Exports continue to be depressed as compared to a year ago: Anant Talaulicar

Interview with CMD, Cummins India

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The first quarter numbers of Cummins India saw its topline and profits slipping. Net profit was down 14.3 per cent y-o-y and revenue slipped almost 4 per cent. Anant Talaulicar, chairman & managing director, Cummins India, believes that the domestic market is on a revival path. In an interview with Hrishikesh Joshi, he talks about the firm's expansion in India, contribution to its global revenues and the road ahead. Excerpts:

How do you see the performance of Cummins India for this quarter?
The Company has demonstrated strong domestic sales growth in all its market segments. It has sustained profitability largely owing to our strong and disciplined focus on optimizing operational costs and improving efficiency, and has largely absorbed an unfavorable product mix. Exports continue to be depressed as compared to a year ago, although they did improve as compared to the earlier quarter.  We believe that this is largely an internal supply chain correction, and not an indicator of a global economic revival.
 
How much does export contribute?
Exports comprises around 40 per cent of our total business. Our major export markets are Africa, Mexico and Europe for gensets and Europe and China for high horsepower engines.
 
Is the commercial vehicle (CV) segment in India on the road to recovery?
Yes, the market for medium and heavy commercial vehicles has improved by 25-30 per cent. While there are uncertainties, we expect the implementation of GST, good monsoons and investments in roadways to help sustain these levels.
 
How is Cummins India preparing itself for BS-VI ?
We are working closely with our OEMs to understand their expectations on fuel efficiency, reliability and affordability. We are committed to meeting the timelines announced by the government which is April 2020 for BS-VI.
 
When the  research and development centre will be operational? What kind of investments have you made for this?
The new technical center will be operational by January 2017.  We will open the center with 1,500 engineers, and will add 500 more over the next few years. The investment in the project is approximately Rs 1000 crores, which has been shared between legal entities, Cummins India Limited and Cummins Technologies India Pvt. Ltd.

Are QSK50 engines ready to hit the market?
We are ready with high-speed hedgehog engines QSK50 engines for use in high-speed passenger train locomotives in the country. The 50-litre engine is the most powerful high-speed 16-cylinder diesel to be installed in a passenger locomotive.  In India, the hedgehog engine is being marketed for use in passenger and freight locomotives, boats, including tugs and towboats, mining and offshore drilling and power generation systems. We are looking for a business of Rs 50 crore from these engines.

Any plan to expand the Phaltan plant? What are the current capacities?
At Phaltan, we have adequate capacity for manufacturing engines and gensets for domestic and export markets. There are no immediate expansions planned at Phaltan. However, we may buy an additional 100 acres in the same area in the future.