See Bull Run's current pages for Cummins India and CG Power. Related comparisons include Thermax vs Cummins India, ABB India vs CG Power and CG Power vs Siemens Energy India.

The market-cap difference is only about 5%.

That makes the difference in current earnings multiples unusually important.

Q1 FY27 scorecard

Cummins's biggest current advantage is domestic demand

Domestic sales reached approximately ₹2,854 crore.

They increased 22% year on year.

Domestic sales represented about 85% of Q1 standalone sales.

This gives Cummins a predominantly Indian demand engine.

Exports were ₹521 crore

Exports were broadly flat year on year but increased 16% sequentially.

That means Q1 growth came overwhelmingly from India rather than from an unusually strong export quarter.

Cummins is not just a diesel-engine company

Its Indian listed business participates in:

• power generation;
• high-horsepower engines;
• industrial applications;
• aftermarket;
• exports;
• parts and service;
• distributed power solutions.

Distributed power solves a different problem from the electricity grid

A transformer moves and changes voltage.

A generator creates electricity near the point of consumption.

Cummins therefore benefits when a customer requires:

• backup power;
• prime power;
• mission-critical redundancy;
• off-grid or weak-grid power;
• industrial engines.

Data centres need both Cummins and CG Power

This is why the two businesses can benefit simultaneously from AI infrastructure.

Data-centre power architecture has multiple layers

A large campus needs:

• utility transmission;
• power transformers;
• switchgear;
• substations;
• backup generators;
• UPS systems;
• battery storage;
• controls and monitoring.

CG operates farther toward the grid layer.

Cummins operates closer to standby and distributed generation.

Cummins says Indian power-generation demand has remained broad based

Recent management commentary has highlighted demand from:

• manufacturing;
• pharmaceuticals;
• commercial real estate;
• residential real estate;
• data centres;
• high-horsepower applications.

This diversification matters because Cummins does not need one hyperscale-data-centre cycle to support the whole power-generation business.

CPCB IV+ created a technology reset

India moved to much stricter emissions standards for generator sets.

Cummins has described CPCB IV+ as among the toughest generator emissions standards in its operating world.

That can favour established manufacturers because compliance requires:

• engine redesign;
• after-treatment;
• electronics;
• controls;
• testing;
• dealer training.

Regulation can therefore reinforce Cummins's moat

Small competitors face a higher engineering burden.

Customers also become more sensitive to:

• reliability;
• service network;
• spare parts;
• emissions compliance.

Cummins has 480 customer touchpoints

The company also has four manufacturing plants, assembly capability and distribution infrastructure in India.

This network is important because a generator is not a one-time hardware transaction.

Uptime requires:

• maintenance;
• parts;
• technicians;
• diagnostics;
• overhaul.

Aftermarket economics create a second profit layer

The installed base can continue generating revenue long after the original engine or generator has been sold.

That makes Cummins less dependent on continuously winning giant new contracts.

This explains why Cummins does not need a CG-style backlog KPI

Cummins has a larger share of:

• short-cycle product sales;
• distribution;
• aftermarket;
• repeat customer demand.

CG's transformers and switchgear projects naturally create longer-duration order books.

CG's current Power Systems demand is exceptional

Power Systems Q1 sales reached approximately ₹1,402 crore.

They grew 31% year on year.

PBIT reached approximately ₹324 crore.

PBIT margin was 23.1%.

This segment is more profitable than Cummins's headline PBT margin

CG Power Systems:

23.1% PBIT margin.

Cummins:

21.4% PBT-before-exceptional margin.

These accounting levels differ, so they should not be treated as directly interchangeable.

But the result shows how powerful transformer and switchgear scarcity has become.

CG's Power Systems backlog reached ₹14,434 crore

It increased approximately 59% year on year.

Power Systems represented more than 80% of CG's standalone backlog.

Order intake was more than twice segment sales

Power Systems orders:

₹3,106 crore.

Power Systems sales:

₹1,402 crore.

Approximate book-to-bill:

2.22x.

