Cummins India plans to shift focus from diesel fuel engines range to natural gas-based engines.
The company has re-worked its strategy as non-conventional energy has been increasingly posing a threat to traditional fuel engines.
Cummins plans to project itself as a power generation and solutions company and not just a diesel engines manufacturer.
More From This Section
"We are banking heavily on gas-based engines and need to be ready as we require to adapt our entire range into gas-based ones," Ravi Venkatesan, chairman of Cummins India, said.
The entire existing range of Cummins engines are expected to be adapted to gas-based technology over the next 12 to 18 months.
The company plans to focus on 'Lean burn' technology for gas-based engines where the gas-to-energy conversion is very high with negligible emission.
Since the Lean burn engines have higher electronic parts, the initial cost of the engine is expected to be high, but in the long term, this cost is recovered on account of large gas savings.
Besides, Cummins is also emphasising on developing micro-turbines and fuel cells through higher allocation of R&D to develop these technologies and through partnerships with its parent company.
The company is also upgrading its existing diesel engines, particularly the V-28 engine which has high demand in the export market.
Cummins India has identified three areas of focus: power generation, industrial business and exports.
Its industrial business has been hit as the mining industry is under recession and the company's major customer Coal India has gone on a "purchase holiday."
Power generation too has been affected as demand from the information technology and telecom for gensets as back-up and regular power has been down.
The only saving grace has been the export market where demand in last fiscal increased by 4 per cent to Rs 285 crore.
Q1 net down 19.33%
Cummins India has posted a drop of 5.92 per cent in net sales to Rs 184.15 crore (Rs 195.74 crore), while the net profit dipped by 19.33 per cent to Rs 16.35 crore (Rs 20.27 crore) for the first quarter ended June 2001, as compared to the corresponding period of the previous year.
A dividend of 65 per cent for fiscal 2000-2001 was approved by the shareholders at its AGM on Thursday.
Exports during the quarter were marginally up by 1.73 per cent to Rs 66.38 crore (Rs 65.25 crore).