Pune: Diesel and gas engine major Cummins India has reported a profit after tax of Rs 152 crore in the April to June quarter of current fiscal, down 17 per cent compared to Rs 184 crore reported for the same period last year.
The revenue of Rs 1,316 crore showed a marginal growth of 2 per cent as compared to Rs 1,296 crore in Q1 FY19 and comparably flat as compared to Rs 1,314 crore recorded in the preceding quarter.
Domestic sales in Q1 FY20 came at Rs 990 crore, marking a growth of 16 per cent year-on-year but essentially flat as compared to Rs 992 crore witnessed in the preceding quarter. The company reported its exports declined by 26 per cent year-on-year at Rs 327 crore and grew 1 per cent over the preceding quarter.
“Domestic business registered strong growth over the previous year across all segments of the business,” said Managing Director Sandeep Sinha.
“This could have been even more robust. However, order intake was impacted by liquidity crunch in the economy as shadow banks went into a crisis mode, as well as uncertainty prevailing in the run-up to the elections led to a delay in projects approvals. This is likely to play out further for at least another quarter. But revival is expected, albeit gradually thereafter,” he said in a statement.
Sinha said his confidence on the medium- to long-term outlook on domestic sales, especially from the infrastructure sectors, is even higher as stated allocations from the fiscal union budget positively impact this sector. Export markets have however displayed softness in recent quarters, arising from global economic challenges.
In Q1 FY20, the company also experienced a decline in certain markets within the global power generation business where conditions became weak, based on difficulties that some of these economies are experiencing.
“We continue to be positioned to outperform in our industry and are investing judiciously in product enhancements, increasing our customer focus, while maintaining strong controls on our cost of operations. Improving productivity and quality are strong focus areas as we continue delivering value to all our stakeholders,” said Sinha.
Part of the 23.8 billion dollar Cummins Inc, Cummins in India is a group of seven legal entities across 200 locations in the country with a combined turnover of over Rs 16,000 crore in 2018 and employing over 10,000 people. Cummins India is a leading manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets.