On May 6, 2025, Cummins India’s share price took a significant hit, plummeting over 7% to ₹2,774 per share on the National Stock Exchange (NSE). This drop came after the company’s parent organization decided to retract its full-year financial forecast, a move prompted by the economic turbulence stemming from tariff policies introduced by former U.S. President Donald Trump. Alongside this announcement, Cummins reported its earnings for the March 2025 quarter, revealing troubling trends.

CEO’s Insights on Economic Challenges

Jennifer Rumsey, the CEO of Cummins, expressed concerns regarding the unpredictable economic landscape. She indicated, “The current outlook for the remaining year is uncertain, but we firmly believe that our Destination Zero strategy is the right path forward. Cummins is well-positioned to handle these economic challenges, and we are hopeful about reinstating our forecast when the situation stabilizes.”

Impact of Tariffs on Revenue Projections

Previously, Cummins had anticipated a modest revenue growth between a 2% decline and a 3% increase. The parent company expected its PowerGen segment revenues to rise by 5% to 15%. For the Indian market, the forecast included a 10% growth in revenue, which also factored in its unlisted joint venture entities. However, the newly imposed tariffs have led to a complete withdrawal of all prior guidance.

Quarterly Performance Highlights

In the latest quarter, Cummins India experienced a 14% decline in total revenue compared to the same quarter last year, including earnings from its joint ventures. Notably, Cummins India remains the sole publicly listed entity among these partnerships. The PowerGen segment, which is crucial to Cummins India’s performance, saw an 11% drop in revenue year-over-year. This decline was largely due to inflated figures from the previous year, driven by preemptive purchases ahead of major emission regulation changes.

Conclusion: Navigating Uncertainty

The recent developments signal a challenging period for Cummins India, particularly as its financial health is closely linked to the performance of the PowerGen segment. Investors and stakeholders will be watching closely for any signs of recovery and potential reinstatement of forecasts in the coming months.

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