Cummins India rallies after Q2 FY22 PAT rises 28% to Rs 221 cr

Cummins India advanced 2.26% to Rs 915.55 after the company's consolidated net profit jumped 27.64% to Rs 221.03 crore on a 47% surge in revenue from operations to Rs 1,692.37 crore in Q2 September 2021 over Q2 September 2020.

On a standalone basis, total sales for the quarter stood at Rs 1,689 crore, growing 48% as compared to the same quarter last year and 45% compared to the preceding quarter. Domestic sales stood at Rs 1,250 crore, improving by 68% compared to the same quarter last year and by 46% as compared to the preceding quarter. Exports sales was at Rs 439 crore, jumping 10% as compared to the same quarter last year and improved by 43% as compared to the preceding quarter. Profit after tax was at Rs 220 crore, climbing 51% as compared to the same quarter last year.

Ashwath Ram, the managing director (MD) of Cummins India, said, "As the economy rebounds post COVID-19 Wave II, we see increased demand from key segments for domestic and export markets. The pace of economic recovery is visible, with strong GST collections sustaining above Rs 1 lac crore per month. With near normal monsoon, we expect that rural demand will be sustained. Similarly, the continued focus of the government on infrastructure is helping in economic recovery. With abating COVID-19, economic recovery is visible across various economy segments, and demand in some segments has reached or exceeded the pre COVID level."

"On the back of strong economic rebound, we had the highest ever quarterly revenue for the quarter under review. Our domestic and export revenue recorded strong growth, both year over year and sequentially. We also saw the revival of demand in export markets. Supply Chain remains constrained; however, there are improvements visible in some areas, especially on locally produced parts. Rising commodity prices coupled with the recent development of shortages in silicon, polymers and coal may have a cascading impact on supply chain and material cost. We continue to leverage our globally integrated supply chain to mitigate this risk and lessen the possible effect of these changes on our business. Our number one priority continues to be the safety and well-being of our employees, serving our customers and communities," he added.

For its outlook, Cummins India highlighted that the improvement in economic activities was based on - the pace of vaccination in different states across India; the supply chain is slowly stabilizing and ramping up to meet rising demand; increase in government and private capex cycle and recovery in broader consumption across various market segments.

However, the company further stated, "Given that current market conditions continue to remain uncertain, the visibility of complete end market recovery is somewhat limited, mainly due to anticipation of wave 3e of COVID- 19. Thus, the company is not providing full-year revenue guidance for FY 2022."

Cummins India, part of the Cummins Group, is the country's leading manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets.

Powered by Capital Market - Live News