Cummins India Ltd Management Discussions

1. Industry Structure and Developments Economic Trends and Implications - The global economy navigated a more challenging landscape in Financial Year 2025-26. While underlying resilience was evident in labour markets and private consumption, the year was marked by an increase in trade policy uncertainty. Global growth is projected to remain resilient at 3.3% in 2026 and at 3.2% in 2027, at rates similar to the estimated 3.3% in 20251, as the world adjusts to a landscape reshaped by heightened protectionism and policy fragmentation. Monetary policy across major economies continued its easing trajectory, with several central banks reducing benchmark rates as inflation continued to moderate. Global inflation is expected to decline from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 20271.

- The Indian Economy delivered a strong performance in FY 2025-26 with real GDP growth estimated at 7.6% compared to 7.1% recorded in FY 2024-25 under the new measurement framework with base year 2022-232. This broad-based growth was supported by healthy agricultural output, income tax and GST rationalisation measures, front-loaded government capital expenditure, and a benign inflationary environment. Core industry output has reported a growth in FY 2025-26 driven by higher output of cement, steel, and power sectors3. Gross Fixed Capital Formation remained structurally important, growing at 7.8% in FY 2025-262 compared to 7.1% in the previous FY supported by continued public capex push and gradual revival of private investment.

- Infrastructure development continues to remain a key priority in government policy, with the Union Budget 2026–27 raising capital expenditure to a new record high of H12.2 lakh crore, reinforcing the governments sustained emphasis on infrastructure-led growth. Investments remain focused on roads, urban rail, energy grids, and logistics, and are expected to generate strong multiplier effects. The Dedicated Freight Corridor and Multi-modal Logistics Parks continue to advance, with Gati Shakti Cargo Terminals being commissioned, progressively reducing logistics costs and enhancing the competitiveness of Indian goods in global markets.

- The manufacturing sector demonstrated renewed vigour in FY 2025-26, supported by continued policy impetus. The manufacturing sector is expected to gain traction, driven by rising domestic demand, higher capacity utilisation, and supportive government policies including the PLI scheme and the National Manufacturing Mission. Indias positioning as a preferred destination for supply chain diversification strengthened further during the year, as global businesses accelerated footprint rebalancing strategies in response to trade tensions. Technology adoption accelerated, with increased deployment of Industry 4.0 solutions, automation, and digital supply chain platforms across sectors.

- Sustainability and decarbonisation achieved landmark milestones in FY 2025-26. India achieved a total non-fossil capacity addition of 55.3 GW during the year, ranking third globally in renewable energy installed capacity4. Energy storage systems continued to attract growing investment as a critical enabler of renewable integration and grid stability.

- The overall growth outlook, while positive, faces meaningful headwinds. External demand prospects remain uncertain amid ongoing tariff announcements and trade negotiations, alongside prolonged geopolitical tensions and financial market volatility, all of which pose risks to the growth outlook. Commodity and energy markets remained volatile through the year, with crude oil prices subject to swings driven by OPEC+ production decisions, demand moderation in key economies, and geopolitical supply disruptions. For India, which remains a significant net importer of crude oil, movements in energy prices have direct implications for the current account, domestic inflation, and input costs. The ability to manage this external volatility while sustaining domestic consumption and investment momentum remains the central macro-policy challenge.

2. Opportunities and Threats

Key Opportunities

Power Generation

- FY 2025-26 witnessed robust growth for Power Generation market driven by strong business activity and economic growth across industries. Key segments driving the growth for the Power Generation market included Datacentres, Commercial Realty, Manufacturing, Infrastructure and Quick Commerce

- Datacentre segment for India is witnessing strong and sustained growth, and the company is positioned well to utilise the existing product portfolio tailored for this segment. However, the business is characterised by variability aligned with timing of large project executions and customer commitments.

Industrial

- Railways: Indian Railways achieved its electrification target with over 99% of its broad-gauge network of about 68,000 kms electrified as on 31 March 2026. Indian Railways is expected to lay 50,000 kms of new tracks over next 8-10 years. Demand for Diesel Electric Tower Cars (DETCs) is expected to be stable for next 2-3 years. To improve track safety and reliability, Indian Railways initiated procurement of 400+ Track Maintenance Machines. This large scale procurement reflects sustained investments in mechanised track inspection, maintenance and renewal activities, driven by increased traffic density, higher sectional speeds and the operationalisation of Dedicated Freight Corridors. Such initiatives are expected to support steady medium term demand for track maintenance equipment and associated propulsion and power solutions.

Following the implementation of CPCB IV+ emission norms, The Company has continued its sustained scale up of supply and execution of Power Car DA sets and associated systems for Power Car applications in Linke Hofmann Busch (LHB) passenger coaches. These products continue to demonstrate stable performance in service and reinforce The Companys presence in regulated railway applications. Indian Railways is expected to produce 7500 LHB coaches per year for next 2 years that should result in sustained demand for Power Car DA sets.

In line with Indian Railways objective of achieving net zero emissions by 2030, pilot initiatives are underway for alternative propulsion technologies. During FY 2025 26, Indias first hydrogen powered trainset successfully completed oscillation and trial runs on select routes, marking a significant milestone under the Hydrogen for Heritage initiative. While such deployments are currently at a pilot stage, they indicate a long term shift toward low and zero-emission rail mobility. The Company continues to closely monitor these developments and remains open to participation through relevant technologies as & when the ecosystem evolves in a sustainable manner.

- Mining: India has achieved a one-billion-tonne Coal Production second year in a row, which will strengthen countrys energy security. Coal continues to be a cornerstone of the economy, powering over 74% of Indias electricity and meeting roughly 55% of the total national energy demand. Growth in domestic coal production is expected to have a favourable impact on the Heavy Earth Moving Machinery (HEMM) market in the medium term for which the Company is a critical technology partner to leading OEMs. The company has also made higher inroads into the Underground Mine trucks, Motor Graders, Dozers and Stone Crusher segments with its wide range of engines for each of these applications.

- Marine: Indian Navy and Coast Guard have undertaken a fleet expansion and modernization plan backed by the ‘Aatmanirbhar Bharat initiative of the Central Government. The Union Budgets proposal of a H25,000 crore Maritime Development Fund reflects the governments continued focus on strengthening the marine and shipbuilding sector. Large government and private shipyards have announced initiatives aimed at supporting inland water transport and enhancing port infrastructure, contributing to increased activity in the commercial marine space. Government funding towards green ship building and availability of easy financing is expected to sustain demand over next few years. The company is well positioned to capitalize on these market opportunities and has made significant inroads by securing and delivering complex projects with engines and generator sets for Green Tugs, Multi-Purpose Vessels, New Generation Offshore Patrol Vessels, Ocean Research Vessels, Fleet Support Ships and Submarine applications.

- Oil & Gas: Strong momentum in city gas distribution network expansion due to planned increase in CNG stations from 8,700 now to 17,000 by 2030. In line with this, the Company continues to supply gas compression engines to leading OEMs, reinforcing its established presence in this space.

- Defence: Allocation of funds by Government of India to focus on indigenous design, development, and manufacturing, along with promotion of exports of defence equipment is expected to boost domestic production and sustain multi-year growth. The Company is positioning itself for long term sustainable growth on critical technology engine platforms through collaboration and strategic partnerships with OEMs in this sector for both wheeled and tracked applications. The company has been able to seed its engines for Advanced Towed Artillery Gun Systems & Light Tanks platforms which are expected to grow significantly in the medium term.

- Pumps: The Company is pursuing selective growth opportunities in this segment, aligned with current market dynamics and demand conditions. The introduction of FMUL engine in HHP range are opening Local and Global opportunities for growth with leading OEMs in this space.

- Construction: The construction sector is poised for rapid growth over the next decade, driven by an accelerated pace of infrastructure development and substantial government capex. Continued public capital expenditure and strong private sector participation are driving increased demand for construction and earthmoving equipment. As a leading engine supplier in the construction equipment industry, the company has forged strong partnerships with OEMs, positioning well to capitalize on the favourable industry trends. The company is also working to expand the product offerings aligned to the emerging market requirements, which are expected to help us to address new market segments.

*Sources: Ministry of Railways, IROAF - Indian railways Organization for Alternate fuels, Ministry of Coal, Ministry of Petroleum and Natural Gas, Ministry of Defence, Ministry of Road Transport and Highways and India Investment Grid – Government of India, PIB India; Indian Express; Indian Infrastructure; Government of India portals

Distribution

- The National Green Tribunal (NGT) and the Commission for Air Quality Management (CAQM) have strengthened regulatory measures in several regions, mandating the retrofitting of diesel generators with emission control solutions. The emphasis on cleaner energy alternatives by the government will increase demand for Dual Fuel Kits (DF kits) and Retrofit Aftertreatment System (RAS).

- Growth outlook for the PowerGen business is positive on the back of strong demand for uninterrupted power supply from datacentres, healthcare, and commercial realty segments. This will fuel aftermarket demand for maintenance, spare parts, and service contracts, ensuring long-term business opportunities.

- Government focus on infrastructure development, rapid urbanization, and increased construction activities is set to drive demand for heavy machinery and equipment across the construction sector. Investment in the infrastructure sector and the increasing pace of project delivery will further boost the utilization of equipment leading to the requirement of maintenance and better aftermarket revenue.