This is a Bull Run analytical calculation.

CG is therefore adding physical capacity

The company commissioned its new EHV switchgear expansion in Nashik during June.

The facility added approximately 7,200 EHV circuit breakers of annual production capacity.

Management indicated this increased EHV circuit-breaker capacity by roughly 80%.

The capacity addition is already backed by orders

This is a favourable capital-allocation setup.

New factories are less risky when demand is already visible in the backlog.

CG has also entered the global data-centre transformer market

This is strategically important for three reasons.

• It validates CG with a global mission-critical customer category.
• It provides hard-currency export exposure.
• It expands the addressable market beyond Indian utilities.

The grid bottleneck is global

US data centres, European grid replacement and Indian renewable transmission are all competing for transformer manufacturing capacity.

An Indian manufacturer with qualified capacity can therefore export scarcity.

CG's biggest upside is not transformers—it is semiconductors

CG Semi began commercial production at its G1 semiconductor OSAT facility in Sanand in July 2026.

The platform is backed by:

• CG Power;
• Renesas Electronics;
• Stars Microelectronics.

OSAT introduces an entirely new earnings possibility

Semiconductor assembly, packaging and testing can serve:

• automotive electronics;
• industrial electronics;
• power semiconductors;
• communications;
• consumer devices.

But optionality has a carrying cost

CG standalone PAT was approximately ₹364 crore.

Consolidated PAT was only around ₹308 crore.

Part of the gap reflects investment in the semiconductor platform.

Management indicated roughly ₹43 crore of Q1 semiconductor impact.

Cummins has no comparable startup drag

Its strategy remains mostly adjacent to existing power competencies.

This gives Cummins a more predictable current earnings base.

Q1 margin pressure still matters for Cummins

Cummins's sales increased 18%.

But higher commodity costs and supply-chain inflation pressured gross and operating margins.

Management said inflationary pressure is likely to remain an industry consideration.

A strong business can still have a weak margin quarter

Investors should monitor:

• steel and commodity inflation;
• pricing actions;
• product mix;
• export mix;
• supply-chain cost.

Cummins's PBT margin remained 21.4%

Its net profit margin was approximately 16.1%.

That remains a very strong current earnings structure.

Cummins generated almost 50% more PAT than CG standalone

Cummins:

₹543 crore.

CG standalone:

₹364 crore.

CG consolidated:

₹308 crore.

Yet the companies have almost the same market value

This creates the core valuation question.

How much should investors pay for future grid and semiconductor growth versus current cash earnings?

Cummins currently wins return on capital

ROCE is approximately 33.7% versus CG at 25.7%.

ROE is approximately:

• Cummins: 29.5%;
• CG: 20.4%.

Both have effectively zero standardized debt.

Cummins also wins historical free cash flow

Five-year cumulative free cash flow is approximately:

• Cummins: ₹5,144 crore;
• CG: ₹2,578 crore.

Cummins therefore generated roughly twice the cumulative free cash flow.

Cash conversion is also modestly better

Bull Run operating-cash-flow-to-net-profit:

• Cummins: ~0.73x;
• CG: ~0.58x.

Neither figure suggests investors should ignore working capital, but Cummins currently has the stronger standardized cash record.

Dividend yield also favours Cummins

Cummins yield is approximately 1.19%.

CG is approximately 0.14%.

The difference reflects CG's much heavier reinvestment phase.

Valuation is the most striking difference

The price-to-book multiples are virtually identical

Cummins:

18.16x.

CG:

18.36x.

Yet Cummins earns substantially higher current ROE.

That is an unusual valuation mismatch.

The P/E gap is much larger

Cummins trades around 65x.

CG trades around 150x.

CG's multiple is more than twice Cummins's.

Why does CG receive such a premium?

The market is paying for:

• Power Systems backlog growth;
• transformer scarcity;
• new EHV capacity;
• data-centre exports;
• semiconductor optionality;
• future earnings not yet visible in current PAT.

Why does Cummins still deserve a premium valuation?

