Cummins India Q3 profit down 1.5% at Rs 178 cr

Company says lower profit number due to higher provisioning for slow moving items of inventory

Diesel engine manufacturer Cummins India has posted a profit of Rs 178.35 crore of the third quarter ended as on December 31, 2015, down 1.5 per cent from the profit achieved in the corresponding quarter a year ago. The total income of the company has increased by 6 per cent at Rs 1,147 crore from Rs 1,083 crore recorded during the same period last year.

The profit has been impacted due to a one-time charge of Rs 16 crore on account of an excess inventory provision taken in accordance with a consistent time-based policy for certain slow-moving items, based on the demand projections for those products, company said in a statement.

"As domestic markets continued to gradually improve, our domestic business grew three per cent sequentially, primarily due to our industrial off-highway engine and distribution businesses. As compared to the same quarter last year, our domestic business grew 12 per cent mainly due to growth in the power generation and distribution businesses. We continue to either improve or maintain our market share position. We generated strong cash flow in the quarter. Global markets have worsened this year, " said Anant J Talaulicar, chairman & managing director, Cummins India.

Cummins India is exiting from operations of Cummins Research and Technology India (CRTI) and its shareholding after completion of absorption of appropriate number of employees from CRTI. It was formed in 2003 as 50:50 joint venture between Cummins India and Cummins Inc USA, with an intent to provide analysis led design only within the Cummins Group.