- The Indian Railways is rapidly expanding its infrastructure with high-speed rail initiatives, modernization programs, and the Dedicated Freight Corridor (DFC) projects. Growing demand for reliable maintenance, efficient operations, spare parts, and service contracts will drive aftermarket growth. The company is actively positioning itself as a one-stop solution partner to Indian Railways (IR), expanding beyond engine checks to offer a broader service portfolio.

- Indian mining industry is increasingly adopting green mining techniques and circular economy models to reduce its ecological footprint. This shift is expected to fuel growing demand for Dual Fuel (DF) kits among customers.

- The governments strong push for Make in India in the defence sector, along with increased focus on strategic stockpiling of critical components amid rising geopolitical uncertainties, is creating significant opportunities for indigenous engine manufacturers.

Exports

- The Company continues to pursue opportunities to grow the PowerGen exports market by focussing on segments like manufacturing, realty and rental.

- The Company is seeing uptick in demand from Manufacturing and Realty in Asia Pacific and residential and low commercial markets in Europe and Latin America.

Key Threats

Power Generation

- With the domestic players expanding their product ranges and international players gaining foothold in the region, competition is intensifying in Powergen segment. As a result, pricing pressure is intensifying across the industry.

- Global supply chain dynamics, raw material availability, and evolving tariff structures may introduce a degree of input cost variability. The Company continues to monitor these developments closely to ensure timely fulfilment of customer commitments.

Industrial

- Railways: With near-complete electrification of the broad-gauge network of Indian Railways, increasing the requirement for Diesel Electric Tower Cars (DETCs) for overhead maintenance, incremental demand over the medium term would remain contingent on the timing and scale of Indian Railways procurement decisions.

While The Company continues to invest in electrified product offerings, including Hotel Load Converters and propulsion systems for Self-propelled Accident Relief Trains, this segment remains highly price sensitive and is characterised by relatively longer payback periods, which may impact the pace of market adoption.

- Mining: Private Mine Developers and Operators securing long term contracts is likely to slow down procurement of Heavy Earth Moving Equipment. Timely allocation of coal blocks to private players and ramping up of coal production is critical to sustain demand for mining equipment. Low utilization of existing fleets may also impact demand of Heavy Earth Moving Equipment.

- Oil & Gas: The short-term impact of gas availability & vulnerability in prices due to geopolitical tensions is a potential risk. The Gas Compression segment moving from engine driven to motor driven compressors may also keep demand subdued in the city gas distribution segment.

- Construction: The transition toward next-generation emission norms continues to shape the industry landscape. While the Company remains fully prepared with advanced technology platforms compliant with upcoming ORCM Stage V emission standards, the timing of regulatory notifications, particularly for tracked excavator applications, may influence the pace of adoption of new technologies in certain segments. Nevertheless, the Companys readiness with advanced clean diesel solutions, positions it well to support OEM partners as regulatory transitions take place.

Distribution

- The distribution business continues to benefit from a growing genset installed base; however, the low utilization profile of standby applications structurally moderates aftermarket intensity per asset, potentially tempering revenue growth relative to base expansion.

- Variability in capital procurement cycles within the mining sector could moderate near-term demand and the pace of installed base growth, with a consequent impact on the pace of aftermarket revenue expansion.

- Rail electrification is expected to limit diesel engine deployment to niche applications such as Diesel Electric Multiple Units (DEMUs and power cars, which may reduce the overall maintenance intensity of the installed base, even as the company participates in emerging application segments.

- Intensifying competition in the on-highway aftermarket, driven by the increasing adoption of lower-cost ‘will-fit parts and the introduction of OEM second-line brands, may exert pressure on pricing and impact share of wallet for genuine parts.

Exports

- The Company anticipates volatility in demand due to ongoing geopolitical conflicts and supply chain disruptions.

- The Company is experiencing strong competitive activity in the Powergen segment. Global OEMs as well as Genset assemblers are driving increased competition in the market.

3. Product-wise Performance

Power Generation

- In FY2025-26, the Company has successfully delivered 26000+ gensets across India, with strong adoption in key regions.

- The Company witnessed increased traction for its CAQM-compliant and datacentre-focused product offerings, supporting growth in the Powergen portfolio

Industrial

- Railways: The Company has strengthened its market presence with Indian Railways through the supply of complete DETC propulsion packages, CPCB IV+ compliant diesel alternator sets, Engines for Track Maintenance Machines & Shunting locomotives and Hotel Load Convertor (HLC). The company is working actively to deliver the developmental order secured for propulsion systems for High-Speed Self Propelled Accident Relief Trains, Self-Propelled Inspection Cars, 40/50 kVA Under-slung DA Sets for Self-propelled Inspection Car (SPIC).

- Marine: The Company has successfully secured multiple complex projects from leading shipyards to build engines and gensets for a wide range of defence and commercial vessels. These projects highlight the Companys growing presence in both propulsion and high-capacity power generation solutions for leading shipyards. The company continues to grow significantly in the commercial marine segment driven by higher penetration and entry into new platforms like green tugs and research vessels.

- Defence: The Company has strengthened its capabilities across key defence mobility platforms, supporting a range of critical applications. A prototype engine developed for a strategic defence program has successfully completed field trials and is well-positioned for deployment across multiple platforms. Prototypes have been successfully delivered for various wheeled applications to leading OEMs.

- Construction: The Company continues to hold a strong position in the excavator engine segment. FY 2025–26 marked the first full year of operations with the Companys CEV BS V compliant product portfolio in the wheeled application segment, reinforcing its commitment to technological leadership and regulatory compliance.

Distribution

- The Company delivered strong growth driven by a strategic focus on the opportunity to re-power engines by providing cost-effective solutions and creating value across key segments like Railways, Defence, and Powergen.

- The Company strengthened structural revenue by signing new rate contracts and renewing existing ones with customers across mining, infrastructure, and railways. This resulted in higher parts business, while improving price discipline, predictability, and long-term account retention.

- The Company is promoting the applicability of DF Kits beyond power generation segment. A successful pilot in the mining segment, leveraging a variable-speed DF Kit solution, has resulted in enhanced customer engagement and generated encouraging interest from potential customers.

- The Company is installing a Battery Energy Storage System (BESS) at the Master Rebuild Centre (MRC), Phaltan to support Balance of Plant (BoP) testing. The installation will act as a demonstration site, showcasing the solutions capabilities and supporting future customer engagement.

Exports

- Export revenue growth during the year was driven by strong demand for low-horsepower products in Africa, the Middle East, and Europe, alongside continued traction for high-horsepower PowerGen solutions across key international markets, including Europe, the Latin America, Asia Pacific and China

4. New Business Initiatives for Financial Year 2025-26

Power Generation

- The Company launched a new 82.5 kVA CPCB IV+ compliant genset, expanding its Powergen offerings and catering to demand across infrastructure and commercial applications.

- Focusing on customer needs, significant steps were taken to improve the power density of products to reduce the total cost of ownership, lower the maintenance cost and provide the benefit of a smaller installation footprint.

Industrial

- Railways: The Company has succeeded in testing and shipment of 40kVA Underslung DA Sets for Self-Propelled Inspection Cars. The company has also secured approvals for serial production of Hotel Load Converters from Indian Railways.

- Mining: The Company continues to innovate and develop fit-for-market products for large mining OEMs to expand its presence in domestic and international markets. The products introduction in the mining equipment like Underground Mine Trucks & Dozers are expected to accelerate growth in the coming years.

- Marine: The Company continues to gain traction in the marine segment, delivering value to both government shipyards through complex long-term projects from Offshore Patrol Vessels to Fleet Support Ships and to commercial shipbuilders across the country on multiple applications including Green Tugs and Ocean Research Vessels with diverse range of engines and generator sets.

- Defence: The Company has consolidated its position on critical technology platforms for both wheeled and tracked applications and has secured new orders for specialized vehicle applications from Defence OEMs. The

Company is well positioned for growth on the Advanced Towed Artillery Gun Systems and Light Tanks platforms in coming years.

- Pumps: The Company has successfully expanded its product portfolio with high-speed ratings of FM/UL certified engines for the pumps segment and is actively pursuing growth opportunities with global OEMs in both domestic and export markets.

- Construction: The Company will continue to focus on expanding its product portfolio with unregulated and electronic engines for higher tonnage excavators, which continues to offer excellent value proposition to our partners. The Company is fully ready with advanced engines on fuel – agnostic platform with best-in-class power density and efficiency for the compressor & construction segment.

Distribution

- The Company launched its Battery Energy Storage System (BESS) solution in FY 2025–26, expanding its portfolio into energy storage applications and enabling participation in opportunities related to grid resilience and renewable integration.

- The Company introduced DATUM S, a sensor-based solution for real-time fuel tracking and data integration with IoT platforms, enhancing its capabilities in connected and data-driven offerings.

- The Company expanded its on-highway aftermarket portfolio by introducing ~10 new product categories, enhancing its ability to offer fit-for-market solutions and drive growth in the distribution business.

- To expand its presence in the growing low kVA genset segment, the Company is scaling its channel network through the appointment of specialized dealers under the LHP growth strategy. To date, 14 ‘2S dealers have been onboarded, improving reach in this segment.

- The company launched Cummins Care App focusing on delivering seamless, end-to-end support for individual users. With intuitive mobile design and real time assistance on service requests and inquiries, the app enhances customer satisfaction and builds trust.

Exports

- The company continued its efforts to improve market penetration for the LHP segment through Fit-for-Market products, Channel initiatives, Pricing and Sales penetration.

- The Company introduced uprated 50L product for Exports markets.

- Along with the improvements in products and processes, the Company is leveraging channel synergy to improve understanding of customer requirements and improve sales.

5. Achievements

Power Generation

- The Companys efforts to improve product accessibility for customers in the Powergen market continues with the expansion of the dealer channel with the GOEMs, from 127 dealers in FY 2024-25 to 133 dealers in FY 2025-26.

- In the high horsepower segment, the Company continues to execute large orders for multiple hyperscale datacentres coming up in India. Hyperscale datacentres present a huge business potential, and the Company is well positioned to expand its presence in this segment and meet the stringent customer requirements.

Industrial

- Railways: The Company has further strengthened its strategic engagement with Indian Railways through the successful development and deployment of a broad portfolio of solutions for passenger and utility applications. During the year, the Company achieved key milestones including the successful testing and supply of 40 kVA underslung Diesel Alternator sets for Self-Propelled Inspection Cars (SPIC) and the securing of developmental orders for propulsion systems for High-Speed Self-Propelled Accident Relief Trains (HS-SPART). The Rail segment has been the largest contributor to the overall revenues of the domestic Industrial Markets business.

- Mining: The Company has made inroads in Heavy Earth Moving Machinery (HEMM) market by securing orders from key OEMs on Surface Mining, Dump Trucks, Excavators and Stone Crusher segments.

- Marine: Fastest growing segment in Industrial Markets business in FY26. The Company recorded the highest ever annual sales driven by robust execution of complex projects for both government and commercial shipyards. Order Intake continues to be healthy pointing to a sustainable growth in the coming years.

- Defence: Successful delivery and field trials of prototype engine for a key program of Indian Army is expected to fuel growth on this platform in coming years.

- Construction: Driven by strong customer engagement and technological capabilities, the Company secured new business from both existing and new customers during the year. In particular, the Company recorded encouraging traction in electronic engine platforms, which provide improved efficiency, performance, and cost advantages to OEM partners. The strong trust and confidence built with leading OEM partners is also reflected in the recognition and awards received from customers during the year, highlighting the Companys continued focus on quality, reliability, and long-term partnership.

Distribution

- The Company achieved highest Net Promoter Score (NPS) globally of 90% which is the testimony of customer loyalty towards the Company, and its service support.

- The Company delivered its first end-to-end aftermarket solution involving the supply, installation, and commissioning of a repowered QSK95 DA engine for a prestigious defence application.

- The Company achieved its first Product Carbon Footprint (PCF) certification for the K50 G3 rebuild engine, awarded by Bureau Veritas, validating the lower environmental impact of rebuild engines compared to new engines.

- The Company was awarded a three-year AMC for RMPUs across LHB and conventional passenger coaches, marking a significant step in expanding its presence in the railway coach maintenance segment.

- The Company successfully validated the startability of its QSB6.7 CPCB IV+ engine under low temperature and high-altitude conditions, in collaboration with a defence OEM partner, demonstrating its capability for deployment in extreme operating environments.

Exports

- The Company witnessed sustained strong demand in PowerGen exports driven by High Horsepower products for Realty and Manufacturing segments.

- The Company also introduced 500 kVA emissionised product for Chile market.

6. Outlook and Initiatives for the Current Year and Thereafter

Power Generation

- The Company will focus on enhancing current products particularly in high horsepower range and developing value added offerings for the customers, given an extremely high demand in the datacentre space.

- With greater focus on more stringent environmental norms in the future, the Company is positioned favourably as a pioneer in producing engines with cleaner technology.

- Power back-up solutions operating on alternate energy sources are expected to enter the power generation landscape in the coming years. The Company sees these technologies as opportunities to serve customers since they become more viable.

Industrial

- The Company continues to invest significantly on localization initiatives to offer locally manufactured products to customers and support the Government of Indias "Make in India" and "Atmanirbhar Bharat" initiative.

- Railways: With near 100% electrification of broad-gauge network of Indian Railways, the Company has invested to pursue growth opportunities in electrified propulsion system solutions like the High-Speed Self Propelled Accident Relief Trains while continuing to maintain its strong positioning on its diesel product portfolio.

- Mining: The Company continues to invest in new technologies in mining segment for higher capacity (> 190 tons) dump trucks and for migration to future emission regulations (CEMM). The rising demand of engines for the underground mining Trucks are significant growth opportunities going ahead.

- Marine: The Company is well positioned to consolidate its positioning and relationship with the Indian Navy, Coast Guard as well as major shipyards to offer engines, diesel electric propulsion and genset packages for upcoming naval & Green tug transition programme (GTTP).

- Defence: The Company is well placed to address emerging opportunities resulting from Government of Indias focus on giving boost to domestic defence manufacturing industry and participating in key strategic defence projects.

- Construction: Construction segment in India is expected to witness healthy growth driven by increased momentum in implementation of infrastructure projects. Growth in portable compressors and drilling applications is also expected to create incremental demand for high-performance engine platforms, particularly in infrastructure development, mining, and quarrying operations. The Company is also strengthening its focus on export markets, leveraging its technology capabilities and manufacturing strength to cater to growing demand across international markets. Further the companys presence in the high growth specialised equipment category combined with its expanding technology portfolio and deep OEM partnerships, is expected to enable it to grow ahead of the broader construction equipment market over the medium to long term.

Distribution

- The Company is scaling its presence in the low kVA genset segment through targeted product offerings and channel expansion initiatives to capture growth in this high-demand segment.

- The Company is exploring AI-enabled solutions to enhance customer engagement and provide field teams with improved visibility into customer and asset information, enabling more effective and proactive service.

Exports

- The Company is focused on increasing the exports of its products and is positioned strongly in the marketplace across key geographies.

- Focusing on customer needs, the Company has taken significant steps to improve engagement with customers from Latin America, Asia Pacific, Africa and Middle East regions.

7. Risks and Concerns the Management Perceives

- The Companys export growth continues to be linked to demand conditions in key partner geographies. The escalation in global trade tensions during FY 2025-26 has created a more complex environment for export-oriented businesses.

- While private capital investment showed improvement in FY 2025-26 relative to prior years – aided by income tax relief, GST rationalisation, and lower inflation – the pace of private capex recovery remains uneven across sectors. Any slowdown in the global industrial cycle could have knock-on effects on domestic capital goods demand.

- Further, the Company has identified certain sustainability issues pertaining to environmental and social matters that present a risk or an opportunity to the Companys business which includes Climate action and Cybersecurity. The detailed information is provided in the Business Responsibility and Sustainability Report which is appended as Annexure 12 and forms part of this Report.

Measures to Mitigate Risks

- To counter the slowdown in global economic growth and demand, it was imperative to maintain focus in the domestic market. New product and market development, overall portfolio diversification and better regional penetration for existing products was and will continue to be the focus areas for the Company.

- Various cost reduction, efficiency improvement and transformation programs, which leverage Six Sigma approach have had a positive influence on the Companys profitability. Continued focus on these efforts will help the Company to maintain cost leadership in the domestic market and will remain the preferred source for exports.

- The Company continues to implement Supply Chain Digitalization initiatives to leverage latest technologies, connect systems end-to-end and use analytics to improve decision making with the help of real time data. Advanced digital tools in manufacturing, planning, logistics and quality have helped the Company to address emerging risks faster and enabled automated risk mitigation controls.

- The Company is actively working on its supply chain for further improvements. Dual sourcing adjusted payment terms with financially weaker suppliers, price revisions, long term supplier agreements, inventory building (areas wherever necessary) are some of the measures that the Company is taking to make the supply chain more agile and resilient against disruption.

8. Internal Control Systems and its Adequacy

The Company has established adequate internal control procedures, commensurate with the nature of its business and size of its operations. These controls have been designed to provide a reasonable assurance regarding maintenance of proper accounting controls for ensuring orderly and efficient conduct of its business, monitoring of operations, reliability of financial reporting, accuracy and completeness of the accounting records, the timely preparation of reliable financial information, protecting assets from unauthorized use or losses, prevention and detection of frauds and errors, and compliances with regulations. The Company has continued its efforts to align all its processes and controls with global best practices.

To provide reasonable assurance that assets are safeguarded against loss or damage and that accounting records are reliable for preparing financial statements, the Management maintains a system of accounting and controls, including an internal audit process. Internal controls are evaluated by the Internal Audit department and supported by the Management reviews. All audit observations and follow up actions thereon are tracked for resolution by the Internal Control function and reported to the Audit and Compliance Committee. As an ongoing program, for the reinforcement of the Cummins Code of Conduct is prevalent across the organization. The Code covers transparency in financial reporting, ethical conduct, regulatory compliance, conflicts of interests review and reporting of concerns. Anti-fraud programs including whistle blower mechanisms are operative across the Company.

The Board and the Risk Management Committee take responsibility for the overall process of risk management throughout the organization. Through an Enterprise Risk Management program, the Companys business units and corporate functions address opportunities and the attendant risks through an institutionalized approach aligned to the Companys objectives. The business risk is managed through cross functional involvement and communication across businesses. The results of the risk assessment and residual risks are presented to the Senior Management. The Risk Management Committee reviews business risk areas and business continuity plans inter-alia covering leadership excellence, customer centricity, technical capability and capacity, VPI execution, legal & environmental compliances and data security.

9. Key Financial Ratios a. Details of key changes in key financial ratios including significant changes i.e. change of 25% or more as compared to the immediately previous financial year along with detailed explanations:

Particulars	FY 2025-26	FY 2024-25	Explanation for significant change
Debtor Turnover Ratio	4.81	4.73	Not Applicable
Inventory Turnover Ratio	7.00	6.73	Not Applicable
Interest Coverage Ratio	219.57	180.81	Not Applicable
(Debt Service Coverage Ratio)
Current Ratio	3.32	3.12	Not Applicable
Debt Equity Ratio	–	–	Not Applicable
Operating Profit Margin (%)	28.9%	28.9%	Not Applicable
Net profit Margin (%)	19.60%	18.43%	Not Applicable

Note: The disclosed financial ratios are in alignment with Schedule III of Companies Act, 2013, as amended and as per guidance note on ‘Division II - IND AS Schedule III to the Companies Act, 2013 (Revised in January 2022) issued by Institute of Chartered Accountants of India. Please refer to Note no. 45 of Standalone Financial Statements for additional disclosure.

b. Details of any change in Return on Net Worth as compared to the previous financial year:

Particulars	Standalone
	2025-26	2024-25
Return on Net Worth (%)	31.92%	28.92%

Return on net worth is computed as net profit by average net worth. The details of the change in return on net worth are explained in relevant sections above.

10. Human Resources Development and Industrial Relations

The total number of employees including the contractual employees stands at 3,910 as on March 31, 2026.

Leadership Excellence

Your Company focuses on investing and building capabilities in leaders at all levels through various initiatives to develop ‘Future Ready Leaders and build leadership talent for future needs.

In line with our ‘Hire to Develop philosophy, we continue to invest in our Company sponsorship programs and leadership development programs. Details are following:

- 71 employees applied for education assistance to pursue higher education programs using the Global Education Assistance Policy (GEAP).

- The company continues to provide leadership development training through the Building Success in You (BSY) program and Global Leadership Development Program (GLDP).

Hire-To-Develop and Seamless Talent Deployment

Your Company is continuing with the important initiative of hire-to-develop that presents growth opportunities to employees for self-development by taking up responsibilities across functions and businesses. At least 624 professional employees have moved into different roles or functions within the organization. There were 17% of professional employees who were promoted to the next salary grade due to change in their job profiles and relative advancement in career growth.

As your Company continues to grow and expand, getting visibility to talent insights becomes increasingly important. By standardizing, integrating, and automating talent management processes. Your Company has provided Leaders with an efficient technology-based process called Integrated Talent Management (ITM). ITM touches the key stakeholders - employees, managers, and businesses and enables all to work together to achieve their goals and helps employees reach their full potential with two-way communication and feedback.

Your Company is working on the following strategic initiatives - Reimagine the HR function to meet evolving needs, deliver predictive and prescriptive talent analytics, and empower the workforce through technologies. Under these initiatives, leaders will have more autonomy and accountability to deliver talent management strategies. They will have greater real-time access to talent intelligence by which they can make more informed and proactive decisions. At every level, leaders will have the capability and capacity to deliver on their leadership responsibilities. Your Company is working towards making talent processes, tools, and approaches to be largely harmonized, allowing HR employees to consult more seamlessly across the organization.

Recruitment

Continuing the focus around employing the right and diverse talent at both entry and experienced level and developing them for future roles within the organization, this year, your Company hired a total of 234 professionals with 43 entry-level exempt professionals supplemented with 49 experienced exempt professionals and 138 non-exempt professionals.

The Company hired 58 (75%) female employees at entry-level in addition to 18 (23%) female employees at experienced level. Overall female representation in external hiring to 33%, thus showcasing our commitment towards improving gender equality. Your Company has increased its focus on diversity beyond gender by hiring a workforce from diverse backgrounds like People with Disabilities.

The Company is successfully running the ‘Partnership and Engagement programs with premier B-Schools & Engineering Institutes to hire top Managerial & Engineering talent thereby continuing our focus on ‘Hire to Develop philosophy at an early career.

This year again your Company continued its focus on increasing brand presence on social media platforms and will continue to focus on improving this engagement with the digital media.

Diversity, Equity, and Inclusion (DE&I)

Diversity, Equity, and Inclusion is in the DNA of your Company. Reiterating Mr. J Irwin Millers (Cummins Inc. Chairman, 1951-1977) famous quote "Character, ability and intelligence are not concentrated in one sex over the other, nor in persons with certain accents or in certain races or in persons holding degrees from universities", your Company has five Employee Resource Groups (ERGs) focusing on the primary dimensions of diversity namely: Gender, Generation, Culture, Person with Disability (PwD), and LGBTQ+. Promoting the organisations Diversity, Equity and Inclusion agenda, these ERGs work on initiatives that contribute to making organisations environment ‘Inclusive enabling employees to bring in their full potential at workplace. Initiatives undertaken by these ERGs include revisiting internal policies and processes, introducing new policy or guidelines to support a diverse dimension, rolling out effective workshops and awareness events, conducting audits and recommending workplace adjustments amongst others.

The Company continue to focus on increasing our gender (female) diversified talent, which is today at 27%. As the next step, your Company is working to achieve gender parity in our workforce, by moving the needle to 50% representation of female talent by 2040.

As the Company continue to hire primarily through our campus and lateral hiring, it is also focusing on the pool of talent who have taken a career break but are now all geared up to restart their career through a specially curated program offered by Cummins.

To advance our commitment to achieving 50% representation of women by 2040, Cummins continues to invest in a robust portfolio of development programs tailored for women across diverse roles. ‘She In Aftermarket strengthens the talent pipeline within our Aftermarket organization; ‘DISHA provides focused development for women in our plant locations; and ‘Empower Her focusses on building a pipeline of women leaders in the company. Programs are also delivered with our partners which includes the Society of Women Engineers. Emerging women talent in Supply Chain continue to benefit from WISCON – conference for women in supply chain. All of them collectively enable capability building and career progression for women across the enterprise.

In this journey, the WE Network (Women Empowerment Network) ERG will continue to be a strong partner with the business.

‘Wings, Employee Resource Group, focused on hiring and providing a conducive environment to Persons with Disability, celebrated International Day of Persons with Disabilities (IDPWD) inviting senior India and global leaders to address the audience and had persons with disabilities share their success stories which inspired many. The Company also prioritising how it can create a safe and inclusive environment in the Company to also attract the LGBTQ+ talent. ‘India Pride, ERG for LGBTQ+ community worked on creating more awareness, promoting Pride Ally program, sensitization and creating a safe space for the LGBTQIA+ employees. Policy changes such as offering Company Medical insurance to same sex couples and Safe manager trainings are steps taken to make your Company a safe and inclusive place to work. Another key area of focus is under-represented regions of our country in the workforce i.e., talent from Northeast India. Our ERG, ‘Ekam, is concentrating on spreading more awareness about different regions, cuisines, cultures etc through events, webinars, and competitions. In addition, your Company has an ERG, ‘NeXus, focused on generation awareness and is also aspiring to improve the representation of "veterans" in our workforce. The Glocal, affinity group facilitates access to essential resources and supports the engagement and integration of global talent relocating to Cummins India."

Your Company is being successful in consistently delivering on its commitment to provide an inclusive environment to a diverse workforce guided by a defined DEI strategy, senior leaders commitment to lead, to advocate and to advise on issues related to diversity and inclusion are critical.

Megasite Update

At Cummins Megasite, Phaltan, living up to the spirit of ‘One Cummins, your Company continues to move talent seamlessly within all the plants based on employee and business needs. Your Company believes in "Hire to Develop" and acts by providing internal opportunities as well as recruitment of fresh talent through campus recruitment. Right talent balance is achieved through hiring special skills from outside to meet business talent needs.

At Cummins Megasite, your Company has achieved 20% female representation amongst the shop-floor employees and 21% female representation amongst the professional employees. The Company is actively working on implementing a broad plan to ensure retention & engagement of employees at Megasite, part of which has already been implemented.

Right Environment

Your Company is committed to fostering a physically and psychologically safe, integrity based, respectful, inclusive, high-performance culture that breaks down hierarchies and organizational boundaries while engaging the full talent of our diverse employees to delight all our stakeholders consistently. Your Companys efforts to drive awareness and commitment amongst employees towards ‘Cummins Code of Business Conduct, ‘Treatment of Each Other at Work Policy and other Ethics and Compliance policies continue year on year through various communication platforms, trainings, emailers, portals, posters etc. which helps in creating and sustaining the right environment for all the stakeholders, both internal and external to the organization. Every year, your Company utilizes its learnings via various speak up channels and ensures to upgrade all relevant policies to help its employees unleash their full potential. In addition to the other policy awareness and trainings, the Company also focuses its efforts on creating awareness, through training, posters, email communications etc. on "Prevention of Sexual Harassment" under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act").