Introduction
On May 6, 2025, Cummins India share price witnessed a steep fall of over 7%, dropping to ₹2,774 on the National Stock Exchange (NSE). The sharp decline came after its parent company, Cummins Inc., suspended its full-year revenue guidance, citing economic uncertainties stemming from recent tariff measures by US President Donald Trump. This move has significantly shaken investor confidence, especially given the company’s close ties to the PowerGen sector.
1. Withdrawal of Revenue Guidance by Cummins Inc.
Cummins Inc. announced the suspension of its FY25 revenue forecast, citing global economic uncertainties and disruptions caused by ongoing trade tensions. CEO Jennifer Rumsey emphasized the unpredictability surrounding tariffs, making it difficult to issue reliable guidance. This created immediate volatility for its listed Indian arm, Cummins India.
2. Trump Tariffs Impact on Global Trade
US President Donald Trump’s protectionist tariff measures have disrupted global supply chains and business outlooks. According to a CNBC report, these tariffs are already causing ripple effects across multiple industries. Cummins Inc., which had forecasted a 10% revenue growth in India including unlisted JVs, has now withdrawn these optimistic estimates. The uncertainty is a major red flag for investors.
3. Poor Performance in PowerGen Business
The PowerGen segment, a key contributor to Cummins India’s revenue, saw an 11% YoY decline in the March 2025 quarter. This is especially concerning because this segment had previously shown inflated growth due to advance buying ahead of emission norms in the base quarter.
4. Revenue Drop Across Indian Operations
Cummins Inc. reported a 14% decline in revenue from Indian operations, including its joint ventures. This poor performance further intensified negative sentiment surrounding Cummins India, the only publicly listed entity among its Indian businesses.
5. Stock Market Reaction
The immediate market reaction was harsh. Cummins India stock opened lower at ₹2,848.95 and touched a low of ₹2,714.40 during the day, erasing recent monthly gains. The stock is now down nearly 15% YTD, a worrying trend for long-term investors.
6. VWAP and Technical Weakness
The Volume Weighted Average Price (VWAP) for the day stood at ₹2,759.76, indicating bearish sentiment. With a 52-week high of ₹4,169.50 and a low of ₹2,594.75, the stock’s current trajectory signals mounting pressure and technical weakness.
7. Loss of Investor Confidence
The lack of visibility in earnings and the direct exposure to volatile global markets have made Cummins India a risk-averse choice in the near term. Until clarity returns and guidance is reinstated, investors may choose to remain on the sidelines.
Conclusion
The drop in Cummins India share price highlights broader concerns about market volatility, tariff wars, and sector-specific challenges like those in PowerGen. While the company’s leadership remains confident in their long-term strategy, short-term uncertainties are weighing heavily on investor sentiment. Going forward, a clear recovery plan and reinstatement of growth forecasts will be essential to restore market trust.
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Disclaimer: This blog is intended for educational purposes only. It does not constitute investment advice. Investors are advised to conduct their own due diligence before making any financial decisions.
