Cummins India soared 8.16% to Rs 2,595 after the company's standalone net profit grew 26.32% to Rs 454.92 crore during Q3 FY24 as compared with Rs 360.14 crore posted in same period a year ago.
Revenue from operations increased 16.68% YoY to Rs 2,501.81 crore in the December 2023 quarter.Domestic sales jumped 36% YoY to Rs 2,177 crore while exports slipped 40% YoY to Rs 325 crore during the period under review.
Profit before exceptional item and tax stood at Rs 601.65 crore in Q3 FY24, up 25.61% from Rs 478.97 crore posted in Q3 FY23.
Exceptional item during the quarter was at Rs 1.70 crore, pertaining to expenses on account of voluntary retirement (VRP) and voluntary separation (VSP) programs announced on 3 November 2023, for eligible employees.
Ashwath Ram, managing director of Cummins India, said, The world's major economies are dealing effectively to cool down inflationary trends and maintain growth rates. The continued geopolitical risks and resolution of conflicts will likely take longer, posing continued uncertainty about global trade. Recent conflicts impacting trade routes have caused increased freight costs and lead time for supplies.
Amidst these uncertainties, the Indian economy is holding up well on the back of strong domestic demand and continued government spending, notably on infrastructure. The recent Interim budget proposing higher allocation for capital expenditure augurs well for the Indian economy.
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The company recorded the highest quarterly revenue and profits based on robust domestic demand and is well-positioned to support domestic and export demand. The company has a strong liquidity and financial position to support its operations and growth plans.
On outlook front, the company stated that the investment by India in infrastructure continues to bode well for it. The powergen market will see a demand shift with an increasing focus on CPCB IV+ compliant products. However, upcoming quarters are likely to see mixed demand for CPCB II and CPCB IV+ products, as CPCB II products are allowed to be sold till 30 June 2024. Global economic conditions remain uncertain as the world is witnessing geopolitical tensions, inflationary trends etc.
Optimistic domestic demand outlook is expected to contribute to sales and profitable growth for the company, though exports in near term may be impacted due to the global economic uncertainties in the short/medium term. However, the firm stated that it has a good portfolio of products and is striving for recovery in exports.
Meanwhile, the board has approved an interim dividend of Rs 18 per equity share for the financial year 2023-24 and it will be paid on or before 6 March 2024. The record date form the same has been fixed on 21 February 2024.
Cummins India is a leading manufacturer of diesel and natural gas engines. The Company is engaged in the business of manufacturing trading and selling of engines and allied activities.
The counter hit an all-time high of Rs 2,642.45 in todays intraday session.
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