Cummins India's consolidated net profit rose 8.9% to Rs 170.24 crore on 21.3% drop in net sales to Rs 1,041.92 crore in Q4 March 2020 over Q4 March 2019.
The de-growth in revenue was on account of muted order bookings due to economic slowdown accentuated by Covid-19 related lockdown which impacted revenue for the quarter.
Consolidated profit before tax (PBT) tanked 46.4% to Rs 123.33 crore in Q4 March 2020 as against Rs 230.26 crore in Q4 March 2019. Current tax expenses slumped 59.5% to Rs 27.95 crore in Q4 March 2020 as against Rs 68.94 crore in Q4 March 2019. The Q4 result was announced after market hours yesterday, 17 June 2020.
In its outlook, the company said that considering the economic uncertainty associated with Covid-19 pandemic, the company is not providing revenue guidance for next year at this time. While customers have resumed operations partially, the company expects a significant impact to its next quarter results due to nationwide lockdown and consequential impact on economy.
Ashwath Ram, managing director, Cummins India said: "Revenue and EBITDA for the quarter was impacted due to lockdown. Since Q2 of FY19 we have been experiencing a slowing economy which led to a flat/negative growth rate and Covid-19 related lockdown accentuated revenue growth rate. Export markets have continued to display softness in last few quarters, arising from global economic challenges. During this quarter also, we experienced decline in certain markets where conditions deteriorated further due to Covid-19. Given the significant impact the pandemic will have on demand across various sectors in the next quarter and beyond, we are well-prepared to manage the downturn with a strong balance sheet and deployment of proactive cost optimization measures. We will continue to monitor market conditions and adjust our plans accordingly. Amidst the unprecedented Covid-19 pandemic, the health and safety of our employees and the communities in which we operate is our top priority. Our teams have initiated number of measures to support our customers, dealers and suppliers. We are confident that we will be able to tide over this unprecedented crisis and come out stronger."
The board has recommended a final dividend of Rs 7 per equity share for the financial year ended on 31 March 2020.
Cummins India is the manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets.
Shares of Cummins India skid 3.95% to Rs 370.65 on BSE. The stock hovered in the range of Rs 368.20 to Rs 383 so far.
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