Cummins India Ltd Management Discussions

1. Industry Structure and Developments Economic Trends and Implications

The global economy demonstrated continued resilience in Financial Year 2024-25. Monetary policy across major economies underwent a pivot as central banks began easing interest rates amid continued decline in inflation. Governments across major economies maintained expansionary budgetary stances to counter lingering post-pandemic vulnerabilities and geopolitical headwinds. Moderation in energy and commodity prices, coupled with higher capacity utilization, boosted corporate profitability and investment sentiment, driving a recovery in private capital expenditure.

The Indian economy continued its growth trajectory in FY 2024-25, with real GDP growth projected at 6.5%1. Core industry output has reported a growth in FY 2024-25 driven by higher output of coal, cement, steel, and power sectors. The ratio of real Gross Fixed Capital Formation (GFCF) as percentage of GDP was 33.7% in FY 2024-251 indicating a marginal improvement from FY 2023-24

Infrastructure development remained a central priority of government policy with multiple projects being executed under the initiatives – PM Gati Shakti and the National Infrastructure Pipeline. Development of access-controlled expressways, Dedicated Freight Corridor (DFC) and Multi-modal Logistics Parks (MMLPs) will reduce the cost of logistics and improve the competitiveness of Indian products in global markets. Public-private partnerships gained further traction in FY 2024-25, with increased private sector participation in infrastructure development. Digital infrastructure development accelerated, with expanded coverage of high-speed internet networks, enhanced digital payment systems, and improved digital service delivery platforms.

Manufacturing sector continued to demonstrate resilience in FY 2024-25 with continued policy support through Production-Linked Incentive (PLI) schemes and efforts to improve ease of doing business helped maintain manufacturing momentum despite global trade uncertainties. India continued to strengthen its position as a preferred destination for organizations diversifying and derisking their supply chains, benefiting from footprint optimisation strategies and shifting global trade patterns. Technology adoption in manufacturing accelerated, with increased implementation of Industry 4.0 technologies, automation, and digital supply chain solutions.

Sustainability and decarbonization initiatives gained additional momentum, with both government policy and market forces driving the transition toward cleaner energy and production systems. India added 25GW of renewable energy capacity in FY 2024-25, marking a 35% increase over the previous year2. Energy storage systems saw growing interest for their potential to facilitate renewable energy integration and support grid stability. The sector is experiencing growth, supported by evolving policies, though challenges such as high upfront costs and technical integration remain pertinent.

The hydrogen economy in India continued to develop in FY 2024-25, supported by initiatives such as the Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme. While the implementation of program components – including incentives for green hydrogen production and electrolyzer manufacturing—has begun to stimulate investment and technology exploration, the sector remains at an early stage. International partnerships are being explored to position India within emerging global hydrogen value chains and to build domestic capabilities.

The growth prospects face headwinds from rising geopolitical conflicts, potential trade disruptions and volatile commodity markets. While business sentiments showed further improvement, supported by easing inflation and resilient labour markets, increasing trade protectionism is altering flows of capital as countries look to pursue self-sufficiency and economic security.

Sources:

1. Ministry of Statistics and Programme Implementation (MOSPI), GoI

2. Ministry of New and Renewable Energy, GoI

2. Opportunities and Threats Key Opportunities Power Generation

FY 2024-25 witnessed a 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, Real estate, Manufacturing, Infrastructure and Quick Commerce.

Emission norms have become more stringent for the back up power industry, with the introduction of CPCBIV+, on July 01, 2024, for products up to 800kW. Your Company has launched best-in class, sophisticated and emission compliant products for the customers across the range.

Industrial

Railways: Indian Railways has achieved over 98% track electrification of its broad-gauge network of about 68000 kms in March 2025 coupled with addition of 6000 km of new tracks in the last financial year. This is driving demand for Diesel Electric Tower Cars (DETCs) that are used for periodic inspection and maintenance of traction overhead equipment. With the expansion of the railway network and dedicated freight corridors becoming operational, growth is expected to sustain in the track maintenance sector. Your Company continues to monitor this development and remains interested in contributing relevant technologies and capabilities as the ecosystem evolves.

Increased demand for fully air conditioned, high-speed passenger trains in India especially those with End-On-Generation systems and the need for efficient and reliable auxiliary power supply within these trains is driving the procurement of Hotel Load Converters by Indian Railways. Your Company has ventured into the design, development and supply of hotel load converters which will help augment business in the auxiliary power segment.

With the introduction of CPCBIV+ compliance norms, your Company has been the first mover in the supply of engines and peripherals for Power car application of LHB passenger coaches.

To move towards its goal of net zero emissions by 2030, Indian Railways is planning to introduce hydrogen powered trains on heritage routes through hydrogen fuel cell or battery powered solutions. Your Company continues to monitor this development and remains interested in contributing relevant technologies and capabilities as the ecosystem evolves.

Mining: India achieved record coal production in FY 2024-25 at over 1 billion tonnes, registering an annual growth of 5%. With increased power demand fuelling the need to enhance domestic coal production, new coal blocks are being developed, and mining operations are being contracted to mine developers & operators including private players to enhance productivity and efficiency. Growth in domestic coal production is expected to have a favourable impact on the Heavy Earth Moving Machinery (HEMM) market in the medium term especially high tonnage dump trucks for which your Company is a critical technology partner to leading OEMs. Your company has also made strong inroads into the Excavators, Motor Graders, Dozers and Stone Crusher applications with its wide range of engines.

Marine: Indian Navy and Coast Guard have undertaken a fleet expansion and modernization plan backed by the ‘Atmanirbhar Bharat initiative of the Central Government. The Union Budgets proposal of a H 25,000 crore Maritime Development Fund reflects the governments continued focus on strengthening the marine 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.

Oil & Gas: Strong momentum in city gas distribution network expansion due to planned increase in CNG stations from 6,980 now to 17,000 by 2030. In line with this, your 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. Your 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.

Pumps: Your Company is pursuing selective growth opportunities in this segment aligned with current market dynamics and demand conditions.

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. As a leading engine supplier in the construction equipment industry, your company has forged strong partnerships with OEMs, positioning well to capitalize on the favourable industry trends. Your 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.

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. Indian Railways is rapidly expanding its infrastructure, adding approximately 15 km of new tracks daily. With a strong focus on infrastructure, the government plans to allocate 40% of the FY26 budget to track maintenance. Growing demand for reliable maintenance, efficient operations, spare parts, and service contracts will drive aftermarket growth.

Indian mining industry is increasingly adopting green mining techniques and circular economy models to reduce its ecological footprint. This shift will fuel growing demand for DF kits and ReCon components among customers.

Growth of organized fleet and leasing markets is expected to increase demand for comprehensive service contracts, maintenance packages, and spare parts.

Exports

Your Company has witnessed significant growth in Industrial Engines exports for Mining applications over the last 2 years.

Increased shipbuilding activities are providing opportunities for marine engines with domestic OEMs exporting vessels built in India to the Middle East and Europe.

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

Your Company is seeing uptick in demand primarily from residential and low commercial markets in Europe, Africa, Middle East 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.

Risk of cost escalation and supply constraints driven by supply chain disruption, raw material shortages and tariff wars.

Industrial

Railways: With nearly 100% of Indian Railways broad gauge rail network already electrified demand for DETCs may soften going ahead. While your Company continues to invest in electrified products like Hotel Load Converters and Propulsion systems for Self-propelled Accident Relief Trains, this market is price sensitive with relatively long payback periods.

Mining: Private Mine Developers and Operators securing long term contracts may 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.

Construction: Delay in notification of CEMM (Tracked/Excavator) Emission norms is delaying the adoption of clean diesel technology in Excavator segment. Your Company is ready and eager to launch best in class products for expected Construction, Earthmoving, Material Handling and Mining Equipment (CEMM) BS IV emission norms.

Distribution

Increasing Rail electrification will restrict usage of diesel engines to Diesel Electric Multiple Units (DEMUs) and Power Car applications which will reduce maintenance requirements from customers.

The delay in new engine tenders in the railway sector, potentially affecting new engine business and associated aftersales service growth.

CIL (Coal India Limited) is outsourcing development and operation of new mines to MDOs (mine developer & operators) private players, which is posing a threat to your Company leading to tougher competition for service contracts and part supplies.

Exports

Your Company anticipates volatility in demand due to economic slowdown in key markets, ongoing geopolitical conflict, trade protectionism, and supply chain disruptions.

Your 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 FY 2024-25, your Company has successfully delivered 23000+ units of CPCBIV+ gensets across India, with strong adoption in key regions.

Your Company has launched new products in high horsepower range –

- CAQM regulation compliant products for the range of 1000kVA and above

- 2000kVA Prime rating with improved power density, engineered for demanding operating conditions

- 2500kVA DCC rating to meet the evolving need of modern data centres

Industrial

Railways: Your 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). Your company has also secured a developmental order for propulsion systems for High-Speed Self Propelled Accident Relief Trains.

Marine: Your 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 your Companys growing presence in both propulsion and high-capacity power generation solutions for leading shipyards.

Defence: Your 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.

Construction: Your Company has a leading position in excavator segment and has successfully transitioned its product portfolio to comply with CEV BS V emission norms effective Jan-25. Your company is developing latest generation higher power diesel engine based on fuel - agnostic platform with class leading power density and efficiency for the compressor & construction segment.

Distribution

Robust sales of DF Kits and RECD in the year driven by regulatory push from CAQM mandates to use Emission Control Devices (ECDs) on operational DG sets.

Your Company is promoting the applicability of DF Kits beyond power generation segment; by catering to DF Kit orders for Mining application.

Your Company successfully installed Retrofit Aftertreatment System (RAS) for residential application, driven by Graded Action Response Plan (Grap) IV in Delhi. Your company went above and beyond by providing exceptional support and successfully installing the RAS at the location within just two days.

To cater to the high-growth On-highway segment, your Company expanded its product offerings in the aftermarket to better serve evolving customer needs.

Your Company implemented a pilot installation of the OptiNAS+ Hydraulic filter kit on EX1200 THCM Excavator in the mining segment.

Exports

Increased demand for high-horsepower and light-horsepower PowerGen solutions across key international markets – including North America, Central America, Latin America, Europe, and the Middle East – contributed to the growth in your Companys export revenue during the year.

4. New Business initiatives for Financial Year 2024-25 Power Generation

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: Your Company has succeeded in testing and shipment of CPCBIV+ compliant diesel alternator set for Power Car, Track Recording Car and a Hotel Load Convertor to meet the requirements of the auxiliary power sub-segment of Indian Railways.

Marine: Your Company continues to gain traction in the marine segment, delivering value to both government shipyards through complex long-term projects and to commercial shipbuilders across the country.

Mining: Your Company continues to innovate and develop fit-for-market products for large mining OEMs to expand its presence in the HEMM segments both for domestic and international markets.

Pumps: Your 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 domestic and export markets.

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

Construction: Your 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. Your Company continues to develop advanced engines on fuel - agnostic platform with best-in-class power density and efficiency for the compressor & construction segment.

Distribution

Your Company launched Power Management Solutions (PMS), addressing power factor penalties, harmonics issues, and the demand for IoT-enabled power quality monitoring. PMS includes a Smart Energy Meter for real-time monitoring and APFC (Automatic Power Factor Control) Panels for customized solutions.

Your Company launched Cummins Retrofit Aftertreatment System (RAS), a cutting-edge retrofit emission control device designed for seamless installation and operation, providing an efficient solution to control Particulate Matter emissions from gensets.

Your Company recently introduced OptiNAS+ Hydraulic Filter designed to enhance the performance and longevity of heavy-duty Machinery.

Your Company launched DGBLUE a Diesel Exhaust Fluid (DEF) designed especially for usage in Cummins range of CPCBIV+ gensets, ensuring smooth and efficient operations.

Demonstrating our commitment to national defense, your Company signed an MoU with a prominent naval training establishment to support maintenance training for the naval fleet—reinforcing collaboration in Indias defense ecosystem.

Your Company organized All India Aftermarket Conference (AIAC), bringing together Aftermarket Leadership, Sales teams, and dealers under one roof for the first time. Cummins India Leadership Team acknowledged the exceptional performance of the business in the previous year, and charted a strategic roadmap with aspirational goals, for the upcoming year.

Exports

Your Company launched projects to improve market penetration for the LHP segment through Fit-for-Market products, Channel initiatives, Pricing and Sales penetration.

Your Company introduced low kVA Fit-for-market gensets targeted towards unregulated markets in Latin America.

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

5. Achievements Power Generation

Your Companys efforts to improve the product accessibility for customers in the Powergen market continues with the expansion of the dealer channel with the GOEMs, from 113 dealers in FY 2023-24 to 127 dealers in FY2024-25.

In the high horsepower segment, your Company successfully executed the orders for a large hyperscale datacenter coming up in India. Hyperscale datacentres present a huge business potential and with this prestigious win your Company is well positioned to expand its presence in this segment and meet the stringent customer requirements.

Industrial

Railways: Your Company continues to deepen its strategic partnership with Indian Railways through a broad portfolio of solutions for passenger and utility applications. Cummins HLCs have demonstrated strong performance over extended operational hours in service across the Indian Railways network and are expected to commence serial production this year.

Marine: Your Company recorded the highest ever annual sales driven by robust execution of government and commercial marine orders. Order Intake was also at a record high pointing to a sustainable growth in the coming years.

Mining: Your Company has made further inroads in Heavy Earth Moving Machinery (HEMM) market by securing orders from key OEMs.

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

Construction: With strong customer focus, your Company has won businesses from new and existing customers in unregulated electronic engines which offers excellent value proposition.

Distribution

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

A leading construction equipment manufacturer recognized your Company as a valuable business partner, marking a key milestone in the partnership. The recognition was awarded to Cummins India DBU for driving 61% year-on-year growth in the aftermarket business, setting new sales records. Your Company successfully delivered a complex power synchronization solution for a pharma giant, enabling seamless transition between grid and DG power to ensure uninterrupted operations.

Your Company signed pan-India RC with a leading public sector power utility for parts and labour. The aim is to streamline operations by standardizing rates across all their locations, driving uniformity in service delivery. Your Company secured its first order in the Railway electrical space for maintenance and overhaul of a high-voltage distribution substation.

Your Company successfully secured an order from Eastern Railway for pre-inspection, transportation, repair/ rewinding, and overhauling of 30 traction alternators. By successfully executing this project, we aim to expand our footprint in railway electrification and forging long term strong relationships with both existing and new Indian Railways clients.

Your Company responded swiftly to a critical engine failure in Leh, powering a military prototype machine for Indian Army. Despite harsh weather and remoteness, our engineer delivered excellent service, showcasing resilience, expertise, and strong customer commitment in tough conditions.

Exports

Your Company introduced 38L and 50L uprated electronic engines to cater to North America and Central America markets in the last financial year.

6. Outlook and Initiatives for the Current Year and Thereafter Power Generation

Your Company will focus on enhancing current products particularly in high horsepower range and developing value added offerings for the customers.

With greater focus on more stringent environmental norms in the future, your 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. Your Company sees these technologies as opportunities to serve customers since they become more viable.

Industrial

Your Company is investing 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 100% electrification of broad-gauge network of Indian Railways, your Company has invested to pursue growth opportunities in electrified propulsion system solutions while continuing to maintain leadership position on its diesel product portfolio.

Marine: Your Company is well positioned to consolidate its positioning and relationship with the Indian Navy, Coast Guard as well as major shipyards to offer engines, integrated propulsion and genset packages for upcoming projects.

Mining: Your 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). Defence: Your Company is well placed to address emerging opportunities resulting from Govt. of Indias focus on giving boost to domestic defense manufacturing industry and increasing share of indigenous content in defence equipment. Construction: Construction segment in India is expected to witness healthy growth driven by increased momentum in implementation of infrastructure projects. Further your Companys presence in the high growth specialised equipment category is expected to help the company grow faster than overall construction equipment market.

Distribution

In response to the growing focus on Environmental, Social, and Governance (ESG) priorities among its customers, your Company plans to expand its emission-controlling product portfolio to new business segments and applications. This strategic move is further amplified by the increased focus on reconditioning engines, which promotes sustainability through product life extension.

The Company proactively establishing channels in key regions across the globe to leverage potential synergies by aligning products with market demands for future growth.

Your Company is actively working on decarbonization initiatives under the Destination Zero strategy by certifying carbon footprint of our remanufactured / ReCon products and providing assurance to customers on their carbon savings.

Your Company recently deployed salesforce for dealer management, implementing advanced analytics to enhance capabilities of our dealerships. Predictive analytics will be used in Sales and Service processes to exceed customer expectations and deliver excellence in our service.

Exports

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

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

7. Risks and Concerns the Management Perceives

Your Companys export growth hinges on the increase in demand in key geographies across the globe partner countries. The Company continues to be cautious about exports business performance due to the ongoing economic uncertainty and aftereffects of the pandemic in partner countries. Because of our international business presence, we are exposed to foreign currency exchange rate risks.

Capital investment in the private sector has been lagging even though the countrys attractiveness for investment has been well established. Coupled with inflation being on the higher side along with high interest rates, delayed capital investment plans could have downside risk for domestic 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 your Company.

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

Your 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 your Company to address emerging risks faster and enabled automated risk mitigation controls.

Your 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 your Company is taking to make the supply chain more agile and resilient against disruption.

8. Internal Control Systems and its Adequacy

Your 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. Your 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 . 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 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 takes 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

(i) Details of 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 2024-25	FY 2023-24	Explanation for significant change
Debtor Turnover	4.73	4.88	Not Applicable
Inventory Turnover	6.73	6.33	Not Applicable
Interest Coverage Ratio	180.81	79.09	During the year the Company has fully repaid its borrowings.
(Debt Service Coverage Ratio)
Current Ratio	3.12	2.90	Not Applicable
Debt Equity Ratio	-	0.02	During the year the Company has fully repaid its borrowings.
Operating Profit Margin (%)	28.9%	28.8%	Not Applicable
Net profit Margin (%)	18.43%	18.56%	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.

(ii) Details of any change in Return on Net Worth as compared to the previous financial year:

Particulars	Standalone		Consolidated
	2024-25	2023-24	2024-25	2023-24
Return on Net Worth (%)	28.92%	28.83%	28.22%	27.84%

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 the relevant sections above.

10. Human Resources Development and Industrial Relations

The total number of employees including the contractual employees stands at 3,975 as on March 31, 2025.

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:

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

- 48 employees applied for education assistance to pursue certification programs using the Global Employee External Development Policy (EEDP)

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

- 93 employees continue pursuing the Company sponsored B.Tech and M.Tech Programs.

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 270 professional employees have moved into different roles or functions within the organization. There were 18% 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 773 professionals with 88 entry-level exempt professionals supplemented with 279 experienced exempt professionals and 406 non-exempt professionals.

Your Company hired 55 (63%) female employees at entry-level in addition to 116 (42%) female employees at experienced level. This elevated our overall female representation in external hiring to 47%, 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, LGBTQ & North-East region of India.

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.

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

‘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, and holding training sessions on bursting myths and sensitizing employees. The gender reassignment policy launched this year is also one step in making your Company a safe and inclusive place to work for diverse employees. 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.

Your Company is being successful in consistently delivering on its commitment to provide an inclusive environment to a diverse workforce, 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 16.6% female representation amongst the shop-floor employees and 17.3% 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").

11. Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objective, projections, estimates and expectations may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company operations include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in government regulations, tax laws and other statutes and incidental factors.