Cummins India beats Street in Q4 with 68% jump in net profit
1 min read 24 May 2023, 09:03 PM ISTThe engine maker attributed the strong numbers to robust demand, strategic pricing, and prudent cost management.
PremiumMUMBAI : Cummins India Ltd on Wednesday said standalone net profit in the March quarter jumped 68.4% to ₹318.5 crore, crossing the ₹268 crore estimated in a Bloomberg analysts’ poll. The engine maker attributed the strong numbers to robust demand, strategic pricing, and prudent cost management.
However, Cummins India shares closed 5.3% lower at ₹1,595.3 on the National Stock Exchange, as investors were disappointed about the company not issuing a guidance citing geopolitical unpredictability and supply chain conditions.
Revenue hit a record for the second year in a row. Income from operations rose by 28.6% to ₹1,889.1 crore, compared to ₹1,468.5 crore a year earlier. The board approved a final dividend of ₹13 per share for FY23.
During the quarter, the company clocked exports of ₹493 crore, up 17% from a year ago, but down 9% from the preceding quarter. Domestic sales at ₹1,396 crore were up 33% from a year ago but down 13% from the preceding quarter.
“Given the emission changes from July and continued supply chain challenges, especially for specific electronic and other components, we remain cautiously optimistic about the short to medium-term demand outlook," Ashwath Ram, managing director, said in a statement. For FY23, Cummins India’s consolidated net profit rose 27.4% to ₹1,129.8 crore, up from ₹886.6 crore in FY22. Consolidated revenue grew 26.3% to ₹7,612.3 crore.
“The CPCB IV+ norms will become effective July 1, 2023, for gensets up to 800 kW. The company is ready with its products to meet the new emissions norms and is confident of offering the best-in-class products to its customers which will continue to deliver superior performance and meet the new emission norms," the statement added.
Cummins India shares are up 15.6% year-to-date, and trades at 33 times FY24 estimated earnings, as per Bloomberg data. The company has a market capitalization of ₹44,178 crore.
A JM Financial research report said the company’s gross margins may improve as supply chain issues ease and new products are launched in export markets.
