that exact number. Aditya.
Aditya Mongia
Yeah, but suffice to say this should help you grow your Power Gen portfolio well into next year. Right? Because we would want to assume that in the first half itself the normalization is complete and maybe some growth incrementally. Sure. The second part of my question was there has been some charter of return of scrappage policy for 15 years or plus kind of gensets. Could you comment any views on the same and whether that can happen in this year sometime? And the benefit the return of scrappage.
Shveta Arya
Policy as a policy document has existed for a few years. Different states need to implement this. There are certain states which have actually put this into effect. You will probably understand that unlike the automotive segments, there is no registration of genset centrally happening anywhere. So in order while the policy might exist in order to implement that policy, that is where different states struggle. As of now, all states have not implemented the scrappage policy. Some have, but even there the implementation is not exactly the way it could be. So I would say the policy has existed and we continue to advocate for those scrappage policies to be implemented.
It has not happened yet.
Aditya Mongia
Sure, that helps. The last part would be on distribution. It would be useful as it’s become a large segment for us in terms of contribution. If you could in some ways help us kind of understand a breakup of the same and the key drivers inside would help us then think through growth in a slightly better manner. So any color on the same. Thank you.
Shveta Arya
Distribution business serves our power generation segment and industrial segment. And in the industrial segment these are long term contracts with our customers. In Power Gen as well there are contracts that we enter into with our customers also provide services like extended warranty. There has been a lot of effort. We have been putting on penetration in the Power Gen market that has yielded results. There are a lot of rebuilt engine orders that come to us from the industrial market, also from Power Gen but largely from the industrial market. Those are the specific things that are helping us.
Along with that, the distribution business focuses on new product launches which are value adds to the customer. So how can the retrofit emission control devices, the dual fuel kits, the Cummins retrofit devices. All of these are efforts that the distribution business made. These are the things that have contributed to the growth in the distribution business segment.
Aditya Mongia
Just on this point, why I asked this question to you is that obviously your predecessor used to talk, Ashwath used to talk about a five year Runway. Is that something that you kind of see happening from here on or should one be having a lower time frame of growth? And then I’m just trying to get a sense of the penetration gains and that that can hold this segment in good stead over long term.
Shveta Arya
If you’re asking me very specifically the question on distribution business and its growth outlook, so we are very positive on the growth outlook and it will also grow at double digit or better and that is the growth path. We have seen the business grow across all these segments that I spoke about and the efforts are yielding results. So we are positive about the distribution business growth.
Aditya Mongia
Thank you so much. Those are my questions. Thank you.
operator
Thank you. The next question is from the line of Sourav from Oakland Capital. Please go ahead.
Sourav
Yeah, hi, am I audible? Yes, yes, hi ma’ am. So my question, the first is we all know that data center demand is pretty strong. So what I want to understand is are we constrained by capacity in terms of servicing this demand? And so what are your thoughts there? And second, last year we said that we categorically want to increase our market share in LHP and LHP and you said that you have kept your prices firm and competition is pretty high. So have we been able to gain share in that or not? Thank you.
Shveta Arya
I’ll answer your data center question first. Are we capacity constrained? No, we are not capacity constrained. We have capacity. Our product is very well accepted in the market so we are well positioned to cater to the needs of the data center set. And as far as growth in the LHP and mhp, our endeavor is to grow across segments, not just LHP and mhp. There are different efforts that go in growing in lhp, MHP and hhp, but we’ve gone even beyond that to get into customer segments and define what our growth and strategies are for different customer segments.
So we are looking at growth across these segments. If I were to put it across.
Sourav
But what about that was made in last few calls that we want to increase our share in MHP and mhp. So how should we read that?
Shveta Arya
I don’t think we have ever made a specific comment of just we definitely want to grow in the lowest part segment. But that goes without saying that we also have aspirations to grow in the MHP and the HHP segment.
Sourav
So yeah, sure. Thank you. Thank you ma’ am. Thank you very much.
Shveta Arya
Thank you.
operator
Thank you. The next question is from the line of amit Mahavar from UBS. Please go ahead.
Amit Mahawar
Yeah. Congratulations on great fiscal 25 especially in managing the competition. Very well, ma’ am. FY26, you know, because in FY25 we enjoyed a lot of benefits. We had pre buy a very strong high KVA growth, a lot of cost adjustments that we could manage to counter the price impact of new nodes that competition is launching. Distribution grew 14% plus we had data center which did very well. FY25 what is the market share that we have of CP CP4 4 plus for the full year for Cummins? And second question is how do you see these levers changing in 26? Can the industry tam right which is growing in maybe double digit for you? Can the EBITDA industry EBITDA pool grow in double digits? These are the two questions, ma’ am.
Thank you.
Shveta Arya
I won’t be able to comment on the CPCB4 plus market share but from an outlook of the market perspective, if we are specifically talking power gen because that’s what you mentioned. Yes, yes, for now we do see demand Amit, across segments coming in. Some of this demand will be fulfilled in this quarter, some in the next quarter. So we have not cited any trend as of now which would worry us. So we are seeing demand. That’s the best I can share with you today. There is decent inquiries and decent orders being generated across segments and we have not cited any particular signs which would worry us.
Amit Mahawar
Okay Shweta, thank you and good luck.
Shveta Arya
Thank you.
operator
Thank you. The next question is from the line of Ashish from mlp. Please go ahead.
Unidentified Participant
Hi Kshwetra, can you hear me? Yes, hello. Yeah, sorry. So for distribution business. For the distribution business. Now with the new CPCB engines coming with a higher warranty, should we expect the growth in the distribution business to moderate or. That would not really matter.
Shveta Arya
So ashish, with the CPCB4 plus coming in the warranty period is still the same. What we offer is extended warranty which we have packaged in a product called Ashwasan which the customer has the choice to buy. We actually anticipate our penetration to grow because we have few quarters ago we had launched the Ashwastan product and now it is available for even the CPCB4 range. So we actually anticipate our penetration to get better.
Unidentified Participant
Understood. And how do we classify this? This is a part of genset or this income comes as distribution Distribution. Okay. And just one small question on price. Understood. And just one last question on pricing. How should we think about pricing settling down over the next couple of quarter like any range. Are we talking talking about 2 to 5% decline or more than that? Any, any rough ide could be very helpful.
Shveta Arya
I won’t be able to give you that kind of an assessment Ashish. We are analyzing the market and we don’t have that kind of number specific that I can give you.
Unidentified Participant
Okay. And in our guidance when we give a double digit we would have some idea of how much is the pricing impact and how much volume we are expecting to grow. So anything around that would be very helpful.
Shveta Arya
That’s our endeavor Ashish. And it is across the kind of penetration we want in the distribution business. The tenders that we anticipate winning in the industrial business segment and in the power gen segment across lhp, mhp, hhp. So yes there is some amount of anticipation across the board on product mix, on pricing built in there. How it plays out is very very difficult to share at this point in time or predict.
Unidentified Participant
Sure. Thank you so much for the opportunity.
Shveta Arya
Thanks Ashish.
operator
Thank you ladies and gentlemen. We’ll take that as the last question for today. I now hand the conference again over to Ms. Shweta Arya for closing comments. Thank you. And over to you ma’ am.
Shveta Arya
Thank you. Thank you so much everyone for your active participation and engagement during the call today. Cummins India maintains a stable economic outlook as Indian market continues to be resilient. India’s GDP is projected to grow by 6.5% in financial year 26. Although some uncertainties remain regarding changes in global trade policies. Indian reforms are focused on deepening economic cooperation and prioritizing infrastructure development. Backed by a strong balance sheet, world class manufacturing infrastructure and top tier talent. The company’s growth trajectory remains strong. With this I close this call. Thank you so much everyone.
operator
Thank you members of the management, on behalf of Cummins India limited and the leadership team we would like to thank you for joining us today and making it engaging session. We are ending the conference now and you may disconnect your lines. Thank you.