Income Tax Alert: Cummins India Gets Rs 210.29 Crore Tax Relief: Buy The Diesel Engines Maker Stock?

Cummins India, a manufacturer of diesel and natural gas engines, is going to be in focus on BSE and NSE next week as the company received a big favour from the Income Tax Appellate Tribunal (ITAT). The tribunal has granted a major tax relief of whopping Rs 210.29 crore on Cummins India. This large-cap stock which is trading above Rs 4,400 is currently nearing its 52-week high. The highest target price is set above Rs 4,950.

Cummins India Tax Relief:

In its regulatory filing, Cummins India said, "we now wish to inform, that the Income Tax Appellate Tribunal (ITAT) has passed a favourable order for the Financial Year 2017-18, granting relief in respect of adjustments aggregating to Rs 210.29 Crores, redirecting to Assessing Officer for revalidation of Rs 13.11 Crores and upholding a disallowance of Rs 0.48 Crores."

Cummins said that they are in the process of evaluating further action in relation to the disallowance.

Cummins India Share Price:

After the trading hours on December 19, Cummins India stock price ended at Rs 4407.60 apiece on BSE, up by 0.6% with market cap of Rs 1,22,178.67 crore.

YTD, Cummins stock price has outperformed benchmarks like Sensex and Nifty. The stock surged by nearly 36.3% so far in 2025.

Should You Buy Cummins India Stock Ahead?

The consensus recommendation from 21 analysts for Cummins is BUY, as per Trendlyne data. A recent report by Motilal Oswal said the company stands far ahead of the competition in terms of overall product offering and distribution reach.

Analysts at Motilal said, Cummins India (KKC) once again reported a strong set of results with a beat on all parameters. Revenue growth was led by sharp growth in powergen and healthy growth in distribution and exports. The industrial segment was impacted by slow construction activity. KKC has grown its CPCB 4+-related portfolio by 20% YoY, which indicates a healthy YoY volume improvement.

They expect Cummins India to continue to benefit from 1) demand improvement in the powergen segment as industry volumes have now improved back to pre-emission levels, 2) a fairly strong outlook for data centers, 3) improved penetration for the distribution segment, and 4) a gradual recovery in exports. KKC stands far ahead of the competition in terms of overall product offering and distribution reach.

Hence, on the valuation, they said, "We raise our estimates for FY26 and largely maintain our estimates for FY27/28. We expect KKC's revenue/EBITDA/PAT CAGR of 16%/16%/17% over FY25-28 and build in an EBITDA margin of 21.2%/20.0%/20.1% for FY26/27/28. Our estimates factor in a gross margin of 36% in FY26 and 35% in FY27/28 vs. 36% in FY25, since we expect some gross margin contraction as price levels for CPCB 4+ normalize."

Thereby, they recommended BUY on Cummins India with a target price of Rs 4,950, which signals a potential of over 12.2% upside ahead.

About Cummins India:

Formed in 1962, the largest entity of Cummins in India, Cummins India Limited is the country's leading manufacturer of diesel and natural gas engines. One of the seven legal entities of the Cummins Group in India, Cummins India Limited comprises three business units - Engine, Power Systems, and Distribution.

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