65x earnings is not cheap.

Investors are paying for:

• 33%-plus ROCE;
• zero debt;
• high service-network density;
• power-generation brand leadership;
• data-centre upside;
• aftermarket economics;
• strong cash generation.

Cummins has lower execution risk

Its growth does not require:

• a ₹7,600 crore semiconductor build-out;
• new chip customer qualifications;
• semiconductor yield ramp-up.

The business still has cyclical and commodity risks, but the strategic model is proven.

CG has higher transformational upside

If CG Semi reaches commercial scale and Power Systems remains in a scarcity cycle, CG can become a much larger earnings platform than today's PAT suggests.

That is precisely what the valuation anticipates.

What must Cummins India prove?

• Domestic sales growth should remain healthy.
• Commodity inflation should be offset through pricing and efficiency.
• Margins should recover from Q1 pressure.
• Data-centre power demand should become more meaningful.
• CPCB IV+ leadership should support market share.
• Exports should return to sustainable growth.
• ROCE should remain above 30%.
• Free cash flow should continue supporting dividends and reinvestment.

What must CG Power prove?

• ₹14,434 crore Power Systems backlog must convert profitably.
• 23%-level Power Systems PBIT margin should remain sustainable.
• New EHV capacity needs high utilization.
• The US data-centre transformer order should lead to repeat exports.
• Industrial Systems margin needs recovery.
• CG Semi must move from earnings drag to earnings contributor.
• Semiconductor capex should not destroy group ROCE.
• A 150x P/E demands exceptional profit growth.

What could make Cummins outperform CG?

Cummins does not need a transformational new business.

If domestic power-generation sales compound in the mid-teens, margins recover and data-centre demand strengthens, earnings can grow from a valuation less than half CG's P/E.

What could make CG outperform Cummins?

CG's upside distribution is wider.

A prolonged transformer shortage plus successful OSAT ramp-up could create two simultaneous growth engines.

That would make current consolidated PAT a poor representation of future earnings power.

Which company generated more Q1 sales?

Cummins India, modestly.

₹3,375 crore standalone sales versus CG at ₹3,061 crore standalone and ₹3,281 crore consolidated.

Which currently generates more profit?

Cummins India.

PAT was approximately ₹543 crore versus CG at ₹364 crore standalone and ₹308 crore consolidated.

Which has higher ROCE?

Cummins India.

Approximately 33.7% versus CG Power at 25.7%.

Which has the stronger order book?

CG Power.

Standalone backlog was approximately ₹17,333 crore, including ₹14,434 crore in Power Systems.

Cummins's short-cycle sales model does not use a directly comparable giant backlog KPI.

Which benefits more from data centres?

Both, at different layers.

Cummins supplies distributed backup generation.

CG supplies transformers and switchgear connecting facilities to the grid.

Which has more future optionality?

CG Power.

Its semiconductor OSAT investment could create a completely new earnings stream.

Which stock is cheaper?

Cummins India by a wide margin on current earnings.

Approximately 65x P/E versus CG Power around 150x.

Which is better: Cummins India or CG Power?

Cummins India currently has the stronger valuation-adjusted business profile. It generates more current PAT, higher ROCE and ROE, roughly twice CG's five-year cumulative free cash flow, pays a higher dividend yield and trades at less than half CG's P/E despite the companies having similar market capitalisations.

CG Power currently has the stronger future-growth architecture. Power Systems is growing rapidly, backlog is accelerating, transformer capacity is expanding, data-cententre export orders have begun and semiconductor production introduces a completely new potential earnings engine.

The core difference is certainty versus optionality.

Cummins already earns the returns investors are paying for.

CG needs future earnings to catch up with expectations already embedded in the stock.

At September 2026 valuations, Cummins offers the stronger current risk-adjusted combination of earnings, cash flow, ROCE and P/E. CG can outperform if Power Systems scarcity remains exceptional and CG Semi succeeds at commercial scale, but today's valuation leaves much less room for execution mistakes.

Frequently asked